Year in Review: How Sanctions Changed in 2023 with 17 charts
2023 was the the second largest year for sanctions on record following the historic number of sanctions adopted in 2022. There were 11,097 new designations in 2022 and 6,058 new designations in 2023, nearly five times the number of additions in 2021. Russia solidified its position as the most sanctioned country in the world, doubling down on its invasion of Ukraine; Hamas officials and financiers were belatedly sanctioned in response to their October 7th attack; and countries like Iran, Belarus and Syria faced continued sanctions.
This report is based on Castellum.AI’s global risk database which captures changes to sanctions lists every 5 minutes.
But first, how have sanctions globally changed in 2023, and how does this compare with the last three years?
Major sanctions-issuing jurisdictions like the US and EU continued to expand their sanctions programs in 2023, but the number of new sanctions slowed from 2022 when an international coalition of Western countries imposed a record numbers of new sanctions in response to Russia’s invasion of Ukraine.
In 2023, all major jurisdictions that issue autonomous sanctions expanded their sanctions programs by over 10%. The US Department of Treasury issued 2,376 new sanctions designations in 2023, only slightly below the over 2,441 designations issued in 2022. Meanwhile, Canada, France, the EU, Switzerland and UK all expanded their respective sanctions programs by over 600 new designations in 2023.
Conversely, sanctions by the United Nations, which implements the only global sanctions regime, continued to shrink for the fourth year in a row. Over 2023, the total number of UN sanctions declined from 956 to 859 designations. The decline highlights the discord between the five permanent members of the United Nations Security Council’s (UNSC), who must unanimously approve new UN sanctions. Poor relations between western members – France, the UK and US – with China and Russia hinder the implementation of new UNSC sanctions as a result.
Top Sanctions Targets in 2023
As in 2022, sanctions targeting Russia outweighed sanctions against the next 20 most-sanctioned countries in 2023 combined. With the exception of four sanctions designations pertaining to the Wagner mercenary organization’s operations in the Central African Republic, all 4,521 sanctions against Russia in 2023 relate to Russia’s ongoing war in Ukraine or the evasion of existing sanctions imposed on Russia.
Other sanctions hotspots in 2023 include:
Iran: 894 new sanctions target Iranian support for Hamas, provision of supplies to Russia enabling its war in Ukraine, continued support for Houthi rebels in Yemen, WMD proliferation, human rights violations, or evasion of existing sanctions imposed against Iran.
Belarus: 235 new sanctions target Minsk’s continued support for Russia’s invasion of Ukraine as well as the government’s continued crackdown on the opposition.
Myanmar: 220 new sanctions against Myanmar targets government officials and companies or persons enabling the military junta’s continued crackdown on the opposition following a February 2021 coup.
Syria: 145 new sanctions target government-linked organizations and persons providing financial support to the government, human rights abuses and Syrian government links to Hezbollah and Iran.
Who Was Removed from Sanctions in 2023?
Sanctions targeting persons or organizations located in Colombia dropped significantly in 2023, all 174 delistings relating to parties previously linked by US OFAC to narcotics trafficking and organized crime.
Other jurisdictions with removals in 2023 include:
Iran: 93 delistings primarily related to parties previously sanctioned for WMD proliferation.
Russia: 78 delistings primarily related to parties previously sanctioned for facilitating Russia’s foreign interventions or other foreign activities.
China: 36 delistings primarily related to parties that had been linked to WMD proliferation pertaining to North Korea or Iran, or parties located in China facilitating Russia’s circumvention of sanctions.
Mexico: 21 delistings were related to parties previously involved in narcotics trafficking and organized crime.
Terrorism and Human Rights Top Sanctions Themes in 2023
The 1,044 thematic sanctions adopted in 2023 is nearly double the thematic sanctions adopted in 2022. Thematic sanctions targeting specific activities like human right abuses, terrorism or weapons proliferation are increasingly popular relative to country-specific sanctions programs. With the exception of designations within Russia or Iran sanctions programs, the number of designations issued under thematic sanctions programs were equal or higher to sanctions implemented under country-specific programs like Belarus, Myanmar or Syria.
Global Magnitsky Sanctions Programs Mature in 2023
Global Magnitsky-type sanctions, which target human rights abuses and corruption globally are becoming part of the standard policy toolkit for major sanctions-issuing jurisdictions. Notably, 2023 was the first year all western-aligned jurisdictions with Global Magnitsky programs adopted sanctions, indicating increased coordination in targeting human rights abusers and corrupt actors.
By enabling countries to target sanctions against abuses irrespective of location by adopting new country-focused sanctions programs. For example, Global Magnitsky sanctions imposed by the United Sanctions this past year included 21 German companies designated for their links to corrupt former Afghan officials.
US Outpaces Allies in Issuing Terrorism Sanctions in 2023
Terrorism-related sanctions designations were the largest thematic sanctions story of 2023, in large part due to continuing pressure on terrorist groups, financiers and other enablers. However, there has not been clear coordination among major sanctions-issuing countries in this regard, and the United States accounted for 83% of all terrorism-related sanctions in 2023.
What about Sanctions Against Hamas and the War in Gaza?
Notably, the number of sanctions adopted last year targeting Hamas following the 7 October attack is limited when compared to other sanctions developments. Major sanctions authorities in the US, EU and UK have long designated Hamas or its military wing as a terrorist organization, but only 86 new designations targeting Hamas or related parties were adopted through the end of 2023.
Additionally, there are no sanctions programs targeting Palestine or Hamas specifically, with the exception of one sanctions program implemented by US OFAC, and the majority of sanctions issued in 2023 against parties located in Palestine were issued under broader terrorism sanctions programs.
Castellum.AI’s Israel & Palestine Sanctions Dashboard has the latest information on sanctions targeting Hamas.
Sanctions Pressure on Crypto Assets Continues to Expand
The total number of sanctions targeting crypto addresses expanded by 25% in 2023 from 2022 with Israel imposing 50% of new sanctions targeting crypto over its use in terrorist financing.
The US remains the primary sanctions-issuing jurisdiction with global reach imposing sanctions on crypto addresses. While Japan and the UK have also started imposing sanctions on crypto addresses, this policy tool is used infrequently and the EU still has not included crypto addresses in targeted sanctions to date.
Countries Under Continued Sanctions Pressure in 2023
Russia Remains Most Sanctioned Country
As the second anniversary of Russia’s invasion of Ukraine approaches in February, the country remains the top target of new sanctions, with 4,521 targeted sanctions against Russia implemented in 2023. Despite reports of decreased cooperation among G7 countries and their allies imposing sanctions against Moscow, total sanctions adopted against Russia increased by 36% in 2023.
Castellum.AI’s Russia Sanctions Dashboard has the latest information on sanctions targeting Russia over it’s war in Ukraine.
China Engages Russia, Iran and North Korea Despite Sanctions Response
Targeted sanctions against individuals and organizations located in China expanded by over 270% last year compared to sanctions adopted in 2022. This expansion is noteworthy when considering there are no sanctions programs specifically targeting China, unlike Iran or Russia, which are subject to 16 and 7 OFAC sanctions programs, respectively.
The growth of sanctions targeting parties in China in 2023 reflects ongoing sanctions evasion activities linked to countries like Iran and Russia, weapons proliferation and drug trafficking.
Iran Faces Coordinated International Pressure
New sanctions targeting Iran in 2023 nearly doubled from the previous year, reflecting the reintroduction of sanctions related to Iran’s nuclear program as negotiations to revive the Joint Comprehensive Plan of Action (JCPOA) stalled. Notably, the EU, UK, Switzerland and others joined in issuing new sanctions against Iran in 2023, reversing the previous trend in which the US largely sanctioned Iran in isolation.
In addition to sanctions targeting Iran’s nuclear program, new sanctions against Iran in 2023 focused on Tehran’s continued support for terrorist organizations like Hamas following the 7 October attack in addition to domestic human rights abuses following the country’s 2022 protests.
Sanctions Target Belarus for Political Oppression and Support for Russia
Coordinated action against Belarus made the country a top target for sanctions in 2023 based on the Lukashenko government’s continued crackdown on the political opposition alongside the country’s ongoing support for Russia’s invasion of Ukraine.
Myanmar Under Pressure over Human Rights Abuses
Myanmar may have flown under the sanctions headlines radar in 2023 relative to other top targets, but the country’s military-led government and parties enabling human rights abuses and crackdowns on the opposition continue to be targeted for sanctions in the wake of Myanmar’s February 2021 coup.
Sanctions Against Syria Target Evasion Efforts and Human Rights Abuses
Syria continued to be targeted for new sanctions in 2023, with coordinated action by the US, EU and UK targeting financial facilitators enabling the Syrian government – along with its allies, Hezbollah and Iran – to continue accessing international financial services in circumvention of existing sanctions. Moreover, the US continued to target militant groups in Syria accused of human rights abuses.
Sanctions Predictions for 2024
Sanctions Pressure on Iran Expands Across Multiple Sanctions Streams: In 2023, Iran stepped up its support for terrorist organizations like Hamas and Hezbollah, encouraged Houthi attacks on Red Sea shipping lanes, expanded its support of Russia’s war in Ukraine and circumvented oil embargoes to increase exports after failed JCPOA negotiations. With no substantive change in policy in Tehran on the horizon, G7 and allied countries will continue to impose new sanctions and escalate enforcement efforts against Iranian sanctions evasion.
China Solidifies its Role as a Sanctions Evasion Clearinghouse: Individuals and organizations in China have established the country as a go-to route for sanctions evasion activity, including providing supplies to Russia enabling the war in Ukraine, purchasing Iranian oil and facilitating trade with North Korea. Expect to see continued sanctions pressure applied on China as a result of these external activities.
EU Steps Up Sanctions Enforcement: In December 2023, the EU announced an agreement to implement bloc-wide sanctions enforcement measures. Loopholes created by patchwork enforcement mechanisms at the member state level will be closed. Look for the first EU-level enforcements to start rolling in this year. Top targets for enforcement will include sanctions violations and sanctions evasion related to Russia and Iran.
Sanctions Targeting Palestine will be Limited: It’s clear that new sanctions against Hamas and its financial backers will continue in 2024, but the number of sanctions targeting individuals and entities within Palestine will be limited. Why? Gaza, Hamas’ stronghold, is subject to expanded Israeli occupation and was already financially isolated before the latest conflict.
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About Castellum.AI
Castellum.AI provides the most accurate, reliable and fastest global financial risk platform. We enable clients to screen customers, vendors and counterparties against sanctions, PEPs, adverse media, beneficial ownership and financial crime risk data.
We collect global sanctions information from primary sources using a patented process to extract, standardize, clean and enrich the data, extracting key information like IDs, dates of birth and addresses from unstructured data. Castellum.AI checks for watchlist updates every five minutes directly from issuing authorities.
Methodology
The data used in this analysis is based on all entries into sanctions lists in Australia, Canada, EU, France, Russia, Switzerland, UK, UN, and US and covers 1 January 2023 through 31 December 2023. This analysis excludes embargo-type sanctions programs which target an entire industry or country.
Location data is based on information available in the list source and is enriched based on Castellum.AI’s proprietary enrichment process. The location data may constitute a residence or registered address. For example, a designated company with an address in the UK may be registered at that address but subject to sanctions for activities outside of the UK’s jurisdiction. Notably, entries in the source lists from Canada do not include location data for designees and as such are excluded from all location-based analysis.
In the case of designations by China, the government has not developed a unified sanctions list as of the time of writing. Sanctions are announced ad hoc in press statements by the Chinese Ministry of Foreign Affairs, which Castellum.AI captures and enriches.
