Key Learning M0ments
- We found out that private companies already rely on more robust tools than the list we proposed to create. Given our previous week’s hesitation around IC concerns, we’ve decided to scrap the list MVP.
- Speaking to a number of former State Dept. folks didn’t yield the “grab it out of our hands” moment that we hoped regarding our internal wiki idea. While this isn’t necessarily an invalidation, it also isn’t support for the idea.
- Speaking to two former Ambassadors who were both involved in the Six-Party talks indicated that information coordination is a significant challenge within the enforcement ecosystem.
This week we used our MVPs to test three hypotheses with potential beneficiaries to a mixed result.
- The démarche process is overly complex and takes too much time for State Country Officers.
- Private companies unwittingly violate sanctions and a public list of suspected evaders would help these companies comply.
- Enforcement priorities are not driven by or responsive to the negotiation team.
Our interviews this week included a number of former State Department officials, including two former Ambassadors who were both involved in the Six-Party talks. We also talked to a number of academics and former Commerce Department officials.
As to the first hypothesis, we had hoped that talking to folks from the State Department about our idea to create an internal wiki for known sanctions evaders would result in the fabled “grab it out of our hands” moment. While the people we were able to talk to hadn’t worked directly on the démarche issue recently, none of them seemed to agree that it posed a significant challenge to State Department officials. No one told us directly that this MVP was a bad idea or would have negative consequences, but neither did they indicate that it would be a useful tool. As a team we have decided to continue trying to talk to people more directly involved in the démarche process while making sure that we respond appropriately to the feedback we have received. Essentially, we are putting this MVP on the back burner as we move forward with other ideas.
The MVP used to test the second hypothesis, the idea of creating a more robust list to help private companies with their due diligence regarding sanctions, was met with a much firmer negative response. We heard from some of our interviewees that not only did commercially available tools already exist that companies rely on, these companies also don’t normally use ignorance as a defense. Given that we as a team had previously had qualms with the idea that creating a list would have negative consequences for the intelligence community, we have decided to abandon this potential product. We all agreed that it would be better to start over with new ideas than to move forward with a product that our beneficiaries don’t need and that will negatively impact other actors in this space.
We discussed our third hypothesis with a number of our interviewees, notably Ambassadors Hill and Stephens. We have been getting the sense over the last few weeks that the major challenge in the sanctions enforcement space is not the availability of intelligence or the capacity to interdict when necessary, but that the tools of enforcement are not coordinated with the goals the drive the imposition of sanctions in the first place. An anecdote from the Ambassadors involved their experience during the six-party talks, when negotiations were abandoned by the North Koreans following enforcement actions against BDA, a financial institution used by the regime. In that case, the untimely enforcement of sanctions led to the opposite of the strategic intention of those sanctions, which was to cripple the North Korean regime sufficiently enough to force them to the negotiation table.
While we still haven’t been able to talk to the current negotiation team, talking to members of the six-party talk team was our closest approximation and we think that it continues to represent the present day challenges in this area.
Where We Stand
The result of our interviews this week have led us to graph last week’s potential MVPs on a spectrum of difficulty and value add.
We’ve decided to focus on the upper right hand corner of the graph as we move forward. We want to find ways to improve the process around how sanctions are prioritized and see if that process can be implemented with a greater focus on strategic goals. The first aspect which is to determine if we have accurately mapped out the process as it currently stands. This will be a major task for the coming week as we check our understanding against that of actors in this space. While there are a lot of actors involved and many different layers to this process, at the broadest level we think that the ecosystem can be displayed using this chart:
We need to fill in the gaps and run this by more interviewees in the coming week. Our tasks moving forward include: