Examination of Witnesses (Questions 43
- 59)
TUESDAY 4 JULY 2006
DR KERN
ALEXANDER
Q43 Chairman:
Welcome. We are delighted you were able to come and talk to us.
Thank you very much for your written evidence, which we have and
which we have all read. We will ask you some questions and you
have some idea what we are going to ask you. There may be questions
that have arisen from your written evidence that others would
like to ask. Although you have sent us written evidence, do you
want to add anything to that as an opening statement or are you
happy just taking questions?
Dr Alexander: I feel that the written evidence
summarises my position and what I would say, so I am happy to
go right to questions.
Q44 Chairman:
My opening question therefore is: does the UK Government have
a clear and coherent approach to economic sanctions, in your view?
In particular, are the policy objectives of sanctions regimes
usually clearly stated?
Dr Alexander: I believe that in the last 10
years the UK economic sanctions policy has become much more clear
and the Export Control Act of 2002, for instance, really does
provide policy objectives. It provides specific definitions over
what UK export controls can cover: military goods, dual-use items,
technology and software that is related to military products.
In that respect, the Export Control Act, I think, is very clear
and it is a step in the right direction, of course embodying the
recommendations of the Scott Report. The other area of economic
sanctions is financial sanctions, where UK policy is pretty clearly
stated that Parliament can adopt enabling legislation and direct
the Treasury to implement statutory orders to enforce and to devise
financial sanctions. Therefore, in that regard, the Bank of England
has been delegated authority to impose financial freeze orders
on designated terrorists, on alleged drug traffickers, and also
to freeze the bank accounts of certain heads of state and government
representatives of states that the UK is party to financial sanctions
against, such as Zimbabwe. In that regard, the UK legislation,
and I think the regulatory framework, is pretty clear regarding
what the purposes of sanctions are. I think the one gap that someone
might say exists has to do with the area of general economic sanctions,
broader trade embargoes that deal with non-military goods, non-strategic
items, and then non-financial sanctions type of economic controls.
I think there is a bit of a gap in UK policy now. The US of course
has a very comprehensive set of economic and financial sanctions
for military goods as well as for general economic sanctions,
and then they have more specific financial sanctions that are
targeted. The UK Government has statutory authority to adopt economic
sanctions more generally, but they simply have not stated the
policy rationale behind the adoption of broader economic sanctions.
Maybe they are not needed. Maybe it is the determination of the
Government that they do not need to have broader economic sanctions
for civilian-type goods, but they certainly have, I think, a very
comprehensive regime regarding export controls on military items,
dual-use items, technology software and on financial sanctions.
Q45 Lord Powell of Bayswater:
When it comes to the actual implementation of the sanctions, do
we have all the necessary machinery we need and how is performance
in practice?
Dr Alexander: I believe that the legal and regulatory
framework is fairly robust in the UK regarding the implementation
of sanctions.
Q46 Lord Powell of Bayswater:
Is it applied effectively?
Dr Alexander: It is applied effectively. I think
in the area of financial sanctions it certainly is. We see the
Bank of England now issues orders and notices to the financial
services community to block assets of designated terrorists that
are on the international sanctions list as well as the lists that
are devised by the European Union. So the Bank of England and
the Treasury have been sending the notices out regarding financial
sanctions. I think the Export Control Act, on the other hand,
is going through a birth phase. It has just recently been adopted.
The enabling legislation was adopted in May 2004, and the effective
implementation of that remains to be seen. The DTI publishes reports
on compliance.
Q47 Lord Powell of Bayswater:
But clever people can always find ways round regulations and ways
of dodging and evading them and so on. Do you think a lot of that
actually goes on? Is our legislation sufficiently far-reaching
to stop that sort of activity?
Dr Alexander: I think there are some gaps in
the UK financial sanctions regime. For instance, if the Bank of
England issues a notice for the banks to block the assets of a
named individual, it only applies to the banking operations in
the United Kingdom; it does not apply for instance to the overseas
branches of Barclays or HSBC. They might have a branch operating
in Spain; it would not apply to the branch in Spain. The branch
is part of the bank in London; it is just a branch office. So
the financial sanctions regulations, I think, have a gap in that
regard. They do not want to be too extra-territorial, I do not
think, but they need to be sufficiently extra-territorial to cover
the overseas and branch operations of UK businesses.
Q48 Lord Powell of Bayswater:
What about the machinery for monitoring the effectiveness of sanctions?
Do we really have the capability to see and understand whether
they are proving effective or whether they are being circumvented?
