User:Afrikkee/Economic sanctions

Lead
The US government adds a secondary layer to sanctions that allows them to control the actions of non-US based firms, a recent example is the usage by the US and the EU of SWIFT to cut off Iranian financial institutions from the global financial market.

Article body
Any type of business connected to the US market, not just US-based firms, has to be aware of sanctions and boycotts because the US provides a secondary layer to their sanctions. The US market is simply too important in the global economy from a business perspective. Access to the US market is important to many international businesses, and even companies with limited direct exposure to the US market find it hard to keep functioning without having access to the US financial system. The US government starting after the 9/11 attacks passed regulations that give them the power to cut off non-US companies from the US market if they don’t oblige with certain sanctions implemented and they increased surveillance on financial transactions. This secondary layer gives the US government power over non-US-based firms and therefore increases the reach of the sanctions.

A recent example of secondary layered sanction is the 2012-2015 sanctions regime on Iran by the US together with the European Union. In 2012 the US and EU passed regulations that prohibited financial messaging services, like the international company SWIFT, to provide services to targeted institutions under sanctions in Iran. SWIFT plays a critical role in authorizing transactions, authentication parties, recording exchanges between entities, and it dominates the financial messaging between banks. This new regulation forced SWIFT to cut off Iranian banks out of the international system and caused major Iranian financial institutions, like the Iranian Central Bank, to be blocked from the international payment system ,