I. Introduction

Terrorism has become one of the most critical national security issues in recent years. The threat of terrorism could disrupt the current balance of power, generate significant global instability, and lead to increased violence.⁵ The threat of terrorism can be ascertained by looking at the growing number of counter-terrorism commissions and official initiatives—many of them established by economic multi-national organizations. For example, the Asia-Pacific Economic Cooperation (APEC) introduced its Counter Terrorism Task Force (CTTF) in February 2003, which oversees the Secure Trade in the APEC Region (STAR)⁶ among its other activities.⁷ In 2002, The European Union (EU) adopted the Treaty on European Union, which contains Provisions on Police and Judicial Cooperation in Criminal Matters.⁸ After the terrorist attacks in Madrid on March 11, 2004 the EU launched a pan-European antiterrorism program that created a single database for arrest warrants to monitor and mitigate possible terrorist threats.⁹ In Southeast Asia, the Association of Southeast Asian Nations (ASEAN) initialed the Declaration on Joint Action to Counter Terrorism in November 2001.¹⁰

Since the beginning of the 21st century, the main counter-terrorism policy has focused on attacking the financing of terrorism and today remains the immediate responses to terrorism. In June 2002, the member nations of the regionally based Organization of American States (OAS) signed the Inter

⁵. Hale E. Sheppard, Revamping the Export-Import Bank In 2002: The Impact of This Interim Solution on the United States and Latin America, 6 N.Y.U.J. LEGIS. & PUB. Pol’y 89, 122 (2002-2003).

⁶. Secure Trade in the APEC Region, THE WHITE HOUSE ARCHIVES, https://georgewbush whitehouse.archives.gov/infocus/internationaltrade/apec_star.html (last visited Mar. 18, 2020). See also Bruce Bennett, APEC’s Response to Terrorism, UNISCI Discussion Papers, https://georgewbush-whitehouse.archives.gov/infocus/internationaltrade/apec_star.html (last visited Mar. 18, 2020).

⁷. Counter-Terrorism, ASIA-PACIFIC ECON. COOPERATION, https://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-TechnicalCooperation/Working-Groups/Counter-Terrorism (last visited Mar. 18, 2020).

⁸. See Treaty of Amsterdam Amending the Treaty on European Union, 1997, O.J. (C 340/1), art. K.1 at 16-17. The Treaty of Amsterdam amended Article 29 of the Treaty of European Union [Maastricht Treaty]. See Treaty of Maastricht 1992, O.J. (C 191/1).

⁹. Thomas Fuller, European Union Agrees on Plan to Coordinate Antiterror Effort, N.Y. TIMES (Mar. 26, 2004), https://www.nytimes.com/2004/03/26/world/european-unionagrees-on-plan-to-coordinate-antiterror-effort.html.

¹⁰. ASS’N OF SOUTHEAST ASIAN NATIONS (ASEAN), ASEAN Efforts to Counter Terrorism (2001), https://asean.org/?static_post=2001-asean-declaration-on-joint-action-to-counter-terrorism (last visited Apr. 2, 2021).

American Convention Against Terrorism.¹¹ Following the September 11 attacks on the U.S., the United Nations Security Council unanimously adopted Resolution 1373 to condemn the attacks and set up the Counter-Terrorism Committee, applicable to all members of the Security Council.¹² Through their Financial Action Task Force, the G7 nations adopted a number of recommendations against terrorist financing.¹³ Moreover, the U.S. has used financial measures against its adversaries for a long time.¹⁴ After the September 11 attacks, Congress passed the USA Patriot Act which extended the authority of the President.¹⁵ The Act enabled President George W. Bush to issue sweeping economic sanctions as a counterterrorism strategy.¹⁶ Since the attacks, the U.S. has since taken more serious steps to tackle the financing of terrorism.¹⁷ Consequently, the U.S. has used economic sanctions to ban North Korea, Syria, and Iran from entering the global financial system and has established serious financial measures to prevent terrorist organizations such as Al Qaeda and Islamic State of Iraq and Syria (ISIS) from accessing funds.¹⁸

The connection between terrorism and globalization has helped world leaders establish broad security and economic policies. The Financial Action Task Force (FATF) is an inter-governmental body that fights against money laundering and terrorist financing, and provides information sharing techniques between countries on terrorist financing policing.¹⁹ While the attempt to identify and disrupt sources of terrorist funding remains at the center of many antiterrorism policies today, the approach is not new. For decades, countries have been using trade and economic sanctions against governments accused of sponsoring terrorism.²⁰

¹¹. Inter-Amer. Convention Against Terrorism, OAS General Assembly Resolution AG/RES. 1840 (XXXII-0/02) 2nd plenary session, 3 June 2002, available at http://www.oas.org/xxxiiga/english/docs_en/docs_items/agres1840_02.htm.

¹². S.C. Res. 1373, U.N. Doc. S/RES/1373 (Sept. 28, 2001) [hereinafter S.C. Res. 1373].

¹³. See FATF Recommendations 2012 (amended October 2020), FINANCIAL ACTION TASK FORCE, available at https://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html.

¹⁴. See Juan C. Zarate, TREASURY’S WAR: THE UNLEASHING OF A NEW ERA OF FINANCIAL WARFARE ix (2013).

¹⁵. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2011, Pub. L. No. 107-56, 115 Stat. 272 (2001) [hereinafter Patriot Act].

¹⁶. Exec. Order No. 13224, 66 Fed. Reg. 49,079 (Sept. 23, 2001).

¹⁷. *Id. *

¹⁸. Zarate, supra note 14, at x.

¹⁹. FATF Recommendations 2012, supra note 13, at 7.

²⁰. See generally Loretta Napoleoni, MODERN JIHAD: TRACING THE DOLLARS BEHIND THE TERROR NETWORKS, 22 (2003).

Before discussing why nation-wide sanctions are ineffective in achieving national security objectives, it is important to understand the legal context and history of U.S unilateral economic sanctions. The first part of this paper discusses the regulations of trade sanctions in today’s war against international terrorism and explains the most important legislation regarding U.S. unilateral economic nation-wide sanctions, including their application and regulatory changes over the time. The second part examines the systemic inadequacy conventional nation-wide sanctions to fight against contemporary forms of terrorism. First, it will discuss the inverse relationship between the length of sanctions and their efficacy by providing some examples of U.S. unilateral economic sanctions, country-based or activity-based, and their effectiveness in achieve their desired objectives. As addresses below, due to the internationalization of terrorism, there is no national identity for terrorists today and the traditional justifications for the use of nation-wide sanctions to punish nation-states for supporting terrorism has become outdated.²¹ Second, I will discuss the adverse effects of unilateral economic nation-wide sanctions on the target state’s socioeconomic conditions which consequently lead to dissatisfaction and encourages extremist ideologies. Finally, I address how smart sanctions and antipoverty initiatives can act as a preventive policy to combat terrorism and protect the national security.

I. Introduction

Table of Contents