9.1 Introduction

Jurists and legal historians have increasingly come to the realization that the story of their discipline is not, in fact, that of the gradual diffusion of Western concepts to the rest of the world. The emergence of new norms of global governance and the history of international law more generally are made up of multiple stories that have no single point of departure.Footnote ¹ The history of legal concepts, imaginaries and fields of practice is full of examples of such ‘legal entanglements’ between various systems of law, located at different scales, and generated according to different temporalities and historicities.Footnote ² The new historiography on colonialism and empires, for instance, has insisted on the two-way transport of legal concepts and practices and the plurality of legal orders that were constituted over time during the Spanish, British, French and even German empires.Footnote ³ In many cases, scholars of colonial law have demonstrated that the colonizers’ rule was far from being the sole source of authority and legitimacy in disputes between colonizers and colonial subjects.Footnote ⁴ The resulting ‘legal entanglements’ may have looked contradictory in principle but were effective in practice.Footnote ⁵

Similarly, political scientists have looked at the co-constitution of normative and/or rules-based regimes, which has grown increasingly more complex through practices of interlinkages. Experts often push the boundaries of technical fields of governance by claiming jurisdiction over the regulation of innovations in adjacent fields. Such practices promote an ever tighter entanglement between expert knowledge and policy domains, leading to either conflict, cooperation or free-riding by transnational policy networks, private companies and states.Footnote ⁶ Political sociologists and socio-legal scholars have also recently paid attention to the circulation of various kinds of capital (economic, cultural, political or even colonial) and their transmission across entangled national and international regulatory fields. These scholars conclude that the distribution of such forms of capital does not follow a purely national logic, such that we need a transnational perspective on the workings of the state in the age of globalization.Footnote ⁷

Although these various disciplines differ in methods and findings, we find, across fields, a number of scholars who seek to explain the evolution of complex forms of transnational legal rules as ‘legal entanglements’. These scholars converge on some epistemic principles. They hold that history originates from many parts of the world; that asymmetries of power are inscribed in norms but that it is mostly in practice where power actually manifests itself – most often, through practices of knowing, classifying and reifying certain visions of the world.Footnote ⁸ They also tend to agree that although some hidden path dependency may well explain the overall direction of history, the continued existence of normative contradictions within any given ‘regime complex’Footnote ⁹ leaves room for contingencies and even sudden reversals. Importantly, scholars who use the notion of ‘legal entanglement’ accept that normative contradictions do not necessarily threaten the working and stability of a transnational legal order.Footnote ¹⁰ This position departs from the traditional rationalistic view that a normative system can only be stable if it is based on clear, self-reinforcing and non-contradictory principles, such that one can derive from it rules of conduct and agreed-upon punishments in case of violations. The notion of ‘legal entanglement’ therefore introduces a ‘postmodern’ perspectiveFootnote ¹¹ to modernity’s rationalist project of building universal rules beyond the nation state based on clear and quasi-constitutional foundations.

In this chapter, we adopt a similar perspective on ‘legal entanglements’ to explain contemporary dynamics in transnational legal orderings in the field of security. In particular, we want to explain the normative order by which states adopt international sanctions against individuals and/or states which have threatened international security and/or violated agreed-upon rules. We start from the assumption that sanctions are better thought of as bodies of norms and practices, also known as ‘sanctions regimes’.Footnote ¹² These sanctions regimes have long been elaborated at the intersection of various bodies of law, both at the domestic and international levels, which define principles related to the responsibility of states and/or norms ensuring the protection of human rights. For instance, the notion that innocent civilians should not suffer from the application of sanctions was translated in the United Nations Security Council (UNSC) sanctions regimes that were once ‘comprehensive’ and showed little respect to the human rights of populations in sanctioned areas, and that have become more targeted – or, in other words, ‘smarter’.Footnote ¹³ This ‘miniaturization’ of UN sanctions began with various sanctions against conflict actors in Africa in the late 1990s and early 2000s, and it was further developed with the well-known sanctions regimes against Iran and North Korea, at least in their earlier stages in the 2000s. These processes occurred according to different temporalities and scales depending on where they were located.

This chapter argues that, on the one hand, the developments that have affected the sanctions regime have strengthened the normative coherence of the UN system of norms and rules, giving it more legitimacy and unity. The new UNSC sanctions regime was indeed greeted as a reconciliation of the UNSC’s main responsibility to safeguard international peace and security with better respect for other pillars of international law and the UN, namely human rights, which include the right to access vital goods such as food or medical care.Footnote ¹⁴ On the other hand, it remains to be seen whether new contradictions have not also spurred from some of the latest developments in the broader ‘sanctions regime’, which not only includes the UNSC sanctions but also multiple domestic sanctions regimes, in particular in the United States and Europe. In contrast to the story of a clear paradigmatic shift characterized by the emergence of a new ‘targeted sanctions’ paradigm, relegating to the dustbin of history all previous forms of comprehensive sanctions that clashed with other UN norms, we explain how, particularly in counter-proliferation sanctions, contradictions persisted in the legal entanglements between targeted and comprehensive logics and in overlapping multilateral and domestic legal sources of sanctions. We further explain why the presence of such contradictions in counter-proliferation regimes has gone largely unnoticed by ‘targeted sanctions’ designers and advocates who do not use the notion of ‘legal entanglement’.Footnote ¹⁵

In this chapter, we will thus show the heuristic power of the notion of ‘legal entanglement’ when applied to the evolution of global sanctions regimes in the last thirty years. To demonstrate how targeted sanctions regimes in the field of counter-proliferation are best analysed as ‘legal entanglements’ between targeted and comprehensive logics, as well as between multilateral and unilateral regimes, the chapter proceeds in three parts. In Section 9.2, we show how a discourse on the ‘targetedness’ of sanctions was promoted by sanctions entrepreneurs, policy experts and international governmental and non-governmental organizations in the context of the ‘War on Terror’ during which sanctions increasingly targeted specific individuals listed by states for their association with non-state networks of terrorists, namely Al Qaeda, the Taliban and later ISIS. In Section 9.3, we show how the multilateral machinery that was created in the context of counter-terrorism initiatives, especially under the aegis of the UNSC, extended its reach to the field of counter-proliferation, when specific sanctions committees modelled after the Al Qaeda Sanctions Committee were created in the UNSC to monitor UN member states’ compliance with new UNSC Resolutions (UNSCRs) that targeted the Democratic People’s Republic of Korea (DPRK) and Iran’s sanctioned nuclear activities. In Section 9.4, we show how, during the early 2010s, the targeted sanctions that the UNSC imposed on the DPRK and Iran were ‘comprehensivized’. This process of comprehensivization, we show, followed different pathways: the comprehensivization of UNSC sanctions occurred either directly at the level of the UNSC (as in the case of the DPRK), or indirectly (as in the case of Iran), because of the entanglement between UNSC sanctions with the comprehensive logic of domestic sanctions adopted in a unilateral fashion by the United States and the European Union. This was the case regardless of claims by the USA, and especially by the EU, that their ‘multilateral restrictive measures’ (as sanctions are called in EU parlance) did not amount to comprehensive measures.

Our analysis shows that the legal entanglements between targeted and comprehensive logics that traverse the global sanctions regimes rest on a few core mechanisms. These mechanisms include the assertion of judicial authority by US regulators over the world’s financial transactions denominated in US dollars; the use of instruments that designated central actors within designated jurisdictions (in particular, the central banks of sanctioned states); and the ambiguity of the concept of ‘risk’ held by global financial actors, which allowed financial institutions to adopt a ‘zero-risk’ approach when it came to the implementation of financial sanctions.Footnote ¹⁶ The ambiguity of this concept of risk, which circulated through a network of cross-references across regulatory documents,Footnote ¹⁷ led financial institutions to massively cut their operations in the targeted economy while remaining, on the face of it, within the bounds of the targeted logic of ‘risk-based approaches’. We conclude by highlighting key normative reflections that derive from the realization that such entanglements between targeted and comprehensive logics are central to the operation of counter-proliferation sanctions.

9.2 The Creation of the UNSC Counter-Terrorist Sanctions Regime and Its Extension to the Field of Counter-Proliferation: A Case of Isomorphism?