Dr Alexander: I think the Treasury and the Home
Office publish an annual report on financial sanctions and terrorist
controls that appears to state the amount of money that is in
blocked bank accounts, and so we see some measures of what have
been going on through that. However, I do not think that there
is any relationship between what has been done and how the sanctions
are being applied and whether or not sanctions are achieving their
objectives. That is one gap, I think, it is very difficult for
policy makers to measure anyway. Certainly it is not clear right
now whether or not the blocking orders that the banks have been
applying in the UK are actually having an effect, that they are
enabling the UK policy-makers to achieve their objectives.
Q49 Lord Powell of Bayswater:
My point is that the monitoring of reports will tell you what
is being done; it will not tell you what is not being done. There
is probably quite a large area of things that are actually slipping
through the net. Do you agree?
Dr Alexander: Yes.
Q50 Lord Paul:
Where do you think, out of 10 countries, in terms of our objective
on sanctions, we have achieved the highest success?
Dr Alexander: Historically, I think in the case
of Southern Rhodesia the objectives were eventually met through
the UN Security Council sanctions regime that led to the transition
of the government. In South Africa, for instance, the UK participated
in the UN Security Council resolutions with regard to South Africa.
I think that the effectiveness of UK sanctions in each of those
cases depended on the level of international support Britain gets.
So you have to have effective enforcement and monitoring of enforcement
at international level in the Security Council. In that case,
Southern Rhodesia and South Africa, I think, are examples where
you could argue, although it took a while to take effect, that
actually it achieved the objective.
Q51 Lord Paul:
In Southern Rhodesia and South Africa, the belief was that sanctions
achieved a better purpose eventually because those governments
were depending upon those very countries for their existence to
back them regularly. They got a lot of support from those same
countries. It was achieved because they lost that support, but
that is not the case in a lot of other countries.
Dr Alexander: Another case where sanctions were
successful, I would say, is Libya. In the Libyan case, you had
a fairly intransigent regime that was involved in alleged state-sponsored
terrorism in the 1980s, and they were the object of unilateral
US sanctions, and the UN Security Council after the Lockerbie
bombing and the UTA flight bombing went into action and imposed
multilateral sanctions against Libya, which eventually brought
the Libyans to heel. That does not mean that they work all the
time, and so I think there are certain soft points in every government
regime that you are trying to impose sanctions against. Whether
or not sanctions are effective is very much a case-by-case analysis.
Q52 Lord Skidelsky:
Basically you have covered the ground of the question that I was
going to ask, but I will persist anyway because there are one
or two other points that can be brought out. As for the question
"how can we assess the effectiveness of UK policy on economic
sanctions?" may I suggest that the answer is we cannot. The
fact that B followed A does not mean that A caused B.
Dr Alexander: I think that is a very good point.
I should have prefaced my remark by saying that generally there
are four objectives of sanctions: behavioural modification; retribution;
punishment; and signalling. So it depends what objective you are
trying to measure your success by. Certainly, if you measure it
by behavioural modification, sanctions could be seen to fail quite
often, as in your suggestion, but in other areas where the goal
of sanctions is simply to say, "We are good international
citizens; we are participating in international multilateral institutions
and we are going to go along with the US, with Japan or whatever
they are doing", then the effectiveness of sanctions might
be viewed in a different light.
Q53 Lord Skidelsky:
That is interesting. I was going to go on to that, and quite rightly
in your written evidence you do give the three possible objectives:
behaviour modification; retribution or punishment; or as a signal.
The first one obviously is designed to affect behaviour. The second
one is designed to punish behaviours to such a degree possibly
that the behaviour might be changed. But the third one is purely
symbolic. In that sense, sanctions can never fail. Obviously,
if the object of sanctions is simply to express the disapproval
of the world community and the world community or enough of it
expresses disapproval, then sanctions succeed; they are effective.
Therefore, is that any reasonable test of the effectiveness of
sanctions to say that in their symbolic form they undoubtedly
do what they are supposed to do?
Dr Alexander: I think there is a case to be
made. I do not think it is sufficient to say that sanctions are
symbols, or that they just signal, but at least they voice disapproval
in the world community of nations. Even though, for instance,
I think it is legitimate for a small country to adopt economic
sanctions against a targeted state that might be approved for
sanctions by the Security Council, even though that small state's
adoption of sanctions will have very little effect on the behavioural
modification of the target, it is important that the small state
be able to signal to the rest of the world that they are part
of an alliance of countries that are denouncing the behaviour
that is taking place.
Q54 Lord Skidelsky:
Why?
Dr Alexander: Because of political communication;
just because we cannot change a country's behaviour does not mean
that we should not express our disapproval. If we do it simply
verbally through diplomatic means, that is one way. If we do it
through economic measures that impose economic cost, that is another
way of doing it. Economic sanctions can be a political instrument
for a number of different objectives. Just because it does not
change the target's behaviour does not mean that voicing your
displeasure is necessarily a bad policy.
Q55 Lord Skidelsky:
My difficulty is that it makes the test of the success of sanctions
too easy.
