In the world of art and finance, Nazem Ahmad, who is under American sanctions, has been accused of smuggling half a billion dollars for a Lebanese militant group. This incident has raised political concerns among Western policymakers, who are trying to tighten sanctions and make them more stringent. The EU’s 13th wave of measures against Russia targets Chinese and Indian companies supplying weaponry to Vladimir Putin.
The surge in financial warfare is unprecedented, but there are more sophisticated ways to circumvent sanctions as well. The non-aligned countries, including Brazil, India, and the UAE, have thwarted America and Europe’s aims and continue to do business without giving up access to the dollar. These countries have become increasingly important in the international financial landscape and have raised the costs and lowered the benefits of Western sanctions.
The West has imposed trade embargoes and financial sanctions on countries and entities deemed hostile, including Iran, Russia, and Israeli settlers. However, third countries facilitate evasion of these sanctions by expanding options for the West’s enemies. They have established their own rouble- and yuan-based payment systems to bypass Western restrictions. Furthermore, third-country governments have a laissez-faire attitude toward sanctions-breaking or tacitly approve it. Indonesia and the UAE are on the greylist of the Financial Action Task Force, in part because they are accused of knowing about the bad behavior of local banks.
While measures to reduce evasion in places that use the dollar could be considered, it could come at the cost of encouraging evasion elsewhere. The West’s campaign to reassert its dominance over the global financial system could see it lose control, once and for all.
In conclusion, Western leaders have shied away from drastic measures and there is a delicate balance between imposing stricter sanctions and avoiding further evasion. The escalation of financial warfare has led to challenges for Western policymakers and raised concerns about the effectiveness of sanctions. As commercial importance shifts to non-aligned countries, the future of sanctions and financial dominance is becoming increasingly uncertain.
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