The application of sanctions is not new, as states have long agreed upon historically specific appropriate responses against threats to peace and security as well as violations of international norms and rules.Footnote ¹⁸ However, the move towards targetedness appears to be a more recent phenomenon, spurred by the UNSC’s efforts to respond to recent crises, taking advantage of equally recent phenomena, such as the new information technologies that facilitate the identification of individual targets,Footnote ¹⁹ the acceptability of designating non-state actors as subjects of international law and the desire of the international community to protect innocent civilians during responses against state and non-state perpetrators.

The global push towards more coherence in the UN system of norms that affected the design and monitoring of sanctions at the UNSC came with the realization that, after the Cold War, comprehensive sanctions proved too devastating in a less divided world. From 1945 until 1989, the world was divided into trading blocs; thus, a country that was excluded by one bloc could still trade with the other bloc. Therefore, ‘sanctions’ in the sense of trading restrictions applied by the West for instance may have been comprehensive in design, but never fully sealed off a country. Furthermore, the UNSC sanctions that were adopted in 1966 against Rhodesia, and in 1977 against South Africa, were limited to arms embargoes. This changed with the end of the Cold War. In 1990, the UNSC unanimously imposed comprehensive sanctions on Iraq after Saddam Hussein’s invasion of Kuwait. While these sanctions were modelled on the initiative of the West, in particular the USA, they were backed by universal condemnation of the Iraqi act of aggression. These sanctions initially consisted of an embargo against all Iraqi imports and exports and were to be applied by all UN member states. Their effects were drastic and counterproductive: even though exemptions on food and medical supplies were gradually introduced, the impact on the civilian population was devastating, while hardly hurting – or, by some accounts, even strengthening – Saddam Hussein’s regime.Footnote ²⁰ This paradigmatic case of comprehensive sanctions convinced the international community to move towards a targeted design of sanctions to avoid hurting civilians in sanctioned territories.Footnote ²¹

In the following years (i.e. the late 1990s and early 2000s), a ‘transnational policy network’ of diplomats, national politicians and academics promoted these targeted sanctions, consisting of tools such as assets freezes, travel bans, sectoral economic restrictions and arms embargoes.Footnote ²² These targeted sanctions became the only type of sanctions imposed by the UNSC since, with early applications responding to internal armed conflicts in Angola, Sierra Leone, and Liberia in the late 1990s and early 2000s.Footnote ²³ Since then, as a sign of the normative appeal of targeted sanctions, human rights organizations – staunch critics of the comprehensive sanctions against Iraq – have repeatedly called for the imposition of targeted sanctions in the context of various civil wars.Footnote ²⁴ Consequently, academic literature on sanctions has usually spoken of a clear break between the comprehensive Iraq sanctions and the post-Iraq era of ‘targeted sanctions’,Footnote ²⁵ whose coherence with the broader system of UN norms is emphasized by many.Footnote ²⁶

In the late 1990s and early 2000s, a series of large-scale terrorist attacks – most prominently 9/11 – pushed states to confront transnational non-state groups as significant threats to their security. The ensuing War on Terror involved UN targeted sanctions that were similar in their formal setup to the peacebuilding sanctions put in place in response to African civil wars, but came with longer lists of targeted individuals and entities. As a further difference, while early peacebuilding sanctions included sectoral trade embargoes (such as diamonds), the targets of counter-terrorism sanctions were too amorphous for such measures. Instead, these sanctions regimes relied chiefly on financial measures and travel bans. During the 2000s, under the stimulus of the UNSC, the financial sector thus became heavily mobilized in the quest for more efficiency and more targetedness in the fight against individual terrorists linked to Al Qaeda.Footnote ²⁷ The range of measures imposed on those individuals who were added to the list of identified terrorists were (and continue to be) forceful, including asset freezes and the systematic screening of all cross-border transactions. Immediately after 9/11, the United States – and then the UNSC – asked the financial sector to help them with implementing this targeted logic with measures to counter the financing of terrorism (CFT). This request inspired new conceptions, practices and technologies.Footnote ²⁸ For instance, before 9/11, banks conceived of financial fraud as a problem of organized crime and corruption and used almost no digital technology to detect such fraud among their clients; after 9/11, however, financial watchdogs and software companies offered their techniques as weapons in the War on Terror, enabling identification and blocking of specific transactions, as well as automatic freezing of the money held in suspicious accounts.Footnote ²⁹ It was, therefore, as part of the War on Terror that targeted financial measures were devised and implemented on a large scale.Footnote ³⁰

Thus, after targeted sanctions were initially designed as a response to the costly impact of comprehensive sanctions against Iraq (as explained earlier in this section), the War on Terror played an important role in further developing and promoting this tool. Throughout the years, the UNSC made a consistent effort to keep the sanctions directed at the right targets and not to harm innocent civilians by constantly improving the technical characteristics of its mode of designation. For instance, the UNSC sought to specify the identities of targeted terrorists with enough detail to prevent banks from unintentionally applying the penalties against ‘false positives’ (i.e. entities or individuals who are mistakenly identified as sanctioned actors because their names coincide with names on the sanctions list). After international pressure and legal conflicts in European countries, the UNSC also created the office of the ‘Ombudsperson’ which gives listed individuals the possibility to appeal for delisting by demonstrating that they no longer meet the listing criteria.Footnote ³¹ The ‘politics of lists’Footnote ³² and financial surveillance thus became intrinsic parts of the logic of targetedness that was developed in the new War on Terror, first within the Bush administration and later by the international community at the UNSC level.

New actors entered the domain of CFT, as counter-terrorism sanctions incited new cooperation (or intensified existing cooperation) between member states’ bureaucracies (notably intelligence agencies and treasury departments), private companies (especially airline companies and global banks) and international organizations.Footnote ³³ Prominent among the last of these was the Financial Action Task Force (FATF): an international organization of like-minded states that was established at a G7 summit in 1989 with the mandate to ‘examine and develop measures to combat money laundering’.Footnote ³⁴ In October 2001 – in the aftermath of 9/11 – the FATF mandate was then extended from anti-money laundering (AML) to CFT, leading to FATF’s entry into the field of international security; as we show in Section 9.3, the mandate was later expanded to include counter-proliferation finance (CPF). It wasn’t so much the FATF staff which lobbied to be entrusted with these security-related tasks, as at that time it possessed little expertise and credentials in international security. However, according to policy insiders we interviewed, the member states deemed it preferable to entrust a small organization, largely dependent upon member state intel, with the tasks of improving CFT strategies and helping the UNSC enrol the banking sector in its fight against terrorists.

The FATF worked hard to empower member states with ‘better’ legislation through the diffusion of best practices or model law in AML, CFT or CPF fields, as well as to provide private financial institutions with knowledge about typical money-laundering and terrorism-financing schemes.Footnote ³⁵ As such, the UNSC and the FATF have cooperated in the elaboration of a logic of targetedness in the design of counter-terrorism sanctions. In parallel, in the UNSCRs against Iran (for instance, in UNSCR 1803),Footnote ³⁶ the UNSC started to make explicit references to and praise the work of the FATF, and called on all governments to push legislation addressing financial sector reform that would enable banks and other private financial operators to fully cooperate with the creation of the new system of targeted sanctions. All international organizations with a stake in the global sanctions regimes have thus seemed to converge towards the same goals, well in line with broader UN norms.

When applied against ‘pariah’ states designated by the Bush administration in 2003 – in this case, Iran and the DPRK – the same logic of targetedness that shaped the design of counter-terrorism sanctions meant that new counter-proliferation sanctions would also avoid hurting the civilian populations who were not responsible for the undeclared nuclear programmes.Footnote ³⁷ After Iran’s file was sent from the International Atomic Energy Agency (IAEA) Board of Governors to the UNSC in 2006, as well as after the UNSC passed sanctions against the DPRK in the wake of its first nuclear test in 2006, the UNSC adopted successive rounds of sanctions against both countries that were targeted rather than comprehensive in scope, and discriminatory rather than non-discriminatory in nature.Footnote ³⁸ Their targeted nature was exemplified by the specific designation of companies and individuals allegedly associated with Iran’s or the DPRK’s nuclear programmes. These entities were systematically listed in the appendices of each of the UNSCRs targeting the two countries – just like the UNSC Al Qaeda sanctions listed scores of names associated with the terrorist network.

In the case of Iran, for instance, UNSCR 1737, passed in December 2006, banned the supply of specific goods (e.g. nuclear-related material) to Iran and froze the assets of specific individuals and companies associated with Iran’s hidden centrifuge programme.Footnote ³⁹ Similarly, UNSCR 1929, passed in June 2010, only called upon states to exercise vigilance over the transactions of the assets of entities associated with the procurement of illicit goods, such as members of the Iranian Revolutionary Guard Corps listed in its Annex II.Footnote ⁴⁰ The same logic of targetedness characterized UN sanctions against the DPRK, at least until the end of the Obama presidency, whose focus was on negotiations with Iran rather than the DPRK. Therefore, the UN counter-proliferation sanctions were indeed initially devised as targeted sanctions.

The institutionalization of the logic of targetedness in the domain of counter-proliferation was facilitated by the UNSC’s cooperation with other international organizations and by intertextuality and cross-referencing across various actors. As with the counter-terrorism sanctions, the UNSC worked in tandem with other organizations, again notably with the FATF.Footnote ⁴¹

The UNSC passed UNSCR 1803 in 2008, which commended the guidelines issued by the FATF that same year with regard to the detection of suspicious activities in proliferation finance.Footnote ⁴² UNSCR 1803 ‘called upon’ all states to exercise ‘vigilance’ regarding activities of financial institutions in their territory with banks domiciled in Iran ‘in order to avoid such financial support contributing to the proliferation sensitive nuclear activities’ (para. 10), and to report to the UNSC’s Sanctions Committee on Iran the steps undertaken to this end.

The UNSC and the FATF thus incentivized states and banks to work towards a decentralized and autonomously targeting financial system, in which private and public financial institutions are individually responsible for establishing mechanisms to ensure compliance with sanctions regimes. In principle, these institutions remained committed to the same logic of targetedness: both FATF documents and UNSCRs promoted specific measures (like ‘enhanced due diligence’ protocols) that global banks could adopt in order to conduct proper calculations of the risk of certain activities of their clients being related to Iran’s sanctioned nuclear activities. Banks should only prevent those activities if the risk was substantial. As described in interviews we conducted with US sanctions specialists, such intertextuality and cross-referencing were strengthened due to the fact that the same experts (largely Western experts, in particular those working on sanctions in the US State and Treasury Departments) contributed to the activities of both institutions (the UNSC and FATF).

Still, some other trends in the sanctions against Iran and the DPRK force us to rethink the narrative of a clear break with the comprehensive logic of sanctions. Considering the increasing difficulties that countries under sanctions (like Iran or DPRK) meet when they have to respond to the humanitarian needs of their populations,Footnote ⁴³ does that mean that the paradigmatic shift towards targeted sanctions has been reverted? Or has that paradigmatic shift in fact never fully happened, as a comprehensive logic (or a process of comprehensivization) continued to be produced as a result of the entanglement between various sanctions regimes, some at the unilateral level, others at the multilateral level? As UNSC sanctions haven’t operated in a vacuum since the turn to ‘targeted sanctions’, and as they have consistently been complemented by domestic sanctions unilaterally adopted by UNSC permanent member states (especially the P3 – the USA, the UK and France), has the UNSC relinquished its duty of ensuring the coherence of its actions vis-à-vis the broader UN normative system? These questions are especially urgent to ask since the legality and normative coherence of unilateral sanctions adopted by the P3 with other UN principles, such as the protection of human rights, has increasingly been the object of criticism, even from within the UN system, as illustrated for instance by the many reports published by the office of the UN Special Rapporteur on the Negative Impact of Unilateral Coercive Measures on the Enjoyment of Human Rights.Footnote ⁴⁴

9.3 The Internal Dynamics Driving the Gradual Comprehensivization of Sanctions: The Role of Panels of Experts

Some analysts may argue that counter-terrorism sanctions, and most notably the financial measures they entailed, buttressed the normative standard of hitting those responsible while avoiding costs for innocent civilians.Footnote ⁴⁵ However, we argue that those sanctions also entailed a redirection of intervention practices, new types of expertise, technologies and cooperative engagements that amounted to a loss of control in how UNSC sanctions were to be implemented by the private parties (global banks especially) in charge of blocking financial transactions on the basis of suspicion rather than a demonstrated relation to the nuclear programmes of Iran or North Korea. In this section, we want to show how the logic of targetedness that the UNSC and FATF inscribed in the regulation of counter-proliferation finance was gradually entangled with a logic of comprehensiveness.

The UNSC’s innovative approach to targeted sanctions went well beyond the publicization of lists of names of suspected terrorists and nuclear proliferators, and the description of their financial practices, found in the documents voted upon by fifteen UNSC and thirty-seven FATF member states. The powerful states behind the edification of the new sanctions regimes called for implementation by all states and for cooperation by private actors around the world (such as global banks and airline companies), asking them to deeply reform their compliance systems in order to catch suspicious transactions. It is thus important to understand UN sanctions and FATF recommendations not simply as an attempt by the UNSC or FATF to reign in one specific actor (Al Qaeda and its individual affiliates, or the individual companies and persons related to the nuclear programmes of Iran and the DPRK), but as an attempt to govern states – all of them – and to convince them to reform their banking sectors so as to ensure that they can detect suspicious transactions and freeze the assets of terrorists and suspected nuclear proliferators in seconds, without hurting the rest of their population.

Here is, thus, a particular mélange of international and transnational logics inherent to targeted sanctions, as they target non-state actors through addressing state jurisdictions. States were furthermore not just asked to inhibit certain flows of finances, goods and people, but to change their domestic financial regulations more broadly. This focus on broader financial regulations was likely promoted by the FATF, as the FATF is less concerned with individual security threats such as those emanating from Al Qaeda, Iran or the DPRK, and more with systematic patterns and risks of abusing the financial system. These more systematic concerns were increasingly integrated into UNSC resolutions, asking all UN member states to change their domestic jurisdictions.

These demands contain the seed of a ‘comprehensivization’ of supposedly targeted sanctions, as banks worldwide were pushed by the UNSC and FATF (through the pressure these two international organizations placed on governments) to become part of a larger governance infrastructure, whose algorithms automatically hooked the compliance departments of global banks to the listing decisions of the UNSC and other entities. Even though the UNSC itself remained rather conservative with regards to listing individuals (its list of targeted terrorists containing about 350 individuals/entities), its regulations contributed to a dynamic of ever-growing lists and their almost automatic adoption by global banks: the targeting is supposed to become decentralized and automatized at a systematic level, a far cry from the few handpicked, high-profile targets of the early peacebuilding sanctions whose evolution remained heavily centralized in the hands of the UNSC.

The banking reforms adopted by the UNSC and FATF have led to the creation of a system of private ‘algorithmic governance’Footnote ⁴⁶ which led to eternally growing lists that were supposed to capture a fluid enemy. Given the fluidity of this non-state enemy, the asset-freezing measures could never be called ‘comprehensive’: soon, private companies such as World-Check proactively identified targets on their own and sold these listings to global banks.Footnote ⁴⁷ As many compliance officers working in the banking sector told us in the context of a large-scale interviewing campaign conducted between 2017 and 2019, once individuals are on a list sold by compliance software companies to banks, they will remain black-listed by some banks for the rest of their lives, even if their name is later removed from listings due to the decision of a court or the UNSC ombudsperson. The exclusion of individuals has also become maximalist because private companies have tended to pile up names from not only UNSC listings, but also all the domestic lists that states from all over the world publicize, rarely having the means of checking in which jurisdictions any given individual is listed and therefore just applying all lists globally.

The demands for domestic regulatory change that the UNSC made on behalf of international security concerns have had other important implications. Existing literature has analysed it as an indication of the UNSC becoming a ‘global legislator’.Footnote ⁴⁸ Here, however, we want to point out a different implication, namely the creation of new institutions and monitoring mechanisms that would contribute to a network of cross-referencing reports and regulatory guidelines. As the UNSC set up new sanctions regimes, it instituted new Sanctions Committees, to which it appended specific Panels of Experts (PoEs), which participated in the expansion of lists of designated individuals and which changed the relationship between political negotiation and the rule by experts. PoEs are mandated to ‘gather, examine and analyze information from States, relevant United Nations bodies and other interested parties regarding the implementation of the measures imposed in [the respective resolutions]’ and to ‘make recommendations on actions the Council, or the Committee or Member States, may consider to improve implementation of the measures’ in their annual or biannual reports.Footnote ⁴⁹ PoEs are supposed to have the necessary independence from UN member states to scrutinize the national implementation of specific UNSCRs, like those targeting Al Qaeda, Iran or the DPRK.

