Sanctions Effectiveness
=======================

Sanctions effectiveness is John Kiriakou's critique of how the United States has come to use economic sanctions. He argues sanctions have been imposed against so many disfavored countries that nations like China have simply built workarounds, noting that in China he found it difficult to pay with a Visa card because merchants preferred a domestic "Octopus" card; a shopkeeper explained that the Visa card has to route through New York, while the Octopus card routes through Shanghai, insulating users from U.S. sanctions entirely. He says the overuse of sanctions has let disfavored countries "finally work out a way" to evade them, weakening U.S. leverage in the process.

BRICS and the payment card

In an earlier telling Kiriakou names the card differently, a Panda card rather than an Octopus card, and dates the visit to a week-long conference in China the previous year. The discrepancy in the card's name is unresolved between his two accounts; the mechanism he describes is the same in both. The shopkeeper's explanation, as Kiriakou relays it, turned on the technicality that because Visa and Mastercard are American companies every transaction routes through New York, and "even if the transaction only hits New York for a tenth of a second it's still considered to be a U.S. transaction", so a sanctioned party cannot make it. The domestic card clears through Shanghai instead: "if the Americans put sanctions on us, we don't care. We don't need Visa and Mastercard, we have Panda card."

A third telling narrows the location and repeats the card's name. Here the trip is to Hong Kong, "last spring, on a business trip," and what surprised him was how many places did not take Visa or Mastercard; a Chinese contact explained that they use Panda Card, "just the same as Visa or Mastercard, but the transaction's not routed through New York." The consequence he draws is the same one, stated as a completed fact rather than a risk: "in the event that the United States puts sanctions on China, now the Chinese don't care. They don't use Visa and Mastercard. They don't use the American banking system", and, he adds, the Russians have since adopted the same arrangement.

He also stresses how narrow the sanctioning coalition is: the measures against Russia are "practically unilateral, I mean, it's just us and the European Union," and with China and India ignoring them, and a long-negotiated Russian,Iranian agreement newly signed, "the Russians can live perfectly well without the United States and the European Union." If Europe will not buy Russian gas, "the Chinese and the Indians are very happy to buy Russian gas."

Kiriakou puts the causation plainly: "American sanctions are what led to the creation of BRICS." He lists the bloc as Brazil, Russia, India, China and South Africa with later additions including Iran, and warns that the members are now discussing a unified currency on the model of the euro, in which case, he argues, American sanctions become worthless. He cites as a first crack the occasion, the year before the interview, when China bought a shipment of oil from Kuwait and paid in yuan rather than dollars; the United States raised "all kinds of hell" with the Kuwaitis, whose answer was that China is a major global power and that was how it wanted to pay. Asked directly whether this is a real threat to the dollar, his answer was yes.

He traces his own scepticism to his CIA years, recalling a Treasury Department announcement of new sanctions on Iran and his remark to a colleague at the time: "how many more sanctions could there possibly be?", the country having by then been sanctioned in every facet of its economy. His diagnosis of the wider pattern is not malice but escalation: "it's the eye for an eye, people get carried away with it, and you're going to make the problem worse."

Where sanctions work

Kiriakou's view is that sanctions should be reserved for the worst actors and imposed in concert with other countries, pointing to sanctions on apartheid South Africa as the model example of sanctions actually helping to bring down a government. By contrast, he argues sanctions on Cuba and Venezuela have the opposite effect: they strengthen nationalism and let a country's leader blame the U.S. rather than face domestic blame, creating an "us against him" narrative that shores up the targeted government instead of weakening it.

The Russian test case

Asked in June 2025 why three and a half years of sanctions had left Russia's economy stronger, Kiriakou treated the war as settling the question. "If there has ever been a lesson for the United States on sanctions, it has been this conflict. The Russians have not been harmed by sanctions. Not in any way."

The reason he gives is market coverage rather than enforcement. There are "gigantic Russian markets available in China, in India, all over the rest of the world," and the Russians "have had no problem at all selling their oil and their natural gas and anything else they want to sell. Most of the world does not have sanctions on Russia. So we can sanction Russia from now until kingdom come. It's not going to harm them in any way."

He applies the same reading to Iran: "the Iranians lack for nothing. Nothing. They don't need us. They don't need Wall Street. They don't need American investment. They have Russian and Chinese investment and others."

Who is actually hurt

The general finding follows: "this ought to be a lesson to the United States that sanctions don't work. If anything, they harm only the poorest and most vulnerable in the target country."

The alternative, and the joke behind it

His proposed alternative is unglamorous, "we need to do something else. Oh, I have an idea. Like maybe negotiations", and he attaches an in-house joke to explain why it is rarely tried. "We used to joke when I was in the CIA about the George W. Bush administration, and how we had never seen anybody work so hard to not talk to our enemies. The situation was the same under Joe Biden."

"So maybe if we talk to them, and let the diplomats do what they're being paid to do, we might accomplish something that sanctions have been unable to accomplish."

Stated as principle, 2021

Kiriakou has argued the point as a general proposition, not only from the Russian case. Prompted by a Sunday talk-show guest who praised sanctions as a valuable soft-power tool preferable to war, his answer was categorical: "I disagree strongly with that position. I think sanctions do nothing but hurt average citizens, that sanctions invariably hit food supplies, medicine, clean water, everything that people need to just survive on a day-to-day basis."

His reading of the intent is harsher than the usual complaint about effectiveness: "they're meant to destroy societies." He cites Cuba, under sanctions "for almost 60 years now," and Iran, under sanctions "since 1979", a country he says "could be utterly self-sufficient if it weren't for sanctions. They can certainly grow their own food, they have vast oil reserves, but we don't allow them to do anything."

On sanctioning Russia, China and Iran at once, he called the policy "counterproductive and silly," and put the strategic risk as a question: whether the United States can become so dependent on the instrument that the sanctioned countries simply do business with each other and "we're left in the dust."

See also

- Monroe Doctrine
- Venezuela Boat Strikes
- John Kiriakou
