Select Committee on Economic Affairs Minutes of Evidence


Examination of Witnesses (Questions 1 - 19)

MONDAY 27 JUNE 2006

MR STEPHEN PATTISON, MR CHRISTOPHER YVON, MR PAUL BENTALL, MR PATRICK GUTHRIE AND MR TOM DAWLINGS

  Q1  Chairman: Good afternoon. Thank you very much for coming to give evidence. I am bidden to say to you at the beginning of the session, if you speak up and speak relatively slowly, we stand a better chance of understanding what you are saying and getting an accurate record; and that applies as much to us as it does to you. I do not know whether you want to introduce yourselves and your role, but I think that we ought to have on the record who has come and why. You can sort out amongst yourselves who is going to answer the questions. We will be very happy to hear from whoever wants to tell us anything. Perhaps, Mr Pattison, you might introduce yourselves in whatever way you would like to deal with it.

  Mr Pattison: Thank you very much, My Lord Chairman, for giving us this opportunity. I am Stephen Pattison, the Director in charge of international security at the Foreign Office where, among other things, I oversee the sanctions unit in the Foreign Office, which is headed by Christopher Yvon, to my right. I will leave it to each member of the panel to say briefly what their role in sanctions is.

  Mr Guthrie: I am head of the Financial Sanctions Unit in the Treasury. We are responsible for implementing financial sanctions.

  Mr Dawlings: Tom Dawlings, Financial Sanctions Unit in the Bank of England. We have a very small role as agent for the Treasury in the administration of financial sanctions.

  Mr Pattison: Chris, as I mentioned, is head of our unit at the Foreign Office that deals with sanctions.

  Mr Bentall: Paul Bentall from the Foreign Office research group. I provide expert advice to Chris and his team.

  Q2  Chairman: Do you want to say something to start with?

  Mr Pattison: I am happy to do so if you wish, but what I would want to say is probably covered by the questions, which you have given us in advance.

  Q3  Chairman: How has the pattern of UK economic sanctions changed over time? Could you explain the rationale behind the apparent move from general to more targeted sanctions?

  Mr Pattison: I think you have to remember that prior to 1990 the UN in particular had experience of only two sanctions regimes. The expansion of the use of sanctions regimes that we have seen in the international community has been primarily since 1990. That expansion has been a process of learning and adapting. There is no doubt that the trend over the 1990s, as you say, has been to focus on targeted sanctions. What drove that trend was a perception that comprehensive economic sanctions, however defined, ended up having an impact on the humanitarian welfare of civilians which was not intended and which militated against the impact of the sanctions themselves. The trend has been to devise sanctions, which we call "smart" in that they are focused on particular entities. It can be members of a regime or members of another group; it can be governments or entities outside government; it can be commodities or arms; it could be focused on a ban on travel or assets freeze, and so on. The trend towards smarter sanctions, I think it is true to say, has continued to develop. For example, there have been additional refinements in the area of arms embargoes. Instead now of talking of an embargo on hardware, the trend is increasingly to talk about embargoes in addition on the provision of military services. When you look at assets, we are looking at ways in which we can act against assets of targeted figures as quickly and effectively as possible. Commodity sanctions have become part of this trend, in particular the sanctions on diamonds, particularly the illegal import of diamonds or the export of diamonds in circumstances where we believe they will fuel conflict. This has been a major step forward. We have had timber sanctions and so on. There has been this refinement of sanctions since 1990, over the last 15 or 16 years. That does not mean, I think, that comprehensive sanctions can be completely ruled out. In the British Government review of sanctions policy conducted in 1998 and reported to Parliament in 1999, we were very careful not to rule it out, but the fact remains, as I say, that over the period in question the trend has been in a different direction.

  Q4  Lord Sheldon: How far have economic sanctions been used in a way that has been combined with other methods of influencing change—diplomacy and the use of force? If the sanctions are used as an alternative to force, it has got to be used as a means of persuading the public that that is the last, ultimate possibility that they have in mind—but it is always something that is a threat at the very end if other methods are used before that.

  Mr Pattison: I do not see sanctions as a substitute or alternative to the use of force. I see them as a quite distinct tool. They are recognised as a distinct tool under the UN Charter, which has separate articles on sanctions from the article on enforcement measures. I do not think we should assume that sanctions are a substitute for force, nor do I think we should always assume that sanctions are a stepping-stone towards the use of force. In fact, the history of sanctions regimes that the international community has imposed do not suggest that at all; they suggest quite the opposite. As to the effectiveness of what you describe as economic sanctions, in a sense it applies to all sanctions. It is true to say that sanctions are most effective where they are not imposed in isolation, and what we are usually looking for is a policy which underlines that sanctions are not an end in themselves; sanctions are a way of achieving an objective. Usually, to achieve that objective a number of things will be required. In some cases we will need to make sure that we have a diplomatic process that is open to have the target entity in the sort of negotiations or resolution of the problem that we want to achieve. In other cases, economic sanctions, whatever they are, may be combined with other sorts of sanctions, so that one would look at an arms embargo and a travel ban and an assets freeze, and maybe a commodity ban on a particular entity, in order to achieve the desired effect. The two points that I would emphasise are that sanctions are not an alternative to the use of force; they are a separate tool in their own right. Second, sanctions have to be seen as part, usually, of a wider picture of levers that the international community can use to attain its objectives.

  Q5  Lord Sheldon: Are there not occasions when force is there in the background as a possible threat if sanctions are not going to work?

  Mr Pattison: There have of course been occasions where the threat of enforcement is there in the background. In almost every case those have been preceded by sanctions or the threat of sanctions in order to achieve the objective, but if you look at the range of sanctions regimes, those cases are in a pretty small minority.

  Q6  Lord Skidelsky: Do I understand you to then reject the theory of graduated sanctions?

  Mr Pattison: No, not at all.

  Q7  Lord Skidelsky: When you said it was a distinct tool, you almost implied that it was a discrete thing and then used in combination, whereas the traditional view would be that you had an escalating set of sanctions, the ultimate step of which was war if you did not achieve the objectives that you had set out to do. That was one quite popular view of it in the past.

  Mr Pattison: I have no problem with the idea of graduated sanctions; on the contrary. Quite often, in designing sanctions regimes one is looking first at imposing a certain range of measures with a view to moving on to other measures, if necessary and if attainable, within the international community. My only point was that the logical end of that process does not always have to be force, nor would we start that process thinking that the use of force is going to be the logical end of it.

  Q8  Chairman: When you are considering sanctions, do you consider the effect of them not working when you bring them in and what you will do subsequently, for example the use of the sunset clause?

  Mr Pattison: There are several questions wrapped up in that, if I may say so. We always consider the effectiveness, and that boils down to whether they can be effectively enforced and policed. We also consider the impact that those sanctions are likely to have on the target regime. We certainly consider that if we cannot get the particular sanction we are going for and it is not effective, are there any other options that we could go for. We would consider that on every occasion. Once the sanctions are implemented we would look very carefully at the humanitarian impact of sanctions. As I say, that has changed a bit over the last 15 years. During the 1990s the UN would conduct studies before the imposition of sanctions of any measures under contemplation. Increasingly, as we have moved to smarter sanctions, where the humanitarian side-effects are, by definition, less, the humanitarian assessment usually happens after the sanctions are in place. On sunset clauses, there is a slightly different range of issues. Our view has always been that it does not make enough sense to set an explicit time limit for sanctions, because that only creates an incentive on the part of the target to sit it out and wait. One of the lessons of sanctions is that they do not have the impact that you might wish they would have overnight; it is usually a longer-term arrangement. We have therefore been traditionally reluctant to consider setting clear end dates for sanctions. We prefer to talk about an end state, i.e., looking at the objectives which we hope the sanctions regime will bring about in terms of changing the target entity's behaviour. That said, as part of the growing concern about minimising the secondary impact of sanctions, as a matter of practice these days all sanctions regimes are subject to careful periodic review at the Security Council, drawing on information provided by monitors both within and outside the UN, to make sure that the sanctions are not causing adverse humanitarian or other unintended impacts.

  Q9  Lord Vallance of Tummel: You have answered my question in part when you were talking about graduated sanctions, but can we focus a little more on the purposes and objectives of sanctions themselves? At times they seem to be very modest and no more than registering disapproval of some action with no great expectation of change in behaviour; but at other times they are seeking a major objective, and maybe a major change in policy or perhaps even a regime change. Can you comment on the range of different objectives and their relevance to different situations; and can you comment on how far you consider objectives have been made explicit in specific cases in the past?

  Mr Pattison: Sanctions, obviously, have a range of different objectives, and they also have a range of different scopes. There are sanctions that range from a travel ban on members of a regime, right through to some of the other things we have talked about such as arms embargoes, commodity embargoes or other commodity control measures. The objective of sanctions varies, depending on each situation. We have had sanctions in the past that were designed to effect regime change. We have had sanctions in respect of Rhodesia and in respect of illegitimate governments that were in power temporarily in Sierra Leone and Haiti. Generally speaking, the aim of sanctions has been to change behaviour of a regime or of a targeted entity—because now we have sanctions on Al-Qaeda and terrorist groups. The primary objective of sanctions at the UN, almost by definition, has to be to address the threats to international peace and security. This is a crucial bit of UN Security Council theology. The UN Security Council, under the Charter, is mandated to deal with threats to international peace and security. As a rule of thumb, in order to get sanctions adopted by the UN Security Council, you will have to make a case that international peace and security are under threat. This is a rule of thumb that we are trying to stretch, if you can stretch a rule of thumb! Sanctions imposed by the European Union under common foreign security policy are not limited to threats to international peace and security. Under the guidelines that the European Union has agreed, the European Union can impose sanctions for a variety of other objectives, which include, broadly, human rights, good governance and rule of law issues. For example, we have EU sanctions on Belarus and Zimbabwe, where our judgment is that it would be quite difficult to obtain sanctions at the Security Council against those entities. That is not to say we do not try. There are a number of cases where we will try hard, particularly in respect of Zimbabwe, and we would want to look quite carefully at pushing, in the case of, say, Burma, to get the Security Council to take more of an interest in the situations in those countries. The objectives of sanctions clearly differ. The tools differ. I do not think there is any hard and fast correlation. Obviously there are links that you can look at, looking at the history of sanctions, but I would not want to say that if we are after regime change we must do this range of sanctions, and if we are not we do not need to do that range of sanctions. We will calibrate the sanctions we use, taking into account a variety of concerns—the seriousness of the situation, the attainability of the sanctions and the prospects of other developments.

  Q10  Lord Vallance of Tummel: The second part of my question is that the objectives are always clearly stated in advance, so you can judge whether—

  Mr Pattison: Very much. We do not insist on this, but sanctions—again, I will say now, because it was not always thus, but following the announcement of our policy in favour of smart sanctions, we are very keen to ensure that the objectives are as clear as possible for a variety of reasons, which are obvious. The first is so that the target entity knows exactly what it is the target entity has to do. We can then look at sanctions lift as and when our objectives are met, so we have a clear idea of what it is we are setting out to achieve.

  Q11  Lord Powell of Bayswater: In these very complex calculations that you make about what sort of sanctions to impose and what the effect might be, how explicitly do you weigh in the balance the possible contrary effects of sanctions that is that they may actually strengthen support for a regime—it has been known to happen? Secondly, how explicitly do you recognise that it may be politic to impose sanctions, but basically you are doing it because you cannot think of anything else to do and it is better than nothing, and salves the consciences of the people who are applying the sanctions. One might point perhaps to the European Union sanctions against South Africa in the 1980s. I seem to remember a particular gesture that was described as being very minimal.

  Mr Pattison: There are two big questions there. First, let me say that we never apply sanctions for the sake of doing something. Whenever we design and apply sanctions, our hope is that those sanctions will effect a change in behaviour. The question of considering the negative impact of sanctions—yes, of course we consider it. There is a debate to be had about the extent to which sanctions increase support for a regime. It is a tricky debate, this, and my own view is that there is an argument that sanctions will increase a regime's natural support. If a regime is isolated, its natural supporters in that particular country might rally around it and fall for the rhetoric of the government portraying itself in an adversarial relationship with the rest of the world. I am not sure that that is the same as increasing the fundamental levels of support for a regime, and on that particular question the jury is still out. The answer to your point about whether we consider if sanctions are likely to have a detrimental effect in achieving change, yes, of course we do.

  Q12  Lord Macdonald of Tradeston: I would like to try to separate out a little further the different types of sanctions. Do sanctions such as arms embargoes, travel bans and asset freezes and non-military trade restrictions have different success rates? How far does each category require different monitoring and enforcement mechanisms? Are the various types of sanctions actually so different that they need to be analysed separately? Perhaps you can bear in mind that final part, bearing in mind that we are an Economic Affairs Committee, and should we be concentrating on one particular aspect and leaving perhaps arms embargoes aside?

  Mr Pattison: Yes. Let me take that last point first. Again, the international community has got much better at monitoring sanctions. There is a very interesting history of this through the 1990s where the UN started by appointing ad hoc panels to look at the effectiveness of sanctions against Angola in particular but also other countries in the 1990s. As a result of those experiences, one of the innovations has been that whenever the Security Council agrees sanctions, almost always it establishes a panel of experts to monitor and advise on various aspects of the sanctions. This would include effectiveness, enforcement, the capacity of key countries to implement them, and so on. Those panels will almost always include experts in the particular area of sanctions that are under consideration; so we would want, if we are looking at a diamond ban, somebody who knows about trade in diamonds or commodities. If we are looking at financial sanctions, we will want someone who knows about the genuine difficulties of implementing financial sanctions. The international community is getting better at that whole area of monitoring and adjusting the way in which sanctions are implemented and the way in which they operate. As I said, the fact that most of these sanctions come up for regular review, gives us an opportunity to step back to see how they are working. Are some forms of sanctions more effective than others? I think it is impossible to answer this question. It is very difficult to assess the effectiveness of sanctions. There is academic work that has been done in this area. It is certainly true that sanctions can have an effect in changing behaviour, which is the fundamental thing we want to do; but I think there are other important reasons for adopting sanctions. One is to register the international community's disapproval of what is being done, to send as strong as possible a signal that the international community will not tolerate a certain kind of behaviour. The other is to increase the costs to the regime or the entity of continuing to do whatever it is that we do not like, and to demonstrate to them that this is not just "business as usual" but that there is a cost. In certain specific situations, sanctions have other objectives. If you are looking at a conflict situation, sanctions may have the objective of trying to minimise the flow of arms into the conflict, and trying to bring one party to the negotiating table. They can have in that sense different objectives. It is very hard to assess with any precision the impact of sanctions, and therefore particularly hard to rank them and to say that certain sanctions are likely to have a quicker impact than others.

  Q13  Lord Sheldon: Where have sanctions been most successful?

  Mr Pattison: We would certainly point to the sanctions on Libya in the run-up to Libya's decision to hand over the Lockerbie suspects as a good example of sanctions bringing about the desired outcome. The sanctions on Serbia in the run-up to Dayton, which sought to detach Serbia from the Bosnian Serbs, I think proved to be successful, not least because there was a huge economic problem in Serbia at the time that the sanctions exacerbated. I think one can point to examples where sanctions have been successful, and there are other examples where sanctions may have played a part, but other circumstances were also a factor, and in those circumstances you cannot sometimes disaggregate the impact of sanctions from everything else.

  Q14  Chairman: I wonder whether I could ask you the flipside to that question: if those were the good ones, what were the bad ones? Where have sanctions simply not been effective?

  Mr Pattison: I come back to the point I just tried to make: it rather depends what you are trying to achieve. Let me talk hypothetically. Has a regime changed its behaviour as a result of a travel ban, so that leading members of the regime are unable to travel to Western Europe—or certainly has a rebel group in Africa ever changed its behaviour because of a travel ban? It is very hard to say they have, but there my point is that the sanctions register the disapproval of the international community, and they bring home to the regime that there is a price to be paid. In terms of changing behaviour, we can debate it, but I am not sure that is the only criterion by which to judge.

  Q15  Lord Skidelsky: A cynic might say that you have broadened the objectives of sanctions to cover their ineffectiveness in most situations. If a legitimate objective of sanctions is to express disapproval, by definition, if you have sanctions they must always be successful! Let us go on to another question. How do you distinguish between sanctions aimed at states and those aimed at groups, the non-state groups; and what are the problems that apply in that category? Are there differences in problems—differences in sanctions?

  Mr Pattison: It is not a straightforward question. Quite often now, sanctions against states include sanctions against individuals associated with the regime, so there is a grey area where the two are the same. I am not sure that there are substantive differences in principle, to be honest. Of course we could apply an arms embargo against a country. We would be unlikely to apply an arms embargo against an individual, but we might apply an arms embargo against other parties to a conflict—non-state actors, rebel groups, terrorist organisations and so on. I do not think there is a clear distinction between the fundamental approach of applying sanctions against a regime, a country, and against an individual. Of course there are huge and different challenges in enforcing sanctions, depending on what the sanction is. A travel ban against a relatively small number of individuals ought to be fairly straightforward, one would have thought. But a diamond ban against an African country, where diamonds are illegally smuggled and where the diamond trade is fairly informally organised, is a different kettle of fish altogether. There, we learnt from the lessons of trying to control the trade in conflict diamonds in the late 1990s, and we have now introduced something called the Kimberley Process, which provides for the certification of legitimate diamonds and a sanction really against those who trade in diamonds that are not certificated. Depending on what sanction you are using, there will be different questions of enforcement, and some undoubtedly easier than others. Financial sanctions pose particular problems in a number of areas. First, like others, it is best if you impose them quickly so that people do not have a chance to switch their assets somewhere else. Second, there are all sorts of problems of tracing the beneficial owners of particular accounts that we need to be fairly confident we have cracked before we start to apply financial sanctions in a less precise way.

  Q16  Lord Skidelsky: I get the feeling—and perhaps this is just a feeling of irritation—that Europeans particularly have got terribly interested in smart sanctions, but actually lack the will to do anything else, and they talk about avoiding costs on the sanctioned population because they actually do not want to bear any costs themselves; and that these are covers and that the whole thing is a smokescreen. In a way it has its reference in international relations literature when they talk about the difference in soft power and hard power; and Europe's role is to exert soft power, but that action means—well, all right, President Mugabe and fifty people are not allowed to travel in some capitals. In what sense has that altered their behaviour? However, at the same time the European Union can say, "Oh, yes, we have hardened our sanctions; we will move from 12 to 50 or 60, and we are graduating them, and you can see that this is clearly having an effect on his behaviour, is it not?" The answer is, "No, zero, but we feel a little better from doing it". Is that not what it is all about? Are we really talking about anything that is an instrument of power rather than an instrument of disapproval?

  Mr Pattison: There are several things. On the question of Zimbabwe, the sanctions we have in Zimbabwe clearly demonstrate our support for those forces working for change and democracy. The wider point about smart sanctions versus tougher sanctions is that I think you have to see the emerging approach to sanctions against the background of the lessons learned from the sanctions regimes that the UN has imposed in the past. Most recently, of course, you have to see it against the background of the Iraq sanctions, where there were many views expressed in the 1990s about the adverse humanitarian effect of sanctions. We were fairly sensitive to those early on and we tried to negotiate different sanctions regimes at the UN to address the humanitarian impact, and we were frustrated first by Saddam's unwillingness to negotiate. And then eventually the Oil for Food Programme, although the Volcker Commission conceded that it did very well in assisting people in dire circumstances that programme itself has subsequently been discredited because of the latitude given to Saddam to smuggle and obtain resources outside the programme, and the corruption that has been identified within the programme itself. The Iraq experience, I think, has coloured the way in which the international community now thinks about sanctions. Smart sanctions were designed not as a cop-out but designed to see if we could identify a more intelligent approach to sanctions which would really focus on those entities whose behaviour we wanted to influence, and to focus on those entities in a way which might change their behaviour. Again, looking back, the effort we put into the diamond ban in respect of Angola and Sierra Leone was one element but an important element in bringing an earlier end to some of those conflicts, and it was an imaginative response to a particular situation where it was in no-one's interests to impose comprehensive sanctions on countries that were already poor and made even more desperate by a history of civil war. We are trying to be clever and to achieve real objectives.

  Q17  Lord Paul: On the Oil for Food Programme, one cannot blame Saddam alone because there were racketeers all over the world who were very much hand-in-glove with him. It could not have happened if it had just been Saddam. The cynics say that it does create racketeers, and they are mostly from the countries which started the sanctions. Sanctions create racketeers because the Oil for Food Programme would not have been abused if there were people not in collusion with Saddam Hussein from some of the countries that imposed the sanctions.

  Mr Pattison: The record of Saddam's efforts to smuggle oil out of the country so that he could have access to revenue that was completely outside the programme demonstrates the lengths to which he was prepared to go to frustrate the objectives of sanctions. I would not personally have much confidence in a line which said he would have implemented them had it not been for the rest of the world wanting to make money out of it. It seems to me odd.

  Q18  Lord Kingsdown: Would you like to enlarge a bit on what you have already said about monitoring and enforcement? Are the existing arrangements, both in this country and the multilateral ones—are these mechanisms sufficient, and which of the international organisations are of most value? I do not know whether you would care to comment on the role of the effectiveness of the EU, the UN or even regional organisations. Could anything be done, should it be done, to improve their capacity in relation to sanctions? Also, I believe there are organisations called "sanctions assistance missions". How valuable are they?

  Mr Pattison: I think the monitoring of sanctions has got much better. By and large we, the international community, devised a number of mechanisms, some of which I have already spoken about, which I think have given us much more confidence in monitoring how sanctions are implemented, their effectiveness and their unintended consequences. The key to this is that a committee of the Security Council oversees the sanctions, and they are informed by these expert panels. The expert panels draw on material from a very wide range of resources, and this is an area where, again, civil society in the years has played an increasingly important role. The role of those sanctions committees and their expert groups is to do a number of things. First, they ensure that sanctions are properly implemented, so as to help states implement them and to develop the capacity for implementing them. We spent a lot of time after the imposition of Resolution 1373 on terrorism, in the wake of 9/11, on something called the Counter-Terrorism Committee, going through every country at the UN and talking to them about the way in which they were approaching these sanctions, and the problems they had with implementation.

  Q19  Lord Kingsdown: Who would go to talk to them?

  Mr Pattison: The Security Council committee, which sounds rather bureaucratic—but it is basically the members of the Security Council. As I say, now those people are supported by expert panels. We are building capacity. We are checking to make sure that countries do what they are supposed to do in implementing sanctions, and we are collecting data from a variety of sources about the impact of sanctions so that we can adjust accordingly, if necessary. The mechanisms are pretty good. That is not to say they are perfect; there is always scope for improvement. One of the things we are looking at is whether it would be desirable to give the UN Secretariat more capacity—not necessarily more resources, but perhaps from re-prioritising resources—to try to support these sanctions committees in a more coherent way. In the European Union the machinery is not quite so elaborate. We rely very heavily on EU missions in targeted countries to report back on the impact of sanctions. However, we have agreed principles in the European Union on the application of sanctions, which helps to streamline our approach quite considerably. Sanctions assistance missions were developed really for the Balkans during the early 1990s, when we were more interested in comprehensive sanctions than we have been since, and they were an attempt to strengthen the capacity of Balkans countries to implement and monitor sanctions in circumstances where border crossings were relatively easy. They have not been used since. I would not exclude their use again, but, as I say, the trend since then has been to focus more on the monitoring by the groups in New York, rather than sending assistance missions to the countries themselves. You mentioned regional sanctions. As a general principle they have a role to play and we should not exclude regional sanctions. The West African ECOWAS sanctions against Sierra Leone in the 1990s were not regarded as a good model for sanctions, and certainly we would like to see regions where they impose sanctions adopt the best-practice standards we have been discussing, i.e., awareness of the humanitarian impact, the importance of monitoring and the importance of careful design and clear objectives. I would not rule out regional sanctions in themselves. There may be cases where they can have a very important role to play. It is certainly true that in the case of a lot of sanctions, unless you have the support of neighbouring countries, regional countries, it will be much harder to achieve your objectives.


 
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