U. S. Sanctions are an economic tool which in general terms show access to those named people or entities that pose a threat to u. S. National security. The exercise of u. S. Foreignty policy and National Security over the last decade. A favorite policy tool of this administration in particular. It the topic is also the subject of a report that we cowrote and we are releasing today. We will have seen that as you came in. The report includes findings of ours that came out of the workshop on signaling and deterrence of sanctions fun opdated either foundation. Bridging the gap with which it is succeeded in a leadership role. We have convened with the intenf achieving a better understanding of how the u. S. Administration and congress use sanctions for signaling and deterrence and gnoffer views and specific recommendations for how to improve the signaling and these instruments. Some of you may have seen over the weekend treasury secretary saying sanctions are, and im quoting, quoting, and important alternative to World Military conflicts. I think that that is importantti when talking about what they are signaling when talking about sanctions. It gives us a lot to think about there. How involved is the military and thinking abouts their youth. Sanctions have been used both in times of peace and in times of war. Relatively recently theyve been used against competitors as well as those that may pose a military threat to u. S. National interest. The topic of signaling is not merely a topic that we find interesting. A matter of Public Policy and research. It is something that we believe demand serious careful thinking i order to correct and update some misconceptions about what sanctions can do and what they do. Ot let me just impact that for a moment. We will move into a conversation with the rest of the panel we have invited here today. It is something that i feel ofstrongly, sanctions often have more potential to deter unwanted actions than to compel policy reversals or regime change. The greatest impact of sanctions sometimes involves the signal. Powerful as they may be. That they convey about the likely future policy. It is essential that officials, that they communicate clearly to the targets of sanctions and to everyone elsee that is watching us. So that they are not misunderstood tiered and when there is mixed messaging or inadequate public discussion including around the availability and process for delistingg and that is something i hope we will have the chance to discuss in depth, the credibility and the strength of this policy tool suffers. Mixed messaging on sanctions can confuse or seriously put off u. S. Security allies. Complicating how they engage with the United States over shared National Security and Foreign Policy interests and threats. For people that have worked in the diplomatic role, that is something you have had to look at tiered unfortunately, in challenging those relationships, there can be real effect on political feelings between the United States and those close counterparts. I just want to say that i do not offer that view about credibility problems associated with sanctions o to diminish the clearly very diligent people that work on sanctions and oppose policynd role. I think it is because of their excellent work that sanctionssa are as popular and as often used that they have become rather because this tool is maturing. More of a need for thinking about strategy and coordination of sanctions with others. The foundational military tools. Surrounding sanctions and giving definitions of the series of youth including four deterrence. For deescalation and how to signal about the use of sanction policy. To do that, we have the people that are with me up here on the stage. These are people that we particularly have respect for their thoughtful and insightful views on these topics. Weve asked them to bring their experience working on sanctions policy from the Treasury Department to the defense market and the Intelligence Community that experience to bear on this conversation. We have been very grateful for their feedback as we thought about this topic and Work Together to put the report we are releasing today. I am aboutut to ask for some thoughts from the panelists up here. We will have a conversation together and halfway through the event i will turn to the inperson audience for your questions, comments and comments and bright ideas. We will explain to you how you can participate in the interactive exercise. You may have seen some of the pieces of paper outside. We will explain to you what that means in a minute. As a final reminder, this this event is on the record and it is being recorded tiered jordan to my left. Collaborator and friend. Associate professor at the American University and codirector of the gap project. Susanna bloom, senior fellow and Defense Program director. Former deputy chief of staff for programs and plans for the deputy secretary of defense. David who is currently a partner, formerly thect Deputy Director of Deputy Director of the intelligence agency. On the and, director at the financial integrityty network. Senior director at the center on economic and financial power. Also formerly a Senior Advisor to the under secretary of treasury for terrorism and financial intelligence. We will start with jordan to kick us off. National security and Foreign Policy planners face many challenges. They are busy people. Why should National Security and Economic Policy professionals focus as a deterrent. What will that do to alter and improve both sanctions of the tool and u. S. Deterrent planning i want to thank the foundation for support and thak the center for American Security for hosting and convening this event. Valuable input on this project. Why we thought it was important to focus on this topic, sanctions have become the tool of choice for directing many problems. Nal human rights violations. Violations of territorial integrity, interference andv elections. In manyf cases, the greatest impact of sanctions can be in the area of deterrence. Deterring other countries from engaging in unwanted behavior. Persuading a country from developing a nuclear weapon, invading another another country. Conducting ethnic cleansing and i could think of many other examples. Sanctions and sanction threats can send really important signals. If another country does take a certain action, the u. S. Will impose certain costs on it. When that is clear, it can deter the other country from taking that step. Its important to focus on this because it is central to International Competition in the 21st century. The u. S. Is not integrating instruments of power with other instruments of national power. Diplomacy, military, foreign aid relationship between economic i and military means. The understanding of how economic and military works together as tools of deterrence. Aspects of the u. S. Military posture are clearly meant to deter aggression by other countries. Europe and east asia. Clearly they are in part to deter potential aggression by russia. Military strategists have developed clear models of conflict escalation. Which sometimes get referred to the shorthand of an escalation ladder. Coercion could start from threats and go up a ladder to limited militaryy action to various stances devastating kinds of military action. Economic coercion remains from these kinds of conflict escalation and deterrent models. Becoming central to u. S. Foreign policy. Sometimes morels devastating thn acts of military force. As financial sanctions in particular have become more and more powerful, they can wreak havoc on other countries economies that may be greater than the other type of havoc reached by certain types of military action. The problem of the models not taking economic coercion into account, the u. S. Using sanctions effectively as a tool of deterrence. We argue it increases the risk of unintentional conflict escalation. Unclear whether certain acts of military coercion represents escalation from certain acts of economic coercion. A target made then misinterpret what the u. S. Is doing. Perceive escalation when they did not intend to be escalating or may fail to perceive when the u. S. Did intend to be escalating. In a conflict. Clarifying the clarifying the relationship between military n ts can prevent these types of misconceptions. Clarifying thises can help them understand what the cost are likely to outweigh the benefits of doing so. Enable it to adjust its behavior accordingly. With that is our rationale, we, in, in the report, propose what we call a whole government escalation framework. The u. S. Government develop a government escalation framework that promotes military and nonmilitary means of coercion. This is not to suggest that we think economic should become a war fighting domain or we think they should be using sanctions more. We think that it should be quite judicious in its use of sanctions. Our goal is four deterrence and escalation to catch up to the reality of competition which they are being used as a tool as much as military and other instruments. In the report we sketch a simple version of a whole of government escalation ladder. We have placed seven runs on this latter going from private threats of coercion on the bottom all the way up to catastrophic action and intervening steps include public threats. That is is the second run. The third run on this latter. Damaging actions. Devastating actions and catastrophic actions aream the seven. The labels that we have used for them. An important idea here is that military and nonmilitary threats would be placed on this latter based on their expected impacts with the impacts of military economic and other nonmilitary actions such as Cyber Attacks waited on a single scale. They can be compared directly to each other. Developing a fully flexed path for love government escalation model would be a major undertaking by the u. S. Government. We think that it would be very worthwhile. We propose an interagency review designed designed to develop a new whole of government escalation framework. Waiting the severity of military and nonmilitary action. Based on the full range of their anticipated effects. The review should slip and put from outside experts and allies. We think dialogue is particularly important on this to develop an approach. The framework is developed. The National Security advisor could announce it publicly so that other countries competitors could understand it, be aware of it and be more able to interpret u. S. Actions correctly and it be more likely that the signals of the United States is intending to send to other countries would be received as intended. Liz mentioned this design exercise. We would like to get your input on this as well. There are more postit notes outside. We would like n you to take a moment during the course of the panel to lay down a coercive action or measure and think about where you may place it on the escalation ladder. You can put your post it note on one of the seven large pavers. Where you think it should go. We are interested to see what everyone comes up with on that. Thank you. You do not need to sign it. You can create multiple ones. If you feel torn about whether a particular example should live in one category or the other, you could write to and put them in both. This is a way to try and get out a question we have which is really the premise of what we are doing here. How do people think about the surtain severity of measures. Are we communicating clearly . S, communicating clearly about them. Are they understood . Looking out at some of you here with us today and knowing some of the issues or concerns with which you deal in your own research or government or business work, i thought of a couple that i may just offer to get yout thinking about this. And that i might write down here. One that i thought of, by the way, these are entirely in my mind realistic examples. Pursuant to existing sanction authorities or they have been discussed byor congress