It is necessary to point out that the setup of these PoEs has been very political, as the nationalities of their members mirror the five permanent members of the UNSC plus the composition of member states involved in the broader negotiation with, respectively, Iran and the DPRK.Footnote ⁵⁰ This political dimension of their work goes largely unacknowledged, even though some observers of the UN sanctions machinery acknowledge in interviews a divide between PoE members who adopt a maximalist interpretation of the UNSCRs, which come closer to the views of the P3, and others who take a minimalist interpretation closer to the souverainism of Russia and China. It should be noted that, despite their formal independence, many PoE members hold a background in national ministries or agencies and sometime maintain close contacts with their country representatives in New York or even with their capital throughout the mandate, and interpret sanctions violations in accordance with their capital’s view.Footnote ⁵¹ As for PoE members from P3 countries, this also entails closer direct or indirect ties to other multilateral institutions which hold similar views, like the FATF, or with like-minded think tanks specialized in the monitoring of the global arms trade or illicit finance, like the Stockholm International Peace Research Institute or the International Crisis Group. In their daily practice as PoE members, they are entitled to escape the logic of pure diplomatic negotiation by checking information that they obtain through personal networks and then pushing for factual consensus on such sensitive issues as sanctions implementation, enforcement, and redress.Footnote ⁵²

In the field of CPF, PoEs and the FATF have reinforced each other, mutually ‘enhanc[ing] their own position by linking up with bodies of norms produced by other, reputed institutions’.Footnote ⁵³ In so doing, they elaborated and universally promoted a set of financial rules that originated in Western states and was diffused by the P3 to the rest of the world. To begin with, PoE reports – which are submitted to the UNSC and made public – regularly refer to FATF reports: for example, the section on financial sanctions in the first report of the DPRK PoE mostly just reprinted the heuristics on money laundering from a 2008 FATF report. Already in its first report on the DPRK sanctions, the PoE recommended that ‘[a]ll Member States should be encouraged to adopt and implement the non-proliferation and anti-money-laundering/combating the financing of terrorism guidelines published by FATF’ (DPRK S/2010/571, recommendation 15).Footnote ⁵⁴ We should assume that the term ‘member states’ refers to UN member states here (as it usually does in PoE reports), not to FATF member states, meaning that the PoE recommended that states adopt FATF guidelines even if they are not a member of the organization.

Another illustrative example concerns measures against front companies, which have frequently been used to circumvent sanctions: front companies have been repeatedly problematized in FATF reports,Footnote ⁵⁵ but remained largely ignored by UNSCRs, with the minor exception of a few designations of front companies in UNSCR 1803 on Iran.Footnote ⁵⁶ However, after the DPRK PoE recommended more systematic measures be forcefully undertaken against front companies (S/2015/131, recommendation B7),Footnote ⁵⁷ the issue was addressed more systematically in UNSCRs (from UNSCR 2270/2016).Footnote ⁵⁸ This process of cross-citation shows how UNSC permanent member states, like the United States, the United Kingdom or France, who place a lot of attention on the work of the FATF, can leverage the work of PoEs to raise the relevance of certain issues related to sanctions implementation, CFT or CPF in the global international security agenda; and how they can use the UNSC and its complex institutional architecture to commend FATF recommendations at multiple levels.

PoEs have played another important role by increasing the frequency of the monitoring and evaluation of national financial sanctions adopted by the UNSC. PoEs have sometimes gone beyond the FATF, which has a relatively thorough monitoring mandate involving eighteen-months of mutual evaluations, but at distant intervals – every five years or so. In contrast, PoEs conduct all-year-long, more or less independent investigations of any UNSC sanctions breaches reported by states, and issue up to two reports per year. Through their monitoring activities, the FATF and the PoEs participate in strengthening the expert belief that new ‘targeted’ sanctions always need to be added to past rounds of sanctions, according to a logic of a continuous progress in the detection of new types of practices and actors associated with illicit finance and sanctions violations. Whereas new measures are usually only added to an existing sanctions regime in response to actions that threatened international security and/or constitute a serious breach of the existing sanctions regime, PoE reports are routinely suggesting new targets to existing sanctions, based on the discovery of new methods or actors of sanctions evasion. With the precise enumeration of verified violation cases by PoEs, and the submission of their documentation to the scrutiny of the UNSC and its Sanctions Committees, the PoEs diffuse the view that new sanctions designations shall always improve the system of ‘targetedness’ and perfect the sanctions regimes already in place. Typical demands in PoE reports on the DPRK, for instance, are to close down new shell companies and new circuits of exchange (from cash economies to hawalas or networks exchanging digital currencies), which are created by proliferators in response to past rounds of targeted sanctions. PoEs not only seek to verify the validity of leaked intelligence and public information on new sanctions evasion techniques, but also lobby the UNSC member states to pass new rounds of sanctions meant to close the observed loopholes. Whether such an accumulation of targets leads to the progressive comprehensivization of sanctions or whether they can remain targeted in scope and discriminatory in nature is the question that we assess in Section 9.4.

Some examples illustrate how PoEs have encouraged states to go beyond the explicit requirements of UNSCRs and leave the ethos of diplomatic prudence in favour of a more expert-based justification for independent monitoring and forceful implementation of all of the UNSCRs’ obligations and recommendations by UN member states. For instance, the UNSC decided in 2013 that member states shall prevent transfer of bulk cash through/to/from their territories if it ‘could contribute to the DPRK’s nuclear or ballistic missile programmes, or other activities prohibited by resolutions’ (2094/2013 para. 11, emphasis added; UNSCR 2270 subjected gold transports to the same measures).Footnote ⁵⁹ The term ‘could’ is ambiguous and may invite very broad interpretations, but, if interpreted along a logic of targetedness, the measures should refer to cases with a credible risk that the gold/cash is being used for prohibited purposes. However, the wording suggests a broader interpretation, recommending that smuggled bulk cash or gold by DPRK nationals should be frozen and that member states ‘ensure that [frozen gold/cash amounts] cannot be used for prohibited activities or evasion of sanctions before releasing them’ (S/2017/150, para. 253).Footnote ⁶⁰ Ensuring that assets cannot be used for prohibited tasks is a higher threshold pertaining to an eventual future that goes beyond the threshold of a credible risk that was more likely implied by the UNSCR.

To add another example, in UNSCR 2321,Footnote ⁶¹ the UNSC decided that ‘all States shall take steps to limit the number of bank accounts to one per DPRK diplomatic mission and consular post, and one per accredited DPRK diplomat and consular officer, at banks in their territory’. The PoE repeatedly asked member states to go beyond these measures; in the following year, it passed the recommendation that member states ‘must ensure that additional accounts are not established in the names of family members’ (S/2017/742 recommendation C 5).Footnote ⁶² Yet another year later, the PoE also recommended that member states apply the restrictions to all embassy personnel,Footnote ⁶³ as opposed to only the ‘accredited DPRK diplomat and consular officers’ mentioned in the UNSCR.Footnote ⁶⁴ A year later, the PoE recommended that states provide banks with a list of names of all family members of DPRK diplomats, to ensure that diplomats cannot open bank accounts in their namesFootnote ⁶⁵ and that only one bank within each country be allowed to hold accounts of DPRK diplomats.Footnote ⁶⁶ Furthermore, the PoE recommended that ‘Member States advise their financial institutions not to open accounts for diplomats of the Democratic People’s Republic of Korea who are not accredited to their country’,Footnote ⁶⁷ based on the finding that North Korean embassies have served as traditional conduits of illicit financing. Still, if DPRK diplomats are prohibited, per UNSCRs, from holding more than one bank account, it lies in the discretion of the UNSC and its Sanctions Committee to designate any third-party individual assisting in the violation of this rule and there is, as of now, no UNSCR demanding that banks target family members of diplomats or that diplomats should not be allowed to choose a bank of their preference. The PoE thus recommends states to prevent sanctions evasions by recommending additional sanctioning measures that are not asked for by the UNSC. This is the very logic of illicit finance expertise that PoE members have endorsed.

