Applying the Lessons of The Gulf War Economic Sanctions to the Russian Invasion of Ukraine

Louis Steinkuehler

Vol. 44 Associate Editor

Russia’s unprovoked invasion of Ukraine has highlighted the tenuous nature of the United Nations’ ability to respond to crises.[1] However, the international community’s response to such acts of aggression within the international legal framework has not always been so impeded. The international response to the Iraqi invasion of Kuwait in 1991, while not lacking in controversy, was a unique opportunity seized by the international community to show its ability to respond effectively to the invasion of one state against another.[2] This marked a watershed moment in the application of economic sanctions law.[3] Despite some political discussion of the similarities of that moment with later conflicts, there has not been a deep dive into how those lessons are directly relevant to the response to Russia’s ongoing invasion of Ukraine. This blog will provide and apply that analysis. While the fact that Russia sits on the UN Security Council prevents some avenues of the international community’s response, as this blog will note, many lessons from Iraq are still applicable presently. The first way in which the international response to the Iraqi invasion of Kuwait was unique was that it constituted the most comprehensive and universally enforced economic sanctions regime in history.[4] UN Security Council Resolution 661 mandated that “all states shall prevent…the import into their territories of all commodities and products originating in Iraq or Kuwait.”[5] This was a rare example of measures under Article 41 of the UN Charter, which authorizes the Security Council to use a wide variety of non-military measures.[6] Furthermore, the sanctions were exceptional in that they affected nearly every aspect of economic relations with Iraq.[7] This not only included financial sanctions and an arms embargo,[8] but also unprecedentedly included food products.[9] The comprehensive nature of these sanctions minimized opportunities for evasion where previous sanctions regimes had failed.[10] Furthermore, while previous sanctions regimes had been built up gradually, Resolution 661 was unique in its swiftness in applying international sanctions to overtake the initial unilateral measures imposed by the United States and the European Communities. [11] However, the comprehensive and swift nature of the Iraq sanctions made coordination and enforcement especially urgent.[12] Resolution 661 allowed the Security Council to establish a Sanctions Committee to monitor and coordinate implementation of these sanctions.[13] In particular, the Committee could clarify uncertainty regarding compliance and authorize exceptions for humanitarian purposes. [14] Effectively, the Committee removed from individual states the discretion of determining what constituted a relevant humanitarian purpose. Beyond the Sanctions Committee, regional organizations also played an important role as vehicles of sanctions implementation, particularly, the European Community and the Western European Union.[15] Such extensive coordination benefitted states participating in the sanctions, as the sanctions significantly harmed the economies of some participants.[16] Additionally, to enforce compliance, the US initially took unilateral action, citing “the inherent right of collective self-defense recognized under Article 51 of the UN Charter”, in order to “conduct a maritime operation to intercept the import and export” of products from Iraq prohibited by Council Resolution 661. The controversy concerning the legality of this move was made moot when the Security Council adopted Resolution 666, which stated that states cooperating with the Kuwaiti government could deploy maritime forces to “inspect and verify” ship cargo and take “such measures commensurate to the specific circumstances as may be necessary”, which was seen as authorizing force for non-compliance of sanctions. The Security Council then approved Resolution 670, which called on countries to cooperate in preventing violations of the embargo, including imposing a duty on states to prevent aircraft bound for Iraq or Kuwait from using their airspace.[17] Applying these lessons to the case of Russia, the contextual constraints have forced the sanctions to be far more patchwork than was the case of Iraq. This is true both in terms of states participating in the sanctions regime and in terms of the parts of Russia’s economy that have been targeted. Given Russia’s seat on the UN Security Council, there have been no UN sanctions imposed so far. Instead, ongoing sanctions efforts are presently led by the United States, United Kingdom, and European Union.[18] However, many powerful actors in Asia—such as China and Turkey—continue to trade with Russia and are even seeking to expand those economic ties.[19] In terms of targeted sectors, with oil constituting 40% of all Russian exports, the most important sanctions are targeting Russia’s oil exports.[20] Western countries have barred Russia from making debt payments using foreign currency in US banks and Russian banks have been disconnected from the SWIFT system, which has impaired payments to Russia for oil and gas exports.[21] However, Gazprombank, the bank that handles payments for gas exports, has not been removed from the SWIFT system and can be used as a conduit for those entities otherwise disconnected from the international finance system. [22] The EU does intend to ban all refined oil imports from Russia in February 2023[23] and the G7 and the EU are also seeking to cap the price of Russian oil for those who will continue to import it.[24] If and when these sanctions are implemented, they will have a much more significant impact on Russia’s economy.[25] However, in contrast to the speed with which sanctions were applied against Iraq, the delay in banning oil imports has made the weakening of Russia’s war effort significantly less effective.[26] Not only have sanctions been incremental since the invasion earlier this year, but since the Russian invasion of Crimea in 2014.[27] Consequently, Russia has been able to continue to sell the same amounts of oil at much higher prices, as prices have surged and Russia has used that revenue to stave off a crisis and continue funding its war. [28] Additionally, this extra time allowed the Russian Central Bank to conduct measures that artificially stabilized the ruble and to look beyond the U.S. dollar and the Euro for foreign reserves—particularly to the Chinese Yuan. [29] Had the current sanctions and planned sanctions been imposed on Russia all at once—as was the case with Iraq—this would have led to a severe Russian financial crisis.[30] Finally, in the absence of a Security Council Resolution, there has not been a Sanctions Committee, akin to the Committee created for the sanctions against Iraq, established to coordinate economic pressure on Russia, nor have there been military measures to compliment the sanctions. However, this is where the concurrent role played by regional organizations in the Gulf War could make a big impact. The EU has indeed shown leadership in the response to Russia’s invasion of Ukraine.[31] This will prove particularly important because of the impact sanctions implementation will have on European states especially as winter approaches.[32] During the Gulf War, despite the sanctions significantly hurting the economies of some states participating in sanction, coordination encouraged numerous states to comply with the sanctions regime notwithstanding the negative ramifications on their own economies. [33] Presently, Hungary has questioned EU sanction and has explored increasing its Russian energy imports.[34] Similar to the role played by regional organizations and the Sanctions Committee, the EU will need to play a coordinating role to give sanctions cohesion and to ensure implementation of these sanctions. While the geopolitical landscape has changed significantly over the past three decades, the lessons of the international response to the Gulf War are still very much applicable today. In particular, a more comprehensive, swifter, and better coordinated international response, recalling that of the Gulf War, could help the current sanctions regime yield more success in deterring further Russian militancy in Ukraine.

