Episode 80: Snatching Mega-Yachts and Blacklisting Banks: Do Sanctions Actually Work?
American Presidents have been addicted to international sanctions for much of the modern era, as a way to influence the behavior of other countries. Russia, Iran, Venezuela, Syria – all have been subject to U.S. sanctions over the past four decades. But these regimes remain as defiant of U.S. geostrategic goals as ever. This week we explore Russian yacht snatching, the impact of sanctions on the Iranian people, and how a once-obscure office inside the Treasury Department ended up putting a chokehold on national economies all over the world.
Please note: Our show is produced for the ear and made to be heard. Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the audio before quoting in print.
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If you're mega rich and want to make a statement about it – nothing does the trick quite like a mega yacht.
ARCHIVAL Anderson Cooper: They've become status symbols for the super rich and striking symbols of economic inequality.
A mega yacht is rich-person-speak for a yacht that is really, really big. Like, insanely big.
ARCHIVAL Alison Camerota: Let me do the math. A super yacht is at least 78 feet long and has a full time crew. The larger you go, the looser the terms, but at 230 feet, it's generally called a mega yacht.
A mega yacht lives up to its status with subtle little details, say, like a helicopter landing pad on the front end, or a full-time, classically trained pastry chef in the kitchen, or a hand-painted baby grand piano with 24-carat gold pedals inside the main deck saloon.
You can't make this stuff up. And I didn't. Those details all came from the same 325 million-dollar yacht. It's called the Amadea. The Amadea is 348 feet long – that's just 12 feet shy of a football field. And – if you're a U.S. taxpayer – every inch of it in some sense belongs to you.
Let me explain.
The boat used to belong to a billionaire Russian oligarch named Suleyman Kerimov. But in May, 2022, the U.S. government decided that Kerimov's yacht-owning days were over.
ARCHIVAL Newscaster: A luxury superyacht owned by a sanctioned Russian oligarch has been seized and is now in the custody of the United States.
After Russia invaded Ukraine in early 2022, the U.S. government placed sanctions on a bunch of oligarchs close to Russian President Vladimir Putin and started seizing their assets – fancy second homes, private jets, and their insanely big yachts. The sanctions seemed to give the U.S. government a way to take these status symbols and hang them around the necks of the oligarchs as punishments – like a huge, dead albatross.
The U.S. also seemed to hope that sanctioning the Russian elites surrounding Putin would create pressure on him to change his behavior in Ukraine. But how well do sanctions actually work as a tool for achieving such policy objectives?
The U.S. has used sanctions on Cuba for more than 60 years, and the Communist regime is still there. The U.S. has also used them on Venezuela for almost two decades, and the socialist government of Venezuela is still there. The U.S. has sanctioned the Taliban in Afghanistan, and today they’re more radical than ever. And Russia’s war against Ukraine rages on nearly three years after even more sanctions were slapped on the Russians — on top of sanctions already in place after Russia seized Crimea a decade ago.
So I wanted to explore why the U.S. keeps imposing sanctions when their track record is so iffy. In a minute, you'll join me in the room with someone who spent years of his career drawing up sanctions for the U.S. on many countries. And he’ll tell you that sanctions are an indispensable tool for U.S. leaders.
Danny Glaser: I think it is naive for people to think that the United States is not going to use that. Why wouldn't we use it?
You'll also hear from experts laying out reasons they think sanctions are overused.
Vali Nasr: One of the functions of sanctions is that it actually allows policymakers to appear to be doing something when they don't want to take the harder decisions.
And why sanctions often fail to change the behavior of the people or the groups they target.
Narges Bajoghli: It's not like they are going to put their hands up in the air and say, “Okay, we surrender,” or “our bad, tell us how we can act better.”
I'm Peter Bergen, and this is In the Room.
[THEME MUSIC]
Regardless of party – U.S. presidents have all really liked using sanctions to try and influence and mould the behavior of other countries. Joe Biden likes sanctions.
ARCHIVAL Joe Biden: I'm announcing the first tranche of sanctions to impose costs on Russia.
So did Donald Trump.
ARCHIVAL Donald Trump: Hard hitting sanctions on Iran and many others.
And Barack Obama.
ARCHIVAL Barack Obama: The toughest sanctions against Iran ever passed.
And George W. Bush.
ARCHIVAL George W. Bush: Twelve individuals and entities for sanctions.
And Bill Clinton.
ARCHIVAL Bill Clinton: The Iran and Libya sanctions bill I signed today.
And Ronald Reagan.
ARCHIVAL Ronald Reagan: Measures to end virtually all direct economic activities between the United States and Libya.
And Jimmy Carter.
ARCHIVAL Jimmy Carter: To impose international economic sanctions upon Iran.
There's lots more archival tape where that comes from, but you get the idea. According to the U.S. Treasury Department, U.S. sanction designations have surged more than 900 percent in the last 20 years. In his first term, Donald Trump proved to be something of a sanctions maximalist. Plenty of observers think that, in round two, Trump will be eager to make sanctions great again – again.
So what is it, exactly, that all these presidents are hooked on?
Danny Glaser: A sanction is taking a financial transaction that would otherwise be legal and making it illegal.
Danny Glaser is a lawyer who, among other things, helps companies steer clear of financial transactions that are illegal because of sanctions. Before that he spent more than a decade putting together sanctions for the U.S. Treasury Department. He believes they’re a good tool of U.S. policy when trouble arises somewhere in the world.
Danny Glaser: People underestimate the pressure there is on government officials, particularly U.S. government officials, to appear to be doing something in a crisis. Sanctions are something that you can do and that people see, and that seems very action-oriented. So that's one of the reasons why policy makers and politicians like sanctions so much.
Imagine that you're the president of the United States and there's some country, or group of people, or individual that's giving the U.S. trouble. So you send your advisors off to research how to deal with the bad guys. After a while, the advisors come back with options. I'm simplifying here, but most of the time those options will boil down to three categories. One, go to war with the bad guys. Two, do nothing. Or, three, impose sanctions.
That third option, sanctions, can take many forms. The U.S. can block a country's access to global financial markets like it did with the Venezuelan government in 2017. Or, the U.S. can target a group by compelling banks to freeze their accounts, like it did with suspected terrorists and their backers after 9/11.
Or the U.S. can target individual people with a sanction. This could mean anything from barring their entry to the U.S. or – in the case of our Russian oligarch, Mr. Kerimov – seizing his mega yacht.
Danny Glaser: If you, Peter, were sanctioned, I’m not able to do a financial transaction with you, and if I happen to have any of your finances in my control, I would have to freeze them. That would likely be your bank and not me, but that's the definition of a targeted financial sanction.
Getting sanctioned isn't the same thing as being convicted of a crime. But it does mean that anyone who tries to do business with you could be guilty of a crime. So, anybody who tries to buy government debt from a sanctioned country, or anyone who tries to take money from a terrorist's frozen account, or anybody who accepts marina fees from a sanctioned oligarch's yacht – they could all end up at odds with the U.S. government.
To be sanctioned is to be put on a high-consequence, worldwide shit list. And, as Danny Glaser tells it, actually getting anyone onto that list takes a ton of work.
Danny Glaser: Most U.S. sanctions – not all – but most U.S. sanctions are implemented under something called the International Emergency Economic Powers Act (or IEEPA). It gives the president of the United States the authority to declare a national emergency with respect to a particular threat.
Danny Glaser: Now, what you have to keep in mind, though, is a national emergency under IEEPA, it doesn't match what the common person on the street would think of as a national emergency. It could be a very, very broad definition of what a national emergency is. So the president could say, it's a national emergency that Russia has invaded Ukraine. And, I'm authorizing the Secretary of the Treasury to implement sanctions against anyone who meets these criteria.
Danny Glaser: And then there'll be a number of criteria. Someone who is actively involved in commanding troops that are invading Ukraine or whatever the criteria that the president decides he or she wants to implement sanctions against.
Danny Glaser: So that then authorizes the Treasury Department to implement a sanctions program. And what the Treasury Department will do, working with U.S. intelligence, working with all parts of the U.S. government, is identify individuals who meet those criteria.
Let's say the individual in question is a Russian oligarch. Like our mega-yacht lover, Suleyman Kerimov. Then all the ways he meets the criteria gets assembled and written up, lawyers at Treasury and the Department of Justice review it, and the U.S. government announces the sanction via press release. This would likely be the first time someone like you or me would learn that a guy named Kerimov was in the crosshairs of the U.S. government.
