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This testimony was delivered before the U.S. House of Representatives Committee on Financial Services and Subcommittee on National Security, Illicit Finance, and International Financial Institutions at its hearing entitled "Restricting Rogue-State Revenue: Strengthening Energy Sanctions on Russia, Iran, and Venezuela" on December 12, 2023.
Sanctions generally prove most effective before they are applied. Once applied, the immediate effectiveness is usually mitigated by various factors. These include a capacity to circumvent or minimize the repercussions of sanctions through domestically available tools, as well as external influences such as economic fluctuations, geopolitical conditions, and even environmental factors. Hence, even though sanctions are usually applied with the goal to promptly curb an adverse behavior of a state, actual realization of their objectives requires a more protracted timeline. In addition, the absence of broad, multilateral application and/or enforcement can further undermine the effectiveness of sanctions.
For petro-states such as Russia, Venezuela, or Iran, sanctions targeting their energy exports have traditionally been employed with the objective of depriving these nations of revenues, thereby constraining their military capabilities and eroding the popularity of their governments. However, the effectiveness of U.S. sanctions applied on all three countries has not always yielded satisfactory outcomes.
In particular, in the case of Russia, sanctions on energy flows imposed after the 2022 invasion of Ukraine have produced mixed results. This testimony seeks to analyze the impact of energy sanctions, elucidate the factors contributing to their unsatisfactory outcomes, and propose measures to enhance their effectiveness.
This testimony has not been submitted for editorial review.
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