[1] Claudio Grossman, The Invasion of Ukraine: A Gross Violation of International Law, 25 Hum. Rts. Brief 74 (2022). [2] Christopher John Sabec, The Security Council Comes of Age: An Analysis of the International Legal Response to the Iraqi Invasion of Kuwait, 21 GA. J. Int’l & Comp. L, 63, 63 (1991). [3] Barry R. Campbell et al, The Gulf War: The Law of International Sanctions, 85 Proceedings of Am. Soc’y of Int’l L. at the Ann. Meeting, 169 (1991). [4] Id. [5] S.C. Res. 661, ¶ 3 (Aug. 6, 1990). [6] Id; Charter of the United Nations and Statute of the International Court of Justice, art. 41, ¶ 1, June 26, 1945, 59 Stat. 1031, T.S. No. 993, 3 Bevans 1153. [7] Christopher C. Joyner, Collective Sanctions as Peaceful Coercion: Lessons from the United Nations Experience, 21 Aust. ybil, 241, 264 (1995). [8] Id. at 253 n. 54. [9] Paul Conlon, Lessons From Iraq: The Functions of the Iraq Sanctions Committee as a Source of Sanctions Implementation Authority and Practice, 21 Va. J. Int’l L. 633, 636 (1995). [10] Joyner, supra note 7 at 264 (1995). [11] Christopher Greenwood, Iraq’s invasion of Kuwait: some legal issues Iraq’s Invasion of Kuwait: Some Legal Issues, 47 The World Today, 39, 40 (1991); Joyner, supra note 7, at 264 (1995). [12] Harry L. Clark & Keith A. Matthews, Iraq/Kuwait Economic Sanctions: Trade Relations on a War Footing, 25 Int’l Law., 391, 401 (1991). [13] Joyner, supra note 7, at 249. [14] Conlon, supra note 9, at 653; Joyner, supra note 7, at 253. [15] Id. at 268. [16] Joyner, supra note 7, at 261 n. 75. [17] S.C. Res. 670, ¶ 3 (Sep. 25, 1990); Greenwood, supra note 11, at 41. [18] US, UK and EU Impose Significant Sanctions and Export Controls in Response to Russia’s Invasion of Ukraine, Skadden, Feb. 26, 2022, https://www.skadden.com/insights/publications/2022/02/us-uk-and-eu-impose-significant-sanctions. [19] China’s Xi says trade with Russia expected to hit new records in the coming months, CNBC, Jun. 17, 2022, https://www.cnbc.com/2022/06/17/chinas-xi-says-trade-with-russia-to-hit-new-records-in-coming-months.html; Turkey offers ‘a warehouse and bridge’ for metals trade to Russia, Reuters, Aug. 8, 2022, https://www.reuters.com/markets/commodities/turkey-offers-a-warehouse-bridge-metals-trade-russia-2022-08-08/. [20] Edward Wong, Ana Swanson, & Michael Crowley, Five Ways Sanctions Are Hitting Russia, N.Y. Times, Nov. 4, 2022, https://www.nytimes.com/2022/11/04/us/politics/russia-sanctions-ukraine-war.html. [21] Id; Here’s What the New, Tightened SWIFT Sanctions on Russian Banks Actually Do, Time, Mar. 2, 2022, https://time.com/6153951/swift-sanctions-russia/. [22] Too big to sanction? A big Russian bank still operates freely in the global economy because it helps Europe get Russian gas, NBC News, Jun. 18, 2022, https://www.nbcnews.com/news/world/big-sanction-big-russian-bank-still-operates-freely-global-economy-hel-rcna34123; The Real Story, Are Sanctions on Russia Working, BBC, at 20:50 (Sep. 3, 2022), https://www.bbc.co.uk/programmes/w3ct33pc. [23] What are the Sanctions on Russia and Are They Hurting Its Economy, BBC (Sep. 30, 2022), https://www.bbc.com/news/world-europe-60125659. [24] Id. [25] BBC, supra note 22, at 39:32. [26] Id. at 16:35. [27] Id. at 16:55. [28] Id. at 17:58. [29] Id. at 20:00, 22:10. [30] Id. at 16:55. [31] Skadden, supra note 18. [32] EU proposes to cap ‘excessive and volatile’ gas prices this winter, Guardian, Oct. 18, 2022, https://www.theguardian.com/business/2022/oct/18/eu-cap-gas-prices-winter-russia-ukraine. [33] Joyner, supra note 7, at 267. [34] BBC, supra note 22, at 42:02. The views expressed in this post represent the views of the post’s author only.