A last example shows how private financial actors, too, can respond to the recommendations of the PoEs. In its 2017 report, the PoE on DPRK sanctions remarked that the Society for Worldwide Interbank Financial Telecommunication (SWIFT) maintained in its system North Korean banks that were designated for special attention by the UNSC.Footnote ⁶⁸ As SWIFT is (only) the messenger between banks exchanging value through its system, and to the extent that banks are supposed to conduct the risk analysis related to specific payments (depending on a range of criteria), SWIFT’s decision to keep these banks in its system may not have appeared a case of violation of the new UNSCR to its managers. Indeed, SWIFT provides the infrastructure that allows money to flow between accounts, and it leaves to those using that messaging infrastructure and ordering the money movements (e.g. banks sending messages through SWIFT) the responsibility to comply with the rules of UNSC, EU and US sanctions, and any other local systems of sanctions that may apply. This view of SWIFT’s neutrality, however, was strongly challenged in the run-up to the Iran nuclear deal, when the P3 repeatedly asked SWIFT to disconnect some Iranian banks from its system between 2012 and 2015, and yet again after the USA left the Joint Comprehensive Plan of Action (JCPOA) after 2018. After the publication of this 2017 DPRK PoE report, SWIFT cut off the last North Korean banks from its messaging networks, thus cutting the whole North Korean formal financial system from the global network.Footnote ⁶⁹ In so doing, the Belgian-based financial organization implemented what looks like comprehensive rather than targeted sanctions against North Korea’s financial system. It may have responded to the pressure due to the publication of the PoE report, or it may also have been retaliating due to the fact that the DPRK had manipulated its system by hacking the financial software that SWIFT sells to banks in order to initiate transfers of funds from one bank to another. In fact, in the last five years, it is estimated that the DPRK made more than US$1 billion in this way,Footnote ⁷⁰ a huge sum compared to the income that the DPRK regime generated over the same period from arms sale in certain African countries, like Namibia or Ethiopia.Footnote ⁷¹ These hacks may have convinced SWIFT that it needed the protection of the long arm of US judicial authorities to chase the hackers, bring them to justice and thus obtain a deterrent against other hacks in order to re-establish its credibility in the market of financial data management equipment.Footnote ⁷² Whatever the reason, the publication of the PoE report was likely factored into its calculation when SWIFT decided to cut off the whole financial system of the DPRK regime from its messaging system.

It is understandable that PoEs would come up with strict interpretations of sanctions implementation, given that they are supposed to conduct monitoring and see themselves confronted with numerous violations. What matters in our context, however, is that the PoE recommends to member states that they take a maximalist interpretation of measures in UNSCRs that is mutually reinforcing with FATF recommendations and the comprehensive sanctions favoured by the USA in its campaign for ‘maximum pressure’ against states like Iran and the DPRK. It is worth emphasizing that the PoEs also formulate recommendations to the UNSC Sanctions Committees, which the UNSC Committees then discuss and vote upon. And even if Sanctions Committees do not act upon these recommendations, today, public and private authorities use the biannual PoE reports as interpretation guidelines for UNSCRs. As a consequence, PoE reports have shaped the expectations of the financial industry and their willingness to take risks, as each exchange in goods or financial transaction carries a remaining risk of inadvertently violating sanctions, should one, for instance, fall victim to deception or incomplete information. Just like the FATF, PoEs have continuously stressed that both private and public actors must be made aware of the importance of adopting a ‘risk-based culture’.Footnote ⁷³ But this call for a ‘risk-based culture’ can be interpreted very differently: either that you should accept that every decision comes with the risk of making the wrong decision, and that risks are part of life; or that you should take no risk of making a mistake by authorizing suspicious payments, especially when the penalty for making the wrong decision is too high. Clearly, the latter became the dominant interpretation, and this extension of the domain of what can be considered a ‘risky activity’ plays a role in the comprehensivization of sanctions, so we argue.

9.4 The External Dynamics in the Comprehensivization of Sanctions: Legal Entanglements between Multilateral and Domestic Sanctions

If the institutional innovations of the 2000s may give the impression of a general, sudden and unbeatable adoption of the targeted sanctions paradigm, and a stark contrast to the comprehensive sanctions against Iraq, some other trends already highlighted point to the entanglements between targeted and comprehensive logics as well as multilateral and unilateral sanctions regimes. One reason for this is that targeted sanctions were embedded in a broader decentralized network of comprehensive domestic prohibitions on any type of trade with certain countries under UNSC sanctions, especially Iran. We have already identified various facilitating dynamics in the entanglement of targeted and comprehensive logics at the level of the UNSC, which were most prevalent in the case of the DPRK, where the ‘maximum pressure’ campaign has been steered by the UNSC itself.

However, in cases like Iran, the UNSCRs only served to give a legal basis for sanctions that were otherwise mostly adopted in a unilateral manner, supposedly to ‘complement’ ‘soft’ UNSCRs that only ‘called upon’ states to adopt certain financial restrictions. In this case, the decentralization of targeting practices at the level of the P3, and the ‘deputization’ of sanctions implementation to Western-led global banks in charge of enforcing financial sanctions, as well as the inherent tendency of lists to growFootnote ⁷⁴ under the proactive efforts of private sector vendors of sanctions lists, were much more influential processes explaining the comprehensivization of UNSC sanctions than efforts by PoEs and other international organizations like FATF. In what follows, we focus on a key driver of the entanglement between comprehensive (domestic) and targeted (UN-based multilateral) logics: a change in the notion of risk that was particularly fostered by US regulators.

While this section further works out the role of the USA as a key actor in fostering this entanglement, it also shows how ‘the scope of relevant actors goes well beyond the governmental [or intergovernmental] sphere’Footnote ⁷⁵ by pointing out the important role of private financial institutions. As the history of the last ten years of US judicial prosecution of financial crime shows,Footnote ⁷⁶ financial institutions have come to adopt a strategy of complete risk aversion with regards to sanctions under the influence of two important mechanisms: the adoption of comprehensive sanctions by the United States against Iran and the DPRK, and the extraterritorial effect of such unilateral sanctions on multinational companies – even outside the USA. These multinational companies were thus forced to choose between applying those sanctions to their global activities or facing the risk of exclusion from the US financial sector. Hence, when considering the risk of imposing comprehensive sanctions on civilian populations in Iran, global banks weighted another risk: that of being excluded from the leading world market and losing all of their US revenues. Furthermore, many of the UNSC sanctions against Iranian businesses involved prohibitions related to trade finance, and when they were framed by additional sanctions adopted by the USA and then by the EU (with the prohibition, after 2011, of oil import and export as well as of investment, insurance and credit related to the oil trade), it became easy for the US government to use the UNSCRs against Iran as a lever to police the activities of the world’s leading banks in general, and the field of trade finance in particular.

For two decades, domestic US legislative acts slowly built up a comprehensive net that was supposed to catch any activity involving Iranian oil and the import/export of other commodities, with pretensions of legal extraterritoriality. At the domestic level, beginning in 1994 the USA passed the Nuclear Proliferation Prevention Act and Executive Order (EO) 12938 instituting a ban on US procurement from any person who, on or after 30 June 1994, knowingly and materially contributes, through the export of nuclear-related goods or technology, to the efforts of any individual, group or non-nuclear weapon state to acquire a nuclear explosive device or unsafeguarded special nuclear material. Through EO 12938, President Clinton declared a ‘state of emergency’ with respect to the proliferation of weapons of mass destruction. Then, the Export-Import Bank Act of 1996 instituted a ban on access to credit to any person who, after 23 September 1996, knowingly aided or abetted a non-nuclear weapon state to acquire a nuclear explosive device or unsafeguarded material, like Iran’s enriched uranium not currently placed under IAEA safeguards. In the 2000s, a number of EOs complemented this legal basis, leading up to EO 13622, and EO 13645, which was adopted in 2013 and which prevented European and Japanese car companies present in Iran from continuing to sell cars and spare parts to the Iranian market. In parallel, the US Congress also passed a wide range of acts which banned trade with Iran and claimed extraterritorial competence: from the Helms–Burton Act to the 2011 Comprehensive Iran Sanctions, Accountability, and Divestment Act to the Iran Freedom and Counter-Proliferation Act and the Nuclear Iran Prevention Act of 2013 as well as various Defense Appropriation Acts in the early 2010s. During this period, reports abound of US pressure exerted directly by the US Treasury on foreign banks without going through national finance ministries, to directly push them ‘to stop dealing with Iran’.Footnote ⁷⁷

Taken together, these US ‘emergency’ measures with extraterritorial ambitions banned credit, guarantees or insurance in support of exports to Iranian sanctioned individuals; forbade US imports from sanctioned entities; and froze the assets of Iranian sanctioned entities within US jurisdiction even before a trial could be held. From 2008 until 2015, wholesale sectoral prohibitions (especially targeting Iran’s financial sector), which had been opposed – and specifically vetoed – by the Russian and Chinese governments in the UNSC, were unilaterally added post hoc by EU and US governments in the form of domestic instruments. For private actors like global banks, applying only the targeted sanctions of the UNSCRs against Iran would thus have meant ignoring US and EU sanctions, and exposing themselves to the ‘risk’ of committing sanctions violations in the two largest economies of the world, even if the transactions concerned didn’t take place in the USA or Europe.