Dr Alexander: Yes, exactly, and I would think
that is one of the problems, of course, that signalling itself
is not sufficient. Ideally needs to be linked to some other objective.
Q56 Lord Lamont of Lerwick:
Following on from that, if we take sanctions as expressing disapproval,
and sanctions as punishment, who is punished? Who bears the price?
That is surely the question one has to ask. If one thinks of the
sanctions that were in existence against Iraq before the invasion
of Iraq, those were criticised by many people as causing shortages
of medical supplies and suffering by ordinary Iraqi people, but
the defenders of sanctions said that was because of action that
was taken by the Iraqi regime pre-empting resources that might
have gone to ordinary people, though that defence rather indicates
that sanctions were not working as they were intended to work,
and that would in itself appear to be a criticism of the sanctions.
Dr Alexander: I agree that the Iraqi sanctions
had collateral damage in the economic and social sense on the
broader civilian population in that the economic and social damage
it did to the civilian population may not have been effective
in persuading the leadership to comply with Security Council resolutions
or persuade the leadership not to be involved in developing weapons
of mass destruction.
The Committee suspended from 4.12 pm to
4.20 pm for a division in the House
Q57 Lord Lamont of Lerwick:
Following on what Lord Skidelsky was saying about retribution
or punishment, surely one has to ask oneself who is punished,
who bears the cost of the sanctions? If one looked at the sanctions
that were in existence before the invasion of Iraq, there was
a lot of criticism of those sanctions that they hit ordinary people,
that they hit hospitals, there was a shortage of medicines, of
incubators for babies and so on. On the other hand, the defenders
of sanctions said: "Ah, this is not because of the sanctions
but because of the regime that is pre-empting resources that would
have been available to ordinary people." Even that defence
of sanctions seems in itself to acknowledge the ineffectiveness
and the harm that sanctions do to ordinary people.
Dr Alexander: I would certainly agree that economic
sanctions, general economic embargoes and trade embargoes do enormous
harm to ordinary people, the civilian population. For instance,
the US embargo of Cuba has imposed tremendous economic cost and
social suffering on the Cuban people. Whether it is achieving
the objective of removing Castro from power is another question
entirely. In the case of Iraq, I agree entirely with what you
have said, that the UN Security Council economic embargo of Iraq
was one that was overreaching because it was too broadly based.
It imposed a lot of suffering on the civilian population. There
was a debate in 1999 and 2000 that the Iraqi sanctions should
become more targeted, more focused, on military items, on dual-use
equipment, on financial sanctions, and also on monitoring the
borders of Iraq to ensure that imports were not coming in from
Jordan or from other neighbouring Arab states. There was a move
to shift the sanctions to become more targeted. Of course, the
role of the oil for Food Programme was to allow Iraq to sell oil
and to use the proceeds for humanitarian purposes, but that turned
out to be an unsuccessful programme, as the recent Volcker Commission
report shows. I agree entirely that one of the main problems with
sanctions was that they were too broad and too general. That is
why in the 1990s we see a number of countries begin to adopt more
targeted financial sanctions. I suggest that those might be more
effective in achieving some objectives rather than broad-based
embargo type sanctions.
Q58 Lord Lamont of Lerwick:
Do you think it is a coincidence that three of the longest lasting
dictatorships—North Korea, Cuba and Iraq until the war—were
countries that had long-lasting general US sanctions against them?
Dr Alexander: I think that is a fair comment
on the failure of US policy to achieve change, to achieve the
stated political objective, which is to bring democratic government
to Cuba and to reimburse confiscated assets, and also, in the
case of North Korea, to induce them to stop development of weapons
of mass destruction and try to bring about economic and political
reforms there. US policy has not been successful in that regard,
certainly, yes.
Q59 Lord Macdonald of Tradeston:
Can I ask how you might distinguish in Iraq between the received
wisdom that the sanctions were very ineffective and the fact that
we have subsequently discovered that Saddam had abandoned his
weapons of mass destruction and we could therefore argue that
it had been highly effective in whatever form? How would you distinguish
between the different elements of that sanctions policy?
Dr Alexander: I think that is assuming that
there were no weapons of mass destruction, and I am not privy
to any intelligence reports. I think the stated positions of the
US and UK Governments were that Saddam was developing the capability
to develop weapons of mass destruction. Whether or not he had
them is another question. A lot of doubt has been raised regarding
that. Certainly his intent to develop WMD capability was a breach
of Security Council Resolution 687, and the US therefore tried
to justify that and some of the Security Council members were
for maintaining sanctions. Certainly you might say that Saddam
did not have the economic means to get the programme off the ground.
In that case, you could arguably say that the sanctions were successful.
Lord Lamont of Lerwick: On
the other hand, one justification for war was that it was better
than the sanctions.
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