Modern Sanctions Require Active Enforcement Against Adaptive Evasion

The U.S. uses sanctions as a primary tool of economic statecraft, yet the system fails to change the behavior of adversary regimes. This reveals a mismatch between Washington’s reliance on traditional economic pressure and the reality of a multipolar financial landscape. As adversaries like Russia, Iran, and North Korea build sophisticated evasion networks by leveraging China’s market and alternative payment systems like cryptocurrency, the effectiveness of the U.S. dollar as a coercive weapon erodes. For policymakers and analysts, the takeaway is clear: the era of set and forget sanctions is over. Success now requires a high fidelity, resource intensive commitment to enforcement that accounts for the adaptive, interconnected nature of the modern global economy.

The Erosion of the Sanctions Only Model

Washington relies on sanctions to avoid direct military conflict. However, the system is currently routing around this pressure. As Rory Jones notes, the volume of sanctions has increased from roughly 800 in 2017 to 3,000 in 2024, yet the target regimes remain in place. The system has responded to U.S. pressure by creating bubble worlds where adversaries trade, exchange, and finance their activities outside the reach of the U.S. dollar.

Broadly speaking, these countries are gaming out ways to evade and avoid sanctions. And it is a sign that there is this block of countries around the world that are anti American and that are increasingly working together to blunt the power of US sanctions.

-- Rory Jones

This dynamic creates a feedback loop: as the U.S. applies more pressure, the incentive for adversaries to develop alternative financial infrastructure grows. Once that infrastructure is established, the leverage of the U.S. dollar diminishes, rendering future sanctions less effective.

The Hidden Cost of Enforcement Lag

A recurring theme is that the primary failure of modern sanctions is not the design of the policy, but the lack of consistent enforcement. Senator Richard Blumenthal emphasizes that a law without enforcement is a dead letter. The historical reliance on sanctions as a first tool often leads to a pattern of neglect where designations are left in place for years, allowing target entities to build shadow fleets and complex middleman networks that become increasingly difficult to dismantle.

The law is dead letter if it is not enforced, all too often sanctions simply have not been enforced. And I have been critical of the Department of Treasury in the Obama administration, in the Trump administration, in the Biden administration for being too lax and laggard.

-- Senator Richard Blumenthal

The systems level implication is that scorching sanctions are only as effective as the monitoring capabilities behind them. Without a proactive, hawk like enforcement mechanism, sanctions provide a false sense of action while allowing the adversary to adapt and normalize the new economic environment.

The Shift to Geopolitical Weaponization of Trade

The proposed Russian sanctions bill marks a transition from sanctions as a tool of trade imbalance correction to sanctions as an explicit geopolitical weapon. By targeting the top five buyers of Russian oil and gas, the U.S. is attempting to force a choice upon global powers like China and India. This strategy acknowledges that the previous model, which targeted only the adversary, was insufficient because it ignored the pass throughs that facilitate evasion.

However, this shift creates a new risk: the potential for systemic overreach. While the bill attempts to limit the President's authority to specific targets, the precedent of using tariffs to force third party compliance fundamentally alters the global trade system. If the U.S. successfully forces these buyers to stop, it may achieve its goal; if it fails, it risks further alienating key economic actors and accelerating the global shift away from U.S. led financial systems.

Key Action Items

• Audit Existing Designations: Review outdated and obsolete sanctions that have been in place for years without changing behavior. Over the next quarter, shift focus from adding new designations to auditing the efficacy of current ones.
• Prioritize Enforcement Infrastructure: Invest in the bureaucratic and technical capacity to track shadow fleets and illicit middleman networks. This is a long term investment that pays off in 12 to 18 months by closing the loopholes that currently render sanctions ineffective.
• Target the Enablers, Not Just the Actors: Shift focus toward the pass throughs and facilitators of sanctions evasion. Targeting the buyers of sanctioned goods, such as oil, creates immediate friction that forces a change in the adversary's revenue stream.
• Develop Targeted, Time Bound Sanctions: Move away from indefinite sanctions. Implementing measures with a limited time scope forces behavioral change and prevents the target from having the time to game out evasion strategies.
• Anticipate Adversary Adaptation: Map the secondary and tertiary effects of any new sanction. If a sanction cuts off a revenue stream, assume the adversary will move to cryptocurrency or alternative currencies like the yuan to compensate. Plan enforcement accordingly.