or the administration. One would be sanctions on primary issuance of sovereign debt and secondary trading of sovereign debt. Russian sovereign debt. Pursuant to concerns about russias election interference. An idea that has been circulating. Existing congressional legislation. What have a meaningful effect on emerging market trading globally where would you put that . Sanctions on Chinese CommunistParty Official involved in crackdowns. Protesters in hong kong pursuant to authorities of the new hong kong law passed and signed into law by the president a couple of weeks ago. Feel free to think about what concerns you and where you put that. Okay. Speaking tons some of these isss based on your experience in defense planning, working with defense policy officials. You are familiar with the way that that exercise works within some, many, defense circles. Thinking about escalation management. I wondered if you would please talk to us about how, in your experience, the Defense Community thinks about sanctions and talks about sanctions, even thinks about sanctions from a planning perspective. How you believe defense planners can usefully adapt thinking to include appreciation of economic coercion as o a tool of u. S. National security. Thank you for inviting me into your circle. You know, something that that we think about a lot. A return of great power competition. Competition with china. China. Competition with russia. Many aspects. Military aspects being being the only one. Diplomatic. It is just across the spheres. Those are silent. They dont even interact very well. That is why it why was so excited when liz asked me to look at the paper and be on this panel today it is a great opportunity. I would be remiss if i did not mention our report on competition with china that actually does something a little bit different and addresses all of these different aspects of competition together in one place. The escalation framework when you think about competition with an adversary should also address all of those things that jordan just outlined. A government approach to thinking about escalation in a competitive space. I have to say the department of defense definitely has an appetite for this. I cannot tell you how many meetings i sat and where the war fighter, person in charge of planning for the war would come into the pentagon and spend two thirds of your hour talking about what the state department should be doing or what should be happening over here. E u would have 20 minutes left to talk about the war. 2 the actual use of the military instrument. It is an indicator that there are people across the Defense Community that are really hungry to havee this conversation and eager for an interagency framework to allow us to plan together. There are some examples of inner Agency Planning between dod andc state. It is very hard. We speak fundamentally different languages. Have very different planning cultures. Different ways of thinking about competition and conflict. E i do not think that it sounds easy, but there is definitely a robust constituency that wants to talk more about this. It would be helpful if they were talking to experts in it as opposed to each other only. I will just say a little bit more about what is happening on the military side in terms of thinking about escalation. Ghour kind of contemporary thinking about escalation has many of its roots in the nuclear space. I feel like that is a context i always have to offer when we look at expanding these frameworks. Things like Economic Policy or sanctions. Not everythingth translates. Nicely. But thatd does not mean that ty are not valuable interesting concepts or pieces of concepts that you. Can work into your thinking. The u. S. Military is very accustomed to having escalation dominance meaning that the u. S. Could pursue an aggressive military agenda. Many Different Military adversaries. That is not the case anymore. Looking at competitors like china and to a lesser extent russia. Part of his project on a new american way of war. There is a need to kind of reinvigorate our thinking about escalation control by escalation dominance. I think that the time is actually right to open a little farther and invite other National Security members into some of the conversations. The only framework thing that i will mentioned before we move on is the idea of deterrence by denial versus deterrence by punishment. Again, because of the changing conflict in the evolution of threats in the military space posed by china and russia, looking very, very carefully about deterrence by denial. Stopping adversary from achieving its objectives. Making him believe ahead of conflict that you can do that and that is deterring them from trying it. I think we look at sanctions we are talking about deterrence by punishment. If you try that, you may succeed , but we are going to make it hurt. It will be so painful he will rethink making the attempt even though it is not a direct kind of lock edge or prevention of the adversary goal. That is another kind of dynamic that i think is important to keep in mind as we are thinking through this in an integrated framework. A couple comments about the parallels that i see. Some of the first and still mot important sanctions were also born out of a concern of nuclear proliferation. Ironic north korea, these are still among the oldest authorities. And thinking the methodology around their youth such as it is in this domain also has parallel here and thinking about escalation and sending a signal. Much theological work around that. One of the reasons we started this project. When it comes to the Global Financial system, the u. S. Still does have escalation dominance. When it comes to using the dollar, some needling concerns have caused people to think about whether escalation by punishment or escalation, rather deterrence by punishment or escalation control may actually be more useful concept to guide this thinking. Can i just ask you one followup aquestion, as you are t