Some banks originally contemplated such action, but they were convinced to change strategy and take maximal measures to avoid any kind of financial contact with individuals and entities targeted by the US Treasury – and not only with them, but also with entities that may be suspected of carrying a second or third degree of relationship with such targeted entities, as interviewees in Washington told us. In a few years, from 2005 to 2015, the US government levied fines against global banks that handled transactions to Iran and Sudan which were prohibited under US law (but not under UNSC resolutions or even EU law) if these transactions were denominated in US dollars. These fines amounted to billions of dollars, as in the case of the fine that BNP-Paribas had to pay to US authorities for clearing transactions in its New York branch related to Iranian oil proceeds coming from or going to Iran and Iranian entities that were denominated in US dollars.Footnote ⁷⁸

Our interviewees, who worked as compliance officers in private financial institutions before the signing of the JCPOA, insisted that it was impossible to apply the logic of targeted sanctions to Iran during this period: for them, the potential benefits of admitting Iranian clients or carrying out transactions from/to Iran were not worth the intense vetting procedures that would have been required each time; furthermore, the remaining risk of unwittingly admitting prohibited transactions despite such vetting procedures was even less acceptable. While it is true that entities linked to either Iran’s or now North Korea’s nuclear programmes have taken many covert identities and used many masks to hide their links to these programmes, with this amount of suspicion in these cases, banks and their compliance departments that were asked by the UNSC to adopt ‘vigilance’ and its associated concepts of ‘enhanced due diligence’ in fact stopped calculating the risks associated with every transaction and rather engaged in wholesale practices of derisking.Footnote ⁷⁹

The signing of the JCPOA didn’t change that situation, as it left in place many US domestic sanctions based on the US designation of many Iranian entities as linked to groups (like Hezbollah) that the US government designated as terrorists, which meant that global banks were still wary of too quickly changing their regulation with regard to Iran. After the JCPOA was signed, the logic of targetedness should have meant that, with the lifting of the comprehensive EU and US trade sanctions that targeted the oil trade and investment activities in Iran, the financial sanctions would have been lifted at the same time as sectoral restrictions. This is not what happened. The post-JCPOA situation in Iran suggests that sanctions against Iran followed the logic of comprehensive sanctions.Footnote ⁸⁰ According to the logic of comprehensive sanctions (and, as previously illustrated in the case of sanctioned individuals whose names are likely to stay on the financial sector’s blacklists forever, even if they have been delisted by the UNSC), once a country has been labelled as a ‘cause of money laundering concern’ by the organizations in charge of issuing such statements (e.g. the FATF, or the US Treasury and its Office of Foreign Assets Control (OFAC)), it becomes almost impossible for that country and its economy to be brought back into the community of global banks.

It is therefore not a surprise that, after the Iran nuclear deal of 2015, the first law that Iran contemplated was the so-called ‘FATF bill’ – heatedly debated in the Iranian Parliament – which required that Iranian banks adopt AML and CFT measures promoted by the FATF in order to convince the FATF to change its designation of Iran as a country of money-laundering concern. But even as this legislative effort was pursued in Iran, it was clear that the efforts would hardly bring a change in the FATF’s assessment of Iran’s political economy, not to speak of OFAC’s assessment, and that the reinclusion of Iranian financial institutions (after years of exclusion) was next to impossible, even if the JCPOA explicitly called on European private companies and banks to work towards Iran’s economic recovery by investing massively in its oil sector.

This path dependency illustrated the comprehensive logic of CPF sanctions. It was reinforced, in the specific case of Iran, by the decision made by the US president to pull out of the JCPOA, despite the fact that UNSCR 2231 gives it the force of law. After 2018, banks faced for the first time a stark option: either follow the logic of targeted sanction, by applying only the prohibitions contained in the UNSCRs, or to follow US domestic changes in their worldwide activities. Their over-cautious behaviour, and their refusal to touch any oil-financing schemes in Iran clearly shows which direction they have chosen to follow since 2018. It is unlikely that, even with the change in the US administration, the contradictions between US and multilateral sanctions will be eliminated and that the logic of targetedness will be strictly followed in the counter-proliferation field.

9.5 Conclusion

Today, many international organizations, including the World BankFootnote ⁸¹ or the International Monetary Fund (IMF), have issued warnings after realizing that global banks and other financial actors have massively pulled out of sanctioned jurisdictions as they applied sanctions in a comprehensive manner rather than by implementing narrow sanctions exclusively targeting the culprits responsible for a country’s wrong policy course.Footnote ⁸² International organizations such as the IMF or the World Bank see such cases of overcompliance as illegitimate in an age when comprehensive sanctions are no longer deemed appropriate under new norms of ‘civilized’ state conduct. Still, global banks and other financial actors are not solely responsible for that ‘comprehensivization’ of sanctions: the movement is spurred by the entanglements between targeted and comprehensive logics, especially in the field of counter-proliferation sanctions. These legal entanglements have been patiently weaved together by a proliferation of other international organizations, including the FATF and the Panel of Experts created by the UNSC Sanctions Committees, particularly those verifying the implementation of sanctions against Iran and the DPRK. Together, these organizations have participated in the creation of a fiction which implies that ‘targetedness’ would necessarily rhyme with ‘narrowness’, when in fact ‘targetedness’ is not necessarily incompatible with ‘comprehensiveness’: if the list of ‘targets’ is gradually or suddenly extended to become all-encompassing, then targeted sanctions could be both targeted and comprehensive in principle.

If we observe a general trend towards the ‘comprehensivization’ of so-called ‘targeted’ sanctions, then why do all these institutions still claim to design, monitor and enforce ‘targeted’ sanctions? In fact, we claim that the logic of targetedness is no longer an empirical fact, or even a policy goal, which would be shared by UNSC member states, but it has become a functional assumption that is necessary for the system to continue operating. By implicitly accepting that states are compartmentalized and cannot be assumed to be in full control of their many state agencies nor private actors, all the organizations which claim that the system operates under the logic of targetedness enact a useful charade or ‘fiction’Footnote ⁸³ that allows all governments to distance themselves from the entities suspected of breaching US, EU or UNSC sanctions: if parts of a government are blamed by a PoE or by a foreign government branch (the US Department of Justice or OFAC in particular) for sanctions violation, the central authorities can always claim that such entities couldn’t have acted on behalf of the state, and that they weren’t responsible for such failings. Here, the logic of ‘targetedness’ – with its separation between states and individual perpetrators – protects member states and thus makes their consent to sanctions, including sanction enforcement and monitoring, more likely.

We not only see this protective mechanism functioning in the cases of US sanctions enforcement against Europe’s major banks (from BNP-Paribas to HSBC), in which European governments have largely turned their eyes away from the settlements, but also during PoE investigations, as in the case of the DPRK. It is standard practice for most UNSC PoEs that PoE members would never publish information in their report without first giving the monitored state (for instance, Russia, Vietnam or Ethiopia) the chance to either deny and disprove accusations or work to solve problems. Thus, where PoEs uncover sanctions violations in a given country, they tend not to link violations to governments as a whole but only to specific actors or entities within a country (even if the actors in question are state agencies). For instance, as reported by the DPRK PoE in 2018 in the case of Russia, Russian companies that forged joint ventures with DPRK state companies in violation of UNSC sanctions needed to be investigated, and the PoE members could gain Russia’s support for their investigations by allowing the government to claim that such entities had violated the government’s will if they did create such joint ventures. By operating under the assumption that states are not complicit in sanctions violations before having been alerted of the existence of these violations by PoEs or by OFAC investigations, multilateral and domestic investigatory bodies give them the benefit of the doubt, and strengthen the belief that a few bad apples within the state may have covered up such illegal behaviours, or that miscommunication problems within complex administrations may have prevented such information from surfacing. Investigatory bodies in the field of sanctions enforcement normally use this assumption as a public script when interacting with states or private actors, even where they may find it hard to believe it themselves.

In this chapter, we have also identified several reasons why UNSC member states (especially the P3) have preferred to entangle a comprehensive set of interventions with a targeted sanction regime, rather than imposing comprehensive sanctions in the first place: first, the lack of legitimacy of blatantly comprehensive regimes, at least since the Iraq case; second, the fact that within the UNSC, Russia and China, and sometimes European states, would not agree to adopt comprehensive sanctions against a UN member state, as they are rather critical of sanctions; and third, because the fiction that enforcement actions against sanctions violations should also be targeted helps protect UN member states from being accused of having been complicit in sanction violations, which means, in turn, that sanctions violators are likely to opt more often for cooperation rather than conflict when accused of misdeeds.

Sanctions experts and policy-makers who pursue an interest in upholding peace and the rule of international law through sanctions (rather than war) as well as a concern for human rights may be convinced of the necessity to fight the trend towards comprehensivization, as it risks creating the same human rights disasters in Iran, Venezuela or Syria today that were witnessed in Iraq in the 1990s. They may see this trend as a distortion of their original intent and a misuse of the instruments of algorithmic governance that they collectively created. However, we argue that the financialization of the sanctions regimes bore in its premises an inherent dynamic towards comprehensivization, which could only reveal itself after the first wave of sanctions were adopted and implemented, when contradictions between comprehensive domestic sanctions regimes and narrower multilateral sanctions regimes were partially solved to the benefit of the former, with one reason being the private financial sector’s changing notion of ‘risk’.

To that extent, we believe that the concept of legal entanglement, which places the focus of socio-legal scholars and international organizations specialists at the intersection between these domestic, transnational and multilateral dynamics, is particularly useful to social scientists who are dissatisfied with the old notion of ‘international regime’, even reworked through the use of the updated notion of ‘regime complexity’, as well as to policy-makers who are interested in reconciling sanctions with a concern with human rights. Its use suggests that although efforts to arrive at a more coherent system of rules are welcome, they rarely achieve complete success, and that regimes traversed by a plurality of contradictory rules are not inherently unstable: to the contrary, such legal entanglements can be quite stable over time.

Lex mercatoria, lex petrolea, lex electronica and lex sportiva have gradually entered the mainstream vocabulary of legal scholarship as phenomena highlighting the functionalization and privatization of law in a globalizing world.Footnote ¹ They embody what are often qualified as distinct legal orders or systems arising out of transnational communities segregated along functional lines.Footnote ² This chapter aims to show that the work of the Court of Arbitration for Sport (CAS), which is often identified as the institutional centre of the lex sportiva,Footnote ³ can be understood as that of a seamstress weaving a plurality of legal inputs into authoritative awards. In other words, the CAS panels are assembling legal material to produce (almost) final decisions that, alongside the administrative practices of sports governing bodies (SGBs), govern international sports. It is argued that, instead of purity and autonomy, the CAS’s judicial practice is best characterized by assemblage and hybridity. This argument will be supported by an empirical study of the use of different legal materials, in particular pertaining to Swiss law, EU law and the European Convention on Human Rights (ECHR), within the case law of the CAS. The view advanced here should not be confused with one arguing that the CAS is fully integrated into the Swiss legal order, the EU legal order or into a monistic international legal order. Its main claim is that the judicial practice of the CAS can be captured as the work of a seamstress weaving ‘different bodies of norms with one another’Footnote ⁴ and that lex sportiva can ‘no longer be understood without an account of the ways in which its different parts are entangled’.Footnote ⁵

The CAS plays a central role in the governance of international sports as the main judicial body to which athletes, clubs or federations can turn to challenge the decisions of international SGBs.Footnote ⁶ Its core function in global sports governance is to act as a review mechanism through its appeal procedure which is regulated by the Code of Sports-Related Arbitration (CAS Code).Footnote ⁷ Thus, the CAS is dealing with almost all the high-profile disputes that occupy the sports pages (and sometimes beyond) of our newspapers. It decided whether Caster Semenya or Oscar Pistorius can participate in athletics competitions,Footnote ⁸ it determined whether Michel Platini or Sepp Blatter can be banned from football for violating FIFA’s (Fédération Internationale de Football Association) ethics rulesFootnote ⁹ and it assessed whether Maria Sharapova or Alejandro Valverde have committed a violation of the World Anti-Doping Code (WADC).Footnote ¹⁰ In short, very few of the fundamental decisions that shape the way we experience international sports escape the CAS. While there is no doubt that international sports are being ruled by a transnational regime in which private associations play a fundamental role and dispose of considerable regulatory powers, this regime also provides an interesting terrain to study transnational legal entanglements.Footnote ¹¹

To this end, I focus on the way the CAS produces its awards. I aim to show that the lex sportiva is not an isolated set of norms produced by an autonomous community but results from the blending of different laws assembled through discursive weaving by CAS panels. In this regard, not all national laws are equal at the CAS and, as we will see in Section 10.1, Swiss law is more equal than the others. In practice, the CAS panels draw heavily on Swiss law, its actors, doctrines, rules and decisions.Footnote ¹² Despite being a global court, the CAS remains anchored (physically, sociologically and legally) in a local context. In addition to Swiss law, Sections 10.2 and 10.3 highlight how CAS arbitrators are also weaving references to EU law and the ECHR into their awards. This chapter is a first attempt at looking at the hermeneutic practice of the CAS from the perspective of a transnational legal pluralism that goes beyond the identification of a plurality of autonomous orders to turn its sights towards the enmeshment and entanglement characterizing contemporary legal practice.Footnote ¹³

10.1 The Ubiquity of Swiss Law in CAS Awards

In its awards, the CAS refers to many different national laws. However, one is clearly more present than the others: Swiss law.Footnote ¹⁴ The centrality of Swiss law at the CAS can be linked to three factors: the sociology of the CAS practitioners, the shadow of the Swiss Federal Tribunal (SFT) and the localization of the seats of the SGBs. To start with the last of these, the majority of the international SGBs, which are the primary purveyors of CAS appeals, are located in Switzerland. This means that in most appeal cases Swiss law will be subsidiarily applicable under R58 CAS Code which determines the applicable law and acts very much as a ‘reception norm’ in the sense outlined in Chapter 1.Footnote ¹⁵ Furthermore, the appeals are often based on CAS arbitration clauses enshrined in the statutes of the SGBs which can expressly provide for the application of Swiss law.Footnote ¹⁶ Second, the legal seat of the CAS is Lausanne. Hence, its awards can only be appealed at the SFT where they are reviewed, relatively leniently, on the basis of Article 190(2) of the Swiss Private International Law Act.Footnote ¹⁷ The CAS panels are naturally aware of the need for their awards to pass this (relatively low) bar and therefore pay specific attention to Swiss law in their decisions. Finally, arbitrators, lawyers or administrators active at the CAS often have a Swiss background.Footnote ¹⁸ In this section, I aim to substantiate the depth of the entanglement between Swiss law and CAS awards through a case study focused specifically on appeals against FIFA decisions.

10.2 The Limited Entanglement of EU Law in CAS Awards

EU law and the private regulations of the SGBs have a long history of ‘war and peace’.Footnote ⁴⁵ The famous BosmanFootnote ⁴⁶ ruling of the Court of Justice of the European Union (CJEU) constitutes the high point, in terms of public visibility, of this encounter. Despite the intense relationship between the private regulations of the SGBs and EU law, the latter was until recently quite absent from the CAS.Footnote ⁴⁷ Nevertheless, in an important award dating back to 1999, a CAS panel already recognized the applicability of EU law. It found:

Thus, arguments grounded in Swiss private international law played a pivotal role in opening the possibility for the application and entanglement of EU law at the CAS. Yet, before 2010, only a few (published) CAS awards referred to EU law and even fewer were engaging with it in detail.Footnote ⁴⁹ This has changed in recent years, with a couple of awards addressing at length EU law questions.Footnote ⁵⁰ Such a development is potentially related to the greater sensitivity of legal counsels to EU law and to the arbitrators’ growing awareness of the considerable risk that the cases would in fine reach the European Commission or the CJEU. In general, EU law has found two main applications at the CAS: it has been mobilized to challenge the legality (even constitutionality) of the SGBs’ regulations and it has been constructed as part and parcel of the SGBs’ regulations.

10.3 The Influential Use of the ECHR in CAS Awards

While EU law has been dancing a slow-moving tango with the SGBs’ regulations since the 1970s, the ECHR was, until very recently, almost entirely foreign to the world of sport.Footnote ⁷² The European Court of Human Rights (ECtHR) only started to indirectly scrutinize the practice of the CAS and the world anti-doping regime in 2018 and has done so in a relatively restrained fashion.Footnote ⁷³ In spite of this, the ECHR has been regularly mentioned in CAS awards.Footnote ⁷⁴ Even though some panels expressed ‘serious doubts’Footnote ⁷⁵ regarding the applicability of the ECHR to the SGBs’ private regulations or even sometimes squarely denied it,Footnote ⁷⁶ when confronted with claimants invoking the ECHR most CAS awards at least considered its application. This inconsistency can be traced back to the unstable composition of CAS panels and non-binding nature of CAS precedents. In any event, most panels at least emphasized the need to respect the procedural rights enshrined in Article 6(1) ECHR.Footnote ⁷⁷ Indeed, a panel ‘should nevertheless account for their [the provisions of the ECHR] content within the framework of procedural public policy’.Footnote ⁷⁸ In a more direct language, a sole arbitrator found ‘rather obvious’ that ‘a federation cannot opt out from an interpretation of its rules and regulations in light of principles of “human rights” just by omitting any references in its rules and regulations to human rights’.Footnote ⁷⁹ In this latter version, the ECHR seems to be even assimilated to an ‘overarching norm’.Footnote ⁸⁰

10.4 Conclusion

The CAS is a special place. It is not really an arbitral tribunal, nor is it a proper international court, but it stands as a living embodiment of the ‘unidentified legal objects’Footnote ¹³⁰ that proliferate in transnational legal practice. It is often presented as necessary to the transnational governance (and mere existence) of international sports. Important CAS decisions, such as the recent Semenya award, are subjected to global attention and intense scrutiny. This chapter portrays the CAS as a judicial site where awards are being produced through a process of legal weaving that enmeshes different types of legal material. Its practice is not a solipsistic work based only on the denationalized law of an autonomous transnational community but rather an artistic mélange of styles producing a textual assemblage that is tailored to each case. In the context of the lex sportiva, entanglement is undoubtedly the ‘normal state of the law’Footnote ¹³¹ and the CAS represents a striving ‘Inter-Legality Hub’.Footnote ¹³²

Nevertheless, it is true that not all legal texts are equally present in CAS awards. As we have seen, Swiss law is much more present than, say, French law (or any other national law for that matter). Similarly, EU law and the ECHR are regularly invoked while there are very few mentions of other sources of international law. One should not lose sight of the fact that the CAS is not an a-national construct hovering above our heads, but is embedded (like many international SGBs) in the territorial and legal context of Switzerland. Furthermore, entanglements cannot be severed from the actors.Footnote ¹³³ Many of the professionals active before the CAS as arbitrators or lawyers are Europeans or even Swiss. Finally, the main avenue to challenge CAS awards is the SFT (and, to a much lesser extent, other European courts and administrative bodies). It is thus quite logical that when CAS panels are called to assemble an award, they draw on both what they know and what they want to assuage. Thus, the CAS works not so much as an autarkic judicial machinery reliant on its own supply of power and inputs but rather as a transnational legal assembly line importing various parts of its awards from different suppliers on a case-by-case basis. Hence, the judicial practice of the CAS can help us move beyond the billiard ball model of autonomous transnational legal orders or systems in order to perceive the hybridity of transnational legal practice.Footnote ¹³⁴ At the CAS, Swiss law, EU law and the ECHR are not so much clashing with the lex sportiva as they are entangled within it. They become an integral part of the lex sportiva. This conclusion does not imply that the ECtHR or the CJEU should defer to the CAS, to the contrary. It means that they should scrutinize closely the way it speaks ‘their’ language, like they assess the way national courts are speaking it. In a world where nobody is in a position to impose top down a single set of global rules applied in a uniform way, transnational legal practice is bound to be the result of strange loops and contextual assemblages.

The complex beauty of these rhetorical entanglements should not hide the fact that the CAS is taking distributive decisions which are very hard (i.e. costly) to challenge. This chapter has not focused on the politics lurking behind these entanglements. In other words, what are their underlying drivers or unspoken purposes? In order to answer this question, one would need to carefully investigate who does the entangling and why. There is no reason to believe that these entanglements are per se fair or just. Therefore, the ethics of those producing legal entanglements must be subjected to strict scrutiny.Footnote ¹³⁵ In fact, the dark face of the ubiquity of transnational legal entanglements might be that ultimate political accountability becomes difficult to locate as decisions are enmeshed in a plurality of political and legal contexts. Who should be blamed for a particular interpretation of the FIFA RSTP? Is it the responsibility of FIFA, the European Commission, the CAS or the SFT? Where can we ask to change it and how? The risk is that entanglements lead to a form of organized irresponsibility, as if the legal assemblages of the CAS were not the result of deliberate choices but natural reflections of what a patchwork of laws say. Hence, the age of entanglements calls for a relentless critique of the politics lurking behind the textual assemblages. If legislators are found simultaneously in multiple places and levels, inside the SGBs, at the Swiss parliament or in Brussels, we need to think about how to recreate a transnational democratic space (and process) adapted to this multiplicity. Similarly, if the CAS is in a position to assemble its awards relatively freely, in light of the extremely limited control exercised by the SFT and the high costs of challenging a CAS award elsewhere, then we must seriously consider those who are doing the assembling. Who are they? How is their legitimacy and authority justified? Are they sufficiently impartial and independent from the SGBs? How are they selected? What are the mechanisms in place to prevent the rise of conflicts of interests? Once we recognize that the assembling or entangling of transnational law is the new normal, we must urgently grapple with these questions. The hybridization and pluralization of transnational legal practice might be a necessary consequence of the liquefaction of our transnational lives, but it raises fundamental problems for the way in which political agency is exercised and decision-makers are held accountable. One answer to this conundrum could be to move towards entangling our politics and accountability mechanisms, meaning that the citizenry has to exercise agency at multiple levels (e.g. through social movements, consumer boycotts or simply voting at the European Parliament elections) and to move strategically between different accountability fora (e.g. the European Commission, national competition authorities, national courts, Organisation for Economic Co-operation and Development contact points or the ECtHR).Footnote ¹³⁶ In the context of the CAS and the lex sportiva, Claudia Pechstein has shown the way, even though it came at great personal costs,Footnote ¹³⁷ by challenging her doping ban before the SFT, the German courts and the ECtHR. To initiate these critical shifts in the way we engage in politics and law, it is first essential to grasp the ubiquity of legal entanglements in the operation of transnational law. The aim of this chapter was to contribute to this prise de conscience by exposing how the CAS transforms transnational sporting disputes into legal gold: authoritative awards.

11.1 Introduction

The global financial order is key to our economy but highly fragile. And the norms and institutions to stabilize it are themselves plural and fragmented – in fact, a prime example of multiple bodies of norms coexisting in global governance. This order is characterized by a multiplicity of norms and institutions with various claims to authority, reflecting different priorities and normative orientations. How have actors dealt with the tensions that this plurality generates and where has this left the multiple legalities and their relations?

To answer this question, this chapter examines the recent history of the global administration of financial stability. In the last two decades, this area of financial regulation has been shaped by responses to the perceived risks associated with multiplicity of norms and institutions. The contemporary administration of financial and monetary affairs seems to be surrounded by ‘mystery’Footnote ¹ and ‘ambiguity about the relationship between all of the various sources of international regulatory standards’.Footnote ² This complexity may partly depend on our limited understanding of the organizational structures of these relationships and the drivers behind them.

In various contexts of global financial governance, characterized by a significant degree of informality, regulatory decentralization and dynamic institutional interactions, societal actors have shaped different ordