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Bombs, Banks and Sanctions: A Sociology of the Transnational Legal Field of Nuclear Nonproliferation

Periodic Reporting for period 3 - PROSANCT (Bombs, Banks and Sanctions: A Sociology of the Transnational Legal Field of Nuclear Nonproliferation)

Reporting period: 2020-03-01 to 2021-08-31

• What is the problem/issue being addressed?
The regulation of key international security issues like nuclear proliferation has radically changed after 9/11. Since then, the international community has mobilized the private sector to fight the financing of terrorism, as well as money laundering. It has also privileged a financial approach to regulate the global flows between countries violating nonproliferation treaties and conventions and the rest of the international community. Banks have been asked to take much of the burden of making sure sanctions against would-be proliferators, terrorist sponsors and money launderers are enforced, by preventing payments from flowing from, and to, sanctioned territories and/or entities, and the rest of the world. This is an entirely new situation, which is completely under studied. Hence, we know little about how banks understand their new commitments as sanctions enforcers, and how their compliance branches identify suspicious transactions that may fall under the broad categories of terrorism and proliferation financing.

• Why is it important for society?
The new role of banks in the regulation of international security issues is a key issue for many societies in the world. Indeed global banks are key actors in charge of financing development projects in countries of the Global South as well as trade within the Global South and between the South and North. As more and more local banks in countries from the Global South are held in suspicion of holding assets and/or having clients that may be involved in money laundering, terrorism financing and proliferation financing, especially in the Middle East, global banks are tempted to “de-risk,” meaning that they no longer authorize any activity in and with these countries. This situation can have huge financial and economic implications for these countries, as well as for the advanced economies of the North, which are preventing from finding new market opportunities in the developing world. PROSANCT will assess which obstacles global banks face, and how regulators can best help them face their new responsibilities in an intelligent and non-discriminate way.

• What are the overall objectives?

The main objective is to understand the broad social, regulative and discursive logics at work in the emergence of this new regulatory field of counter-proliferation financing. PROSANCT members seek to understand how international institutions (from the UN Security Council to the Financial Action Task Force and the International Monetary Fund) as well as Finance Ministries and diplomatic missions in countries of the global North, explain to global banks which are their new obligations and how to comply with the latest regulations. To do so, three objectives need to be accomplished: 1) to develop a field analysis of the of the key actors who participated in the emergence of a transnational legal field of sanctions from the 1980s to the mid-2010s; 2) to unearth the visions of the world order embedded in the new counter-proliferation legal technologies.
In order to build the cohesiveness of the team around the PI, after recruiting the team of post-doctoral students and doctoral researcher in the spring and summer 2017, the PI has done a lot of work preparing the interview guidelines used by the two post-doctoral researchers, their selection of interviewees, and put in place procedures so that they respect the protocols agreed upon by the PI and the Ethics and Legal Team of the ERC. During the academic year 2017-8, he also conducted interviews together with each of the two post-doctoral researchers, so that the latter, who are less accustomed to interviewing diplomats, bankers or other elite professionals, would learn interviewing techniques and improve their skills in interview-based research. In addition, he has attended some of the policy conferences observed by the post-doctoral researchers. This was very effective toward accomplishing the goals of the first period. In total, out of total 170 interviews planned for the 5-year period, the PI and post-doctoral researchers have already conducted 65 interviews during this first period, and secured many other interviews for the next phase, during which the doctoral student will also start his own campaign of interviews (with a planned 50-60 interviews just for him). So the interview campaign is well under way, and the PI has started to write papers with each of the two post-doctoral researchers (one of whom has been renewed, while the other has found an outside position).

In addition, the PI has prepared the groundwork for the quantitative textual analysis of US diplomatic cables (either declassified and non-classified, or classified but leaked). The PI has also secured, after various visits to explain the project at Sciences-Po Paris’ MediaLab (with multiple encounters with Jean-Philippe Cointet), the hiring of an engineer of the MediaLab who will clean the data and prepare the technical work for the textual analysis. A contract will be extended to this engineer in October 2018.

Because of the recent political developments related to US diplomacy with Iran and the DPRK, PROSANCT team members have been extremely sought after by the media, think tanks as well as academics engaged in foreign policy work. The PI has presented the project multiple times, at the Graduate Institute (April and June 2018), University of Geneva (June 2018), GCSP-UNIDIR (June 2018), the European University Institute (October 2017), NYU Law School (October 2017 and September 2018), Law and Society Association Meetings (June 2018), Yale sociology department (October 2017). The PI and some team members have been very solicited by the media, publishing op-eds related to the topic in Le Temps, and being interviewed by journalists from Radio-Television Suisse, the New York Times, Buzzfeed and the Chronicle of Higher Education, which increased the media exposure of post-doctoral researchers. In addition, the PI has organized various meetings between the Geneva-based sanctions policy community and past interviewees who came to Geneva at the Graduate Institute; he organized two one-hour long webinars on Iran sanctions (May and July 2018), and co-taught a research seminar with the longest-serving European diplomat in charge of the Iran nuclear negotiation (Spring 2018), which has generated many ideas for PROSANCT team members and for MA students interested in pursuing research on related topics. This has also attracted the attention of MA and PhD student, with one PhD student (not funded by PROSANCT), asking him to supervise her PhD thesis on topics associated with the main PROSANCT research.
The PI will produce a significant research monograph published by a major US press in addition to at least 2 single-authored articles in major sociology journals. One doctoral dissertation by under the supervision of the PI will emerge from active collaboration with the PROSANCT team.

The PI and his team will also publish 4 co-authored articles in top-tier sociology journals. The PI and the first post-doctoral researcher (Anna Hanson) have already written a first draft of an article (see the section B of the report) on the software technologies of financial data management that global banks use to screen suspicious transactions in the fields of proliferation and terrorism finance, and plan to write a second article on how international organizations address the issue of de-risking by global banks. The PI and the second post-doctoral researcher (Farzan Sabet) are in the process of writing a first comprehensive article that maps the field of practice in counter-proliferation finance, focusing on the role of think tankers, lobbyists, lawyers, regulators and policymakers in the United States and Europe. The doctoral researcher (Jin Sun) is about to finish and defend his dissertation proposal, which reformulates and broadens the original question, by analyzing not only how European regulators understand the new commitments that European banks have to follow in the fields of anti-money laundering, counter-terrorism finance and counter-proliferation finance, but also how Chinese regulators and Chinese banks understand these new obligations. He will produce a single-authored monograph as well as an article written jointly with the PI on European regulators.

In addition, the PI and his team had planned to published 2 collective volumes in major presses: one co-edited volume on “Sanctions as Norm-Setting Technologies” with invited papers from sanctions specialists working on financial approaches to regulation in the fields of human-rights and counter-terrorism; and a second volume on the use of “relational biographies” in the study of transnational legal fields. They have advanced toward organizing the first conference to produce the first volume.