Enforcing economic sanctions by tarnishing corporate reputations

Abstract What strategies work best for enforcing sanctions? Sanctions enforcement agencies like the US Office of Foreign Assets Control (OFAC) face resource limitations and political constraints in punishing domestic firms violating sanctions. Beyond monetary fines, sanctions actions also serve a “naming shaming” function that tarnishes violators’ reputations. Larger, higher-profile companies tend have much more at stake terms their reputations than smaller or less well-known firms. At same time, violations is likely to generate publicity about risks potential consequences not complying with We theorize OFAC should impose larger fines on high-profile draw attention those cases, make memorable, enhance reputational costs they inflict. conduct statistical analysis from 2010 2021 find support our theory.