China hawk: Fix symbolic, ineffective US sanctions

The Biden administration should strengthen its sanctions and export controls against China, which at present aren’t strong enough to stop Chinese firms from shipping dual-use products to Russia and accessing American technologies, according to a Trump-era US trade official who was known as a “China hawk.”

US sanctions imposed on China can be easily circumvented because sanctioned entities can hide themselves by setting up layers of shell companies or only holding a minority stake in their companies, in the view of Nazak Nikakhtar.

Nikakhtar, who from 2018 to 2021 was assistant secretary for industry and analysis at the US Department of Commerce’s International Trade Administration (ITA), spoke with Asia Times in an interview.

She suggested that the US government use “sectoral sanctions” to punish those who helped support the Russian war machine in Ukraine.

“People can set up paper companies to circumvent US sanctions. But if we do sectoral sanctions with our SDN List [Specially Designated Nationals and Blocked Persons List], it will become a little bit difficult,” said Nikakhtar, who currently is a partner in the international trade practice at the American law firm Wiley Rein LLP and chair of the firm’s national security practice.

“Targeting financial institutions is a way that has a broader economic impact,” she said. “If all of a sudden a paper company is dealing with tens of millions of dollars of transactions overnight, that should send a red flag to the banks.”

She said the US government can identify suspicious companies with these red flags.

Sectoral sanctions

After Russia invaded the Crimean Peninsula in Ukraine in early 2014, the US Treasury Department’s Office of Foreign Assets Control (OFAC) in July of the