[The Journal] Do Sanctions Still Work?

For decades, economic sanctions have been Washington’s preferred tool for pressuring adversaries without resorting to military force. The United States has used them against Iran, Russia, North Korea, and a growing list of other governments, betting that cutting off access to global financial markets and trade would force behavioral change. At their peak, sanctions were seen as a decisive, low-cost alternative to armed conflict — a way to make a hostile government feel pain without firing a single shot.

Yet that confidence is eroding. Countries targeted by sanctions have spent years building workarounds — parallel financial networks, alternative payment systems, and shadow trading channels that reduce their dependence on the dollar-dominated global economy.

Iran, in particular, has spent more than forty years refining its ability to get around U.S. restrictions, exporting oil through front companies, falsified ship registries, and complicit intermediaries in friendly jurisdictions.

The result is a growing gap between the formal scope of a sanctions regime and its real-world impact.

Economists and foreign-policy analysts increasingly argue that the effectiveness of sanctions depends on near-universal enforcement — and that is becoming harder to achieve. China, India, and several Gulf states have been willing to absorb sanctioned goods or provide financial services that Western banks refuse, giving targeted governments a critical lifeline.

After Russia’s full-scale invasion of Ukraine in 2022, the West responded with the most sweeping package of sanctions in modern history — freezing hundreds of billions of dollars in central bank assets, cutting major Russian banks off from the SWIFT messaging system, and restricting exports of advanced technology. The expectation was that the Russian economy would buckle quickly. Instead, it adapted.

Russia redirected its energy exports to Asia, restructured its supply chains through non-allied countries, and leaned on a network of smaller banks in Turkey, the UAE, and Central Asia to process transactions.

Moscow also benefited from high global energy prices during much of the war, which kept export revenues elevated even as the volume of trade with Europe collapsed. The war economy became, paradoxically, a vehicle for fiscal stability — at least in the short term.

Analysts describe this as the sanctions fatigue problem: the longer a sanctions regime remains in place without producing visible political concessions, the harder it becomes to maintain international coalition support and domestic political will.

Russia’s ability to keep functioning — and even to sustain military spending — has reinforced the argument that unilateral sanctions by a single bloc are insufficient when major economies outside that bloc remain willing to trade.

Against this backdrop of diminishing returns, some U.S. lawmakers are pushing for a tougher legislative approach. Senator Richard Blumenthal of Connecticut has introduced a new sanctions bill targeting Russia, arguing that existing measures have not gone far enough and that Congress needs to tighten the screws on Moscow with more secondary sanctions — penalties aimed not just at Russia itself, but at any third-country entity that helps it evade restrictions.

Secondary sanctions carry significant diplomatic risk: they can antagonize allies and neutral parties who feel their sovereignty is being overridden by U.S. law. But proponents argue they are the only credible enforcement mechanism left.

The broader debate centers on whether sanctions should be reformed, replaced, or simply accepted as a partial tool with inherent limits. Some experts advocate for pairing sanctions with positive incentives — a carrots-and-sticks model — rather than relying solely on economic punishment.

Others warn that the real damage to sanctions credibility comes from inconsistent enforcement — carving out exceptions for politically sensitive partners while applying full pressure to adversaries, which allows targeted governments to highlight the hypocrisy and rally domestic and international support.

The question Washington faces is less about whether sanctions work in theory and more about whether the political and institutional infrastructure to make them work still exists in an increasingly multipolar world. As the global economy fragments into competing blocs, the dollar’s centrality — the very foundation of sanctions power — may itself be at risk.