Danny Glaser: One of the important parts of the press release is so people like you can see that we're doing something. And then the other important part of the press release is to let everybody know that this person's name is now on a list.
Danny Glaser: It's not a short process. It's not an easy process. Frankly, it's easier to kill somebody in a war zone, than it is to sanction that person.
Many financial sanctions rely on the cooperation of private parties, like international banks. Those banks make their own decisions about what – if any – business they'll risk doing with people on the American shit list. All of this means that sanctions are extremely complicated to spin up and to dial down.
Danny Glaser: There was always this sense that I had in my office at the Treasury Department, a dial, and it said, okay, you know, we're mad at Iran today. Could you turn that dial up to 8.3? Oh, you know, we're happy with what Iran said today. Could you turn it down to 7.7? That's not how sanctions work.
Glaser’s perspective on this comes from presiding over something of a heyday for American sanctions while running a once-obscure office inside the U.S. Treasury Department. The office dealt with international money laundering. I say "once-obscure" because, the day after Glaser showed up for work – well, I'll let him explain.
Danny Glaser: It was a very small office, very much below the radar. And my first day on the job was September 10th, 2001. And the next day was, uh, 9/11, and all of a sudden, what was a small, anonymous office dealing with an issue that people didn't really pay much attention to, all of a sudden we were thrust into the center of, uh, the most important national security issue of the first quarter of the 21st century.
In short order, that office was putting together sanctions on terrorist organizations and individuals linked to the 9/11 attacks. I covered this at the time and wasn’t completely convinced it would be that effective.
Peter Bergen: So obviously there was an effort to go up against terrorist financing. You know, I was always a little skeptical of that because the 9/11 attacks were carried out with several hundred thousand dollars, five hundred thousand dollars, that money, you know, it didn't really come through the traditional banking system. I mean, the London attacks where 56 commuters were killed in 2005, the whole thing was financed by people on their credit cards for like 15,000 dollars. So, you know, most terrorist attacks are relatively inexpensive.
Danny Glaser: Look, I think by citing those numbers, you are looking at it the wrong way. What you're doing is you're taking the amount of money that's spent in the final stages of executing a terrorist operation and attributing that to the entirety of the terrorist operation, saying, the sanctions, or the anti-money laundering, or the counterterrorist financing safeguards that have been put into the system didn't stop those final transactions.
Danny Glaser: And you're right, they didn't stop those final transactions. They're not entirely designed to stop those final transactions. When I think about the importance of financial measures in the context of counterterrorist financing, it's trying to undermine the financial networks that allow the terrorist organization to operate on a global level, that allow it to radicalize populations, that allow it to project its influence around the world that allow it to move arms.
That’s a good point. But I still have my doubts about the ability of sanctions to change the behavior of what the U.S. views as bad actors. And I thought with Glaser there might be no better case to examine than the case of what some people have called the most sanctioned country on earth: Iran.
Danny Glaser: I love talking about this because, for seven years, from say 2005 and 6, up until, you know, around 2011-12, all I heard from people was that sanctions couldn't work with respect to Iran.
Danny Glaser: That was the one thing that everybody seemed to agree on, was that sanctions couldn't work.
There was a good reason for that. The U.S. had been imposing sanctions of various kinds on Iran for almost half a century since the Iranian Revolution and the seizure of Americans at the U.S. embassy in Tehran in 1979.
But the ayatollahs didn’t seem at all affected by the sanctions; quite the reverse. The Iranian regime exported its revolutionary ideology to countries around the Middle East. They sponsored Hezbollah in Lebanon, which became the strongest non-state military in the world. And after the U.S. invaded Iraq in 2003, Iran supported militias in Iraq that killed many hundreds of American soldiers there.
Danny Glaser: And then almost overnight, the one thing, only thing everybody agreed on is that sanction got the Iranians to the table. Even the Iranians - even the Iranians agreed with that, that they were at the table for sanctions relief.
This was at the negotiating table. Iran made a deal with the Obama administration in 2015. Iran agreed to dismantle much of its nuclear weapons program and open it up for inspections, in exchange for billions of dollars worth of relief from U.S. and European sanctions. So what was it about this particular round of sanctions that seemed to have succeeded?
Danny Glaser: Late summer of 2006, we targeted our first Iranian bank, Bank Sepah. Sepah is, I believe, Persian for army - so “army bank.”
At this point, Iran was under sanctions that made it difficult to do things like buy arms or sell oil, but it was still able to move money pretty freely around the global economy.
Danny Glaser: In Iran's case, they had broad access to the international financial system and very much regarded themselves as part of the international community. That was their strength. Their weakness was, it was a target rich environment.
Meaning there were lots of doorways for international money coming in and out of Iran. Doorways that could be shut.
And putting this one Iranian bank on the U.S. sanctions list sent a signal to the world. There was a new kind of risk out there in the international financial system. This wasn’t about an embargo of a specific industry. This meant moving money in or out of an Iranian bank for any purpose could land you in hot water with the United States.
Danny Glaser: So what our goal was, was to just start to create uncertainty in the international financial system.
And the U.S. made it clear that more risk like this was coming.
Danny Glaser: So we were going to do one bank, then a couple months later, we were going to do another bank. We're going to talk about it a lot. We were going to put as much information out there with the whole notion of creating uncertainty in the international financial system, just so that bank compliance programs all of a sudden are like, you know what, this is starting to cost us money to do the extra due diligence we need to do on Iran. And look what happened to this bank, and look what happened to that bank, and are we next?
Banks hate uncertainty about risk. They could spend money doing due diligence to understand risk or hedge against risk, but often it’s just easier to just avoid the risk entirely. Which, in this case, might mean avoiding Iran entirely.
Danny Glaser: That was the goal, and we gradually expanded, we gradually expanded over a course of years. I think it was the summer of 2011. The moment was ripe to really blow it out, and in that summer, we changed our approach, and stopped doing one bank here, one bank there, and we basically designated all Iranian banks.
Danny Glaser: That same summer, the EU did the same thing.
Peter Bergen: And when you say designated, what does that mean?
Danny Glaser: Applied sanctions to all Iranian banks: prohibition on transaction and a freezing of assets.
Peter Bergen: Okay.
Danny Glaser: What the sanctions are, are actual, obligations on, on individuals and the banking system as a whole to not do business with Iranian banks.
Peter Bergen: All right. So, as a result of all this, Iran is basically not able to do business around the world, pretty much. When did they start talking to you about, well, this is really hurting and we're not particularly fans of this, and we'd like some resolution, but also we will start talking about our nuclear program. How did that all work?
Danny Glaser: I had the fun part of the job. My job was to apply pressure on Iran. I didn't have the hard part of the job which was actually trying to negotiate a nuclear solution.
So the sanctions had succeeded in exacting enough pain. Now would they actually force a change in Iran’s behavior? The hard part of the job would be the actions taken after the sanctions got Iran to the table: diplomatic negotiations, hashing out how to dismantle Iran’s nuclear weapons program, and how to inspect nuclear facilities. Things like that could keep Iran from pursuing nuclear weapons.
Danny Glaser: One of the things that I always say is, if sanctions is your policy, then you don't have a policy.
In order for them to work well, Glaser says sanctions alone aren’t enough, that the U.S. needs to combine sanctions with other moves – diplomatic or military – in order to change the behavior of bad actors on the international stage.
Danny Glaser: Sanctions don't turn around tanks. Sanctions don't lift sieges – cities under siege. That's not what sanctions do. Sanctions are an attempt to build up economic pressure, to exact economic costs, so that there is more things for the diplomats to bargain with.
ARCHIVAL Donald Trump: At the heart of the Iran deal was a giant fiction.
In 2018 President Donald Trump pulled the United States out of the Iran nuclear deal. And afterwards, his administration’s policy was more sanctions.
The U.S. cut off Iran’s access to the global financial system wherever it could, in a strategy known as “maximum pressure. ” And so Iran resumed its uranium enrichment program and now has enough fissile material for several nuclear weapons. Meanwhile, Iran's economy – and its people – entered a new period of suffering.
So was that success?
Danny Glaser: I think it's important to talk about what's the definition of success. If we think of sanctions as a silver bullet. We're always going to be disappointed.
[MUSIC]
I want you to meet a pair of Iranian American scholars who have studied the impact of sanctions in considerable detail.
Narges Bajoghli: Narges Bajoghli. I'm an assistant professor at Johns Hopkins SAIS and one of the co-authors of How Sanctions Work.
Vali Nasr: And I’m Vali Nasr. I'm a professor at Johns Hopkins SAIS. I'm also a co-author of How Sanctions Work.
Vali Nasr and Narges Bajoghli are both professors at Johns Hopkins University’s School of Advanced International Studies — known as SAIS. They’re the ones who have labeled Iran, “the most sanctioned country on earth. ” Iran has been dealing with U.S. sanctions ever since the 1979 revolution there. This history makes Iran an extraordinarily revealing laboratory for examining How Sanctions Work. Which happens to be, quite aptly, the title of their new book.
They took something of a unique approach. Nasr's contributions to the book focused on how sanctions affect Iran's behavior internationally. Bagohli, who’s an anthropologist by training, focused on how the sanctions affect regular people in the targeted country.
Narges Bajoghli: So much of how sanctions are either written about or studied is from the macro level. But when you do things on a macro level, you lose sight of the humans that are having to face living through economic sanctions.
Their book argues that sanctions cause lots of collateral damage where they’re imposed and that collateral damage in many ways causes the sanctions to fail in their intended purpose. Because one motivation for sanctions is the hope that pressuring the people of a particular country will lead them to pressure their leaders to change.
Vali Nasr: The majority of our sanctions are actually on the Iranian people. If you say you can't buy medicine, you can't import these sets of things, that sanctions are inherently inflationary, and we know every economist would tell you that inflation causes poverty.
Vali Nasr: Nothing destroys society more than inflation.
Here’s how sanctions in Iran cause inflation.
Iran is well educated and oil-rich, and it’s got a bigger population than Germany. But since 2010, with aggressive international sanctions in place, over eight million Iranians have fallen from the middle class to the lower middle class. And the ranks of the poor have swelled by more than four million.
Constant inflation is a major cause. Sanctions fuel inflation by limiting the amount of oil Iran can sell abroad to fund its government. So the government prints lots of money to make up for the shortfall. Too much cash chasing too few goods causes prices to go up.
And for lots of Iranian families, the constantly rising prices cause precarious lives to become desperate. Like, for example, the widowed single mother who Bajoghli interviewed in Tehran.
Narges Bajoghli: She's the sole earner for her two children. She continues to work at the beauty salon but needs to take on more work. Her brother, thankfully, has a car, so she's able to do sort of the equivalent of Uber. But that means that her children never see her because she's doing multiple shifts of work a day. So they're starting to have behavioral issues.
Narges Bajoghli: They miss their mother. They're starting to do badly at school. And then she needs more money because inflation just keeps going high. And when I last spoke to her, was seriously contemplating whether she needs to go into sex work or not. This is a person who, when you talk to her, has a million and one frustrations with the ruling establishment, but at the same time, she has to now make these kinds of decisions about her and her children.
Multiply her story by many millions and you can see why any hope that the people of Iran could be part of forcing a behavior change in their government is probably just wishful thinking.
And that’s setting aside the moral implications of a U.S. policy that pushes people into poverty.
Vali Nasr: We both have a colleague who famously said, you know, sanctions are written by people who sit behind mahogany desks, not in the turrets of the tanks. So unlike soldiers in Iraq or any other area in the world, where they’re in a war. They don't actually see the people that their bullets kill.
Vali Nasr: When you go to the Pentagon, I think they have a very robust view about the morality of war.
Vali Nasr: Like, what is illegitimate, what it's not, when do you stop shooting, when do you stop bombing, should you do all of these things. That level of conversation is not there.
Peter Bergen: Well, that is a very interesting observation.
Peter Bergen: I mean, the Department of Defense has, I don't know, hundreds or thousands of lawyers who are looking at the laws of war for what they're doing. But you're saying that at the Department of State, the Department of Treasury, there may be lawyers trying to tighten these sanctions, but they're not thinking about the moral implications.
Narges Bajoghli: Like hot warfare, you can have a photojournalist take a picture or you can have someone turn on their camera and show you what is going on. Economic sanctions, you can't do that. So how do you make it come to life for people to quote unquote see it? And part of that is through human stories.
And so we're left with countries where people seemingly face permanent immiseration from U.S. sanctions. Nasr says this makes sanctions less likely to do what the U.S. actually wants them to do.
Vali Nasr: Because it's dawning on countries more and more that there is no light at the end of the tunnel.
Vali Nasr: Why is it that what we got in 2015 Trump couldn't get with maximum pressure, right? Because of the way we're managing sanctions. It's actually becoming less effective. It's kind of like overuse of antibiotics. Just because penicillin once worked, it doesn't mean that it's going to continue to work.
Peter Bergen: Yeah, well, the antibiotic metaphor is a very interesting one. You can overuse these things and at a certain point it's not going to work.
Vali Nasr: If a country decides that once you go under sanctions, they never get lifted, their calculus is not the same.
Peter Bergen: Yeah.
Vali Nasr: I mean, if your child misbehaves, you send him to his room and you say, you can't do these things. You can't go to the movies, you can't call your friends, your phone is confiscated. Your child's expectation is that there's a limit to this. Okay, I did something bad. This is a five day, you know, punishment.
Vali Nasr: But if your child concluded that this is it forever, right, I'm never going to get my phone back. I'm never going to see my friends. Then what's the incentive in reversing course?
Vali Nasr: In fact, he might decide to find a way that he can build a hole in his, in the wall of his room and jump outside.
Whatever your metaphor, the basic idea is this: the more permanent the sanctions seem, the less likely they're going to work as a negotiating tactic. And the more likely that powerbrokers in the sanctioned country will find workarounds.
Narges Bajoghli: So that's called sanctions busting, and sanctions busting is essentially these kinds of states, that first and foremost, in the core of their political culture is an idea that they are anti-Imperialist or that they are working against the West and what they see as the bullying of the West towards them.
Narges Bajoghli: Those kinds of countries, when you implement sanctions against them, it's not like they are going to put their hands up in the air and say, ‘Okay, we surrender,’ or ‘our bad, tell us how we can act better.’ Instead, what they do is they try to look for workarounds. And so what they end up doing is they go into the black market.
Narges Bajoghli: When you implement the level of sanctions that have been implemented on Iran, sanctions busting does not become a feasible option for independent businesses. Why? Because now, all of a sudden, the same kinds of goods that you used to get on the market for, let's say, 100 dollars, those same goods end up becoming 400 dollars, because you can't get insurance on them, you can't get them to come in the same routes that that you used to before.
Narges Bajoghli: You need to pay a lot more money, and you need to pay it in cash. The only entities in these states that have the political will to break laws, international laws, to get to sanctioned goods, to pay the increased amounts, are those tied to the military establishments.
Narges Bajoghli: This is why you see in cases either in Iran, Cuba, Venezuela, any of these sanctions countries that we're looking for, the military establishment, the businesses tied to them end up mushrooming under increased sanctions because they're the ones who have access to capital.
Narges Bajoghli: They also begin to control ever more the customs and the borders of the country of what can come in and what can go out. So in essence, they begin to take over pretty much the entire economy.
Vali Nasr: We don't see sanctions as war, we see sanctions as a substitute to war. But Iran sees this as war. And if you're in a war, the people with guns actually take control of more and more things because it becomes a national security issue.
Peter Bergen: So the people with the guns are also making all the money?
Narges Bajoghli: Yeah. And this is not just in Iran, but pretty much every sanctioned country.
Vali Nasr: So the more Iran's economy of 85 million people is pushed into the black market, the more it is not regular banks or regular courts in Iran or regular businessmen who operate in this economy, but it becomes revolutionary guards.
Vali Nasr: You are putting billions of dollars who should be in an open economy into channels that they control.We are weakening the very Iranians we think should be the supporters of democracy and change, and we've ended up strengthening the very forces that oppose us, challenge us, and also are not forces for democracy inside Iran.
As the ruling establishment becomes increasingly powerful, the regular impoverished Iranians become increasingly frustrated. One often-repeated argument for sanctions is based on the idea that this frustration will one day cause people to rise up and overthrow their government.
Narges Bajoghli: The Iranian revolution of 1979 was a middle class revolution. And one of the reasons that it worked was that oil workers, university professors, workers across different sectors could go on strike for months on end to cripple the economy under the Shah.
But Nasr and Bajoghli say that – in today's impoverished Iran – the frustrations of regular people aren't likely to lead to change.
Narges Bajoghli: In 2022, when we saw the Woman, Life, Freedom uprisings – and there was similar calls and demands by activists and people on the streets for strikes across different sectors of the economy – they simply could not go on strike because they don't have their savings accounts. Inflation is to such a degree that they need to work on a day to day basis. They cannot afford to go on even a week of the strike. So that is part of the calculus here.
Narges Bajoghli: The other part of it, which was very interesting for me, was listening to conversations in Washington, D. C. during the uprisings were folks within the administration and elsewhere, policymakers, who were saying, okay, how can we support the protesters, how can we support these activists?
And here’s where people in the U.S. government looking to support change in Iran hit an unexpected problem – U.S. government sanctions.
Narges Bajoghli: And what was fascinating to me is they kept running up against their own sanctions. There was no way for U.S. civil society, U.S. government, any of these entities to be able to actually support anyone on the ground because they had blocked off all of the avenues for any kind of financial or other kinds of support because of sanctions.
Narges Bajoghli: On every level, it is essentially isolating the country. And what that means is that in moments in which the West does want to support, they have essentially created a net and a knot for themselves that they can't even get through.
So, Nasr and Bajoghli are saying that widespread, long term sanctions often end up strengthening the very governments that the sanctions were created to undermine. They're also saying that extreme sanctions pauperize nations. And nations of paupers tend to be too busy surviving to toss out their rulers.
So, if you're a U.S. taxpayer when the U.S. government sanctions some country or some person in your name – how well does that serve your interests? Maybe another way of asking this is – what exactly did you get when the U.S. seized Suleiyman Karimov's 300 million-dollar yacht?
As it turns out, the result was Karimov's albatross became your albatross.
ARCHIVAL Newscaster: A $300 million Russian yacht seized by the U.S. Government 19 months ago was spotted yesterday cruising around San Diego Bay. The government wants to sell that yacht to the highest bidder to get out of skyrocketing maintenance costs.
ARCHIVAL Newscaster 2: 600,000 dollars pays for maintenance, 144,000 is for insurance, 178,000 that's for docking fees. The U.S. government is spending nearly 1 million dollars every month to maintain this yacht.
The slow progress of the yacht forfeiture case through U.S. courts has gotten a lot of attention. And maybe that's in part because the yacht itself gets lots of attention. I know all the details about the Amadea mega-yacht because it's got an online following. It's also been written up in yacht magazines and it's even got fans who post videos about it online.
ARCHIVAL Influencer: The Amadea right here is basically a floating palace. You just gotta see it.
One of those videos doesn't even have talking. It's just ten windy minutes of the boat docking in Gibraltar in 2021.
And if you watch closely, you'll see another great detail. Welded to the pointiest part of the bow, you’ll see a five-ton stainless steel sculpture of a soaring bird.
And if you're asking the same question I did, the answer is yes. That bird absolutely is an albatross.
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If you want to know some more about the issues we discussed in this episode, we recommend: How Sanctions Work: Iran and the Impact of Economic Warfare by Narges Bajoghli and Vali Nasr. We also recommend Treasury's War: The Unleashing of a New Era of Financial Warfare by Juan Zarate, which is available on Audible.
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Maureen Traynor is our Head of Operations.
And our Delivery Coordinator is Ana Paula Martinez.
16Audible’s Chief Content Officer is Rachel Ghiazza
Head of Content Acquisition & Development and Partnerships: Pat Shah
Audible Executive Producer: Lara Regan Kleinschmidt
Special thanks to Marlon Calbi and Allison Weber
Copyright 2024 by Audible Originals, LLC
Sound recording copyright 2024 by Audible Originals, LLC
This episode includes excerpts from a broadcast by Sky News Australia from News Corp Australia. This episode also includes excerpts from a broadcast by CBC News from the Canadian Broadcasting Corporation.
