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Biden will keep using U.S. sanctions weapon but with sharper aim - sources

[December 16, 2020] By Matt Spetalnick, Daphne Psaledakis, Humeyra Pamuk and Trevor Hunnicutt

WASHINGTON (Reuters) - Joe Biden will not shy away from using President Donald Trump's weapon of choice - sanctions - as he seeks to reshape America's foreign policy, according to people familiar with his thinking.

But when Biden takes office on Jan. 20, he is expected to quickly begin recalibrating Trump's blunt-force approach while taking time to deliberate before making any major changes with top sanctions targets like Iran and China, the sources said.

His challenge will be to sort out which sanctions to keep, which to undo and which to expand. This will come after four years in which Trump has imposed punitive economic measures at a record pace – often unilaterally - but has failed to bend U.S. rivals to his will.

The revised strategy will be crafted with help from a broad review of sanctions programs that will begin soon after Biden’s inauguration, the sources said on condition of anonymity.

But even before this assessment is complete, Biden is expected to make clear that sanctions will remain a central instrument of U.S. power - although it will no longer be deployed with the “America First” bravado that has driven Trump’s foreign policy.

“It won’t be a pullback or a push forward,” said one person close to Biden’s transition team. “It will be a readjustment in the use of the sanctions tool.”

Among the early possibilities, according to two sources, could be lifting sanctions Trump imposed in September on officials of the International Criminal Court over its investigation into whether the U.S. military committed war crimes in Afghanistan, a move denounced by European allies.

Biden could also match British and European Union sanctions against Russians over the poisoning of Kremlin critic Alexei Navalny, said one person familiar with the matter. Moscow has denied any involvement.

Biden's team had no official comment.

PILING ON NEW SANCTIONS

Adding to Biden’s challenges, Trump has kept up a drum beat of sanctions in the chaotic, waning days of his administration. He has imposed measures that could make it harder for his successor to return to a landmark nuclear deal with Iran and to quickly establish a working relationship with China after Communist Party officials were targeted.

Since taking office, Trump has employed sanctions as his go-to response to international problems ranging from Iran’s military activities to North Korea’s nuclear arsenal to Venezuela’s political crisis.

The Trump administration has issued around 3,800 new sanctions “designations” compared with 2,350 in President Barack Obama’s second term, while approving far fewer delistings, the means by which Washington rewards those who change behavior, according to figures compiled by the Center for a New American Security think tank.

At the same time, his administration has pioneered the imposition of U.S. visa bans, hitting more than 200 foreign officials with travel sanctions rarely used before Trump, and has sharply escalated the use of so-called secondary sanctions that have punished friends as well as foes.

While Biden is expected to continue robust use of such coercive measures, there will be changes, including more deliberative decision-making and closer coordination with allies, the sources said.

“Sanctions are not a silver bullet,” said Hagar Hajjar Chemali, who served as a sanctions officer under Obama. “They need to be deployed as part of a broader strategy, and this is what has often been lacking with the Trump administration.”

Trump officials insist that this flexing of U.S. economic muscle has inflicted serious damage to some of America’s foes that could provide leverage for Biden.

But those governments show no signs of giving in to Trump’s demands.

Iran, despite Trump’s restoration of U.S. sanctions, refuses to renegotiate the nuclear deal he abandoned. Venezuela’s socialist President Nicolas Maduro has defied efforts to oust him. North Korea continues to build up its nuclear arsenal.

And China also has appeared unmoved by a barrage of sanctions over technology, Hong Kong, the South China Sea and the crackdown on its Muslim minority.

Some critics have questioned Trump’s expansion of individual sanctions, the blacklisting of foreign officials with asset freezes and prohibitions on Americans doing business with them. Such moves can be effective when targets are wealthy or invested in the United States but mostly symbolic when they are not.

Biden’s aides worry that the perceived overuse of sanctions could backfire, especially if it spurs other countries to develop mechanisms to circumvent U.S.-dominated financial networks.

'LASER-FOCUSED'

Still, Biden’s choice of Antony Blinken as secretary of state and Jake Sullivan as national security adviser suggests that while he will be multilateral in using sanctions, there will not be much of a letup.

Adewale Adeyemo, the incoming number two official at Treasury, vowed this month to be “laser-focused” on national security, including “using our sanctions regime to hold bad actors accountable.” He will lead Biden’s sanctions evaluation, multiple sources said.

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President-elect Joe Biden speaks as Vice President-elect Kamala Harris stands by in Wilmington, Delaware, U.S., November 16, 2020. REUTERS/Kevin Lamarque/File Photo

Iran is likely to be Biden’s biggest sanctions dilemma.

He has said he would return to the nuclear deal – which Trump left in 2018 despite opposition from European allies - if Iran resumes compliance. Iran has put the onus on the new administration to act first and may seek concessions.

While it will be hard for Biden to offer Iran significant sanctions relief anytime soon, he could create an opening for re-engagement by easing restrictions that have impeded Iran’s access to humanitarian goods amid the coronavirus pandemic, according to the person close to his team.

Sanctions as part of Trump’s “maximum pressure” campaign have driven down the OPEC nation's oil revenues and crippled foreign trade. Iran has been hurt by being frozen out of the U.S. financial system. Most countries and companies have shied away because of concern they themselves will be sanctioned for doing business with Tehran.

Even so, Trump has continued piling on new measures over Tehran’s human rights, missile development and support for militants that will be politically difficult for Biden to unwind.

“There’s a rush of actions as this administration heads toward the exits … to cause more economic pain, set back Iran’s nuclear program and complicate Biden’s path forward,” said Robert Malley, who served as Obama’s Iran adviser and has informally advised Biden’s team.

But Trump officials counter that they are actually doing Biden a favor by putting Iran under so much economic duress that it will have no choice but to return to negotiations.

"No, no, no, no,” Elliott Abrams, Trump's envoy on Iran and Venezuela, told Reuters when asked whether the purpose of stepped-up Iran sanctions was to box Biden in. “It strengthens their hand.”

Moreover, he insisted sanctioning Iran and other adversaries represents a better option than the alternatives: “One is the use of military force. Another is give up, walk away.”

TOUGHER ON HUMAN RIGHTS

Biden will also face the question of what to do about sanctions on China, the world’s second-biggest economy.

While Trump charged during the election campaign that Biden would sell out to Beijing, the president-elect has said he will take a tougher stand, especially on human rights.

This will likely mean further sanctions over Hong Kong, China’s Xinjiang region and possibly Tibet, the person close to Biden’s transition team said.

But one Biden adviser, speaking on condition of anonymity, suggested that the sanctions threat could also be used to help pressure China to resolve trade disputes.

Among Biden’s challenges with North Korea will be to clear up confusion over Trump’s policy and shore up sanctions enforcement aimed at compelling it to give up nuclear weapons.

Trump’s “bromance” with North Korean leader Kim Jong Un has undermined international sanctions pressure, experts say, although Pyongyang remains economically debilitated by restrictions on access to the global financial and trade system.

Biden has branded Kim a “thug,” and advisers predict a sterner approach.

Biden has also signaled possible sanctions on Russia over election meddling, and the newly exposed breach of federal agencies’ computers could give further impetus. He could act, as well, on an issue Trump has been reluctant to tackle: intelligence assessments that Russia offered bounties to militants to kill U.S and allied soldiers in Afghanistan, two sources said.

At home, Biden will face the challenge of repairing the government’s sanctions apparatus. Inter-agency collaboration has often been neglected amid Trump’s top-down, policymaking-by-tweet, according to people inside and outside his administration.

This has sown frustration at the State and Treasury Departments, spurring departures of experienced staff.

“People are overworked and getting burnt out,” said one former official of Treasury’s Office of Foreign Assets Control. “So the hope is the process will change for the better."

(Reporting by Matt Spetalnick, Daphne Psaledakis and Humeyra Pamuk in Washington and Trevor Hunnicutt in Wilmington, Delaware; Writing by Matt Spetalnick; Editing by Mary Milliken and Alistair Bell)

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