Periodic Reporting for period 4 - PROSANCT (Bombs, Banks and Sanctions: A Sociology of the Transnational Legal Field of Nuclear Nonproliferation)
Reporting period: 2021-09-01 to 2022-08-31
• 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 and nuclear proliferation. Banks have been asked to ensure that sanctions against nuclear 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. 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 sanctions.
• 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 under sanctions, especially in the Middle East, but also in Russia and China, 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 transnational field of sanctions. 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, two 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.
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 and nuclear proliferation. Banks have been asked to ensure that sanctions against nuclear 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. 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 sanctions.
• 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 under sanctions, especially in the Middle East, but also in Russia and China, 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 transnational field of sanctions. 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, two 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.
The PROSANCT team has produced a sociological study of the transnational field of sanctions by conducting about 110 interviews with sanctions specialists in the United States and European Union. In parallel, it has advanced the study of digital archives of US diplomacy to understand how the language of unilateralism and multilateralism is used to frame the design of sanctions and their implementation by global banks. The team has published award winning articles in the highest ranked journals of the discipline that provide a new descriptive model showing how global governance of banks works in the era of financial sanctions, which highlight the origins of "derisking". In addition, they have contributed to, and lead the publication of, edited volumes on unilateral and multilateral sanctions, paying particular attention to the role of the UN Security Council. Together, they have prepared two monographs that will be sent for publications, as well as multiplied interviews and media appearances in many European media, to explain the way sanctions work, and their effects on global trade, including in the humanitarian sector.
The PROSANCT team will produce two significant research monographs in addition to the 10 already published book chapters and peer reviewed articles. These articles have already inspired a range of inter-disciplinary analyses of the operations of sanctions and their effects on global governance reform and the turn toward hegemonic forms of rulemaking, financial exclusion and derisking in the trade of humanitarian goods, or the logic of data surveillance and the digitalization of the economy. Together, these publications explain how financial sanctions have put an end to the era of unbridled financial globalization and raised the specter of deglobalization. They constitute key contributions to future policy discussions about the future of the international liberal order and the role that the United States, Europe, and China, will play in transforming the rules of financial capitalism in the twenty first century.