• The administration will take a more deliberate, pragmatic approach to sanctions policy.
  • The US will seek to coordinate sanctions with partners and allies.
  • US sanctions policy will push further into human rights, democracy, and technology issues.


US President Joe Biden inherited an expansive array of geographic and thematic sanctions authorities, a set of punitive “maximum pressure” sanctions campaigns, and a raft of Congressional sanctions mandates. It also inherited concerns about sanctions effectiveness, divergence from allies and international institutions, and diminishing returns (including incentivising a shift away from the US dollar financial system).

As it continues to review US sanctions policy, the administration’s actions so far demonstrate that it is likely to take a more targeted approach that coordinates with partners and allies and emphasises human rights, democracy, and anti-corruption. Enforcement will remain strict and companies should continue to strengthen – not relax – their sanctions compliance programmes in line with US guidance and good practices.

More targeted

The Biden administration favours “smart sanctions” that try to minimize unintended impacts on ordinary people, limit business spillovers, and focus pressure on specific targets. This signals a shift from the Trump administration’s embrace of “maximum pressure” sanctions that sought to destabilize target governments (Iran, Venezuela, North Korea) through broad economic restrictions. 

The Biden administration is keen to ensure that sanctions do not impede humanitarian relief. While US sanctions typically exempt humanitarian goods, administrative hurdles and compliance risks often deter legal transactions. As a result, in one of its earliest and most significant policy reversals, Biden in February 2021 lifted the foreign terrorist organization (FTO) designation of Yemen’s Houthi movement to facilitate humanitarian access to the conflict zone.

The philosophy extends to the COVID pandemic: Biden upon taking office directed his administration to review whether US sanctions were impeding pandemic responses. After months of little action but lots of pressure from civil society groups and fellow Democrats, the administration in mid-June issued general licenses covering COVID-related transactions, expanding existing humanitarian exemptions. 

More targeted sanctions could reduce broad business risk exposure – and there are recent indications that the Biden administration is more receptive to business input. For example, the administration in June 2021 revamped investment restrictions targeting China’s defense industrial base in response to widespread criticism (and legal setbacks). More targeted sanctions also preserve potential for calibrated escalation (and de-escalation). 

More coordinated

Strengthening US partnerships and alliances is the crux of Biden’s foreign policy. While the Trump administration was often insensitive to sanctions impacts on foreign countries – former Secretary of State Mike Pompeo acknowledged, for example, that reimposing sanctions on Iran would “pose financial and economic difficulties for a number of our friends” – current officials believe coordination will increase the credibility and effectiveness of US sanctions.

Trans-Atlantic sanctions cooperation is still far from the early 2010s, when the US and Europe marched in lockstep on Iran and Russia, but early evidence of increased alignment abounds. Re-joining the Iran nuclear deal – which would lift many US sanctions if not alleviate many business risks – is a US priority and olive branch to Europe and the UN. The US in 2021 has also coordinated sanctions with Europe and other G7 allies on Russia, Myanmar, and Belarus. New sanctions create new business risks, but increased coordination will help streamline compliance programmes and reduce policy ambiguities and conflicts in major sanctions regimes.

Perhaps the clearest sign of Biden’s new approach was when he overruled Congress to waive sanctions against the nearly completed Nord Stream 2 pipeline, citing a desire to improve relations with Germany (which reciprocated by sending a high-level delegation to Washington to discuss energy security). Returning to such “sanctions diplomacy” seeks to rebuild US credibility abroad and align economic statecraft with strategic aims (like deterrence of Russia and competition with China).

Values based

Promoting “democratic values” as a pillar of his foreign policy, Biden will maintain and expand human rights and corruption-related sanctions, encouraging partners and allies to do the same. As a result, sanctions policy will play a role in what the administration sees as strategic and ideological competition between democratic and authoritarian systems. 

Though often dismissive of human rights issues, the Trump administration actively wielded so-called Global Magnitsky sanctions against foreign actors accused of human rights abuses and corruption in a dozen countries. A handful of US allies – including Canada, the UK, the EU, and the Baltic states – subsequently enacted similar authorities, paving the way for an increase in coordinated action under the Biden administration. Indeed, Global Magnitsky authorities were the basis of coordinated sanctions against Myanmar in March. Biden has also sought to rally global action against forced labour abuses. 

However, lack of coordination does not necessarily mean lack of action on human rights. For example, Biden in early June stated that anti-corruption was a core national security interest and simultaneously sanctioned influential Bulgarian oligarchs and their businesses (over conspicuous EU silence). The administration has also maintained human rights-related sanctions against China and recently targeted high-level Nicaraguan political officials for human rights abuses and undermining democracy. 

Human rights-related sanctions signal US commitment to a “values-based” foreign policy – but also extend sanctions risks to new jurisdictions, sectors, and transactions.


The Biden administration will continue the trend of active and expansive use of sanctions in US foreign policy. Compared to the prior administration, this is likely to involve more targeted implementation, more coordination with partners and allies, and more emphasis on human rights, democracy, and anti-corruption. The administration will continue to face constraints from a more activist and empowered Congress, but the frequency and severity of disputes over sanctions policy are likely to decrease.

Overall business risks from sanctions, however, will remain elevated. Even if US sanctions become more coherent, international companies continue to face a complex environment marked by a proliferation of sanctions policies, lists, and triggers. Furthermore, expansive use of sanctions by the US and its allies is driving the adoption of countervailing sanctions by Russia and China, which – though currently limited – may pose compliance conflicts for some companies.

Companies should continue to strengthen sanctions compliance programmes in line with guidance from the US Office of Foreign Assets Control (OFAC) and other good practices, including risk assessment, training and awareness, due diligence, and a suitable management framework.

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