Tuesday, May 15, 2007

For State Actors, Financial Sanctions Bite

Perhaps it is nothing new. It has long been realized that "finance" is a potent weapon, when "financial power" is consolidated politically.

One of the architects of the US Treasury's efforts to use 'financial sanctions' as policy instruments pens a positive post-mortem:

The results have been promising. Many non-US financial institutions and companies reduced or terminated commercial ties with Iran and early last year the Organisation for Economic Co-operation and Development raised its risk-rating for Iran. Months later the Iranian oil minister had to acknowledge that Iran was having trouble financing oil projects.

Of these financial measures, the action against the Banco Delta Asia had the most dramatic impact. Macau's subsequent freezing of nearly €19 million in BDA accounts clearly rattled the North Koreans. It became a major sticking point in the six-party talks, with North Korea refusing to return to the table until the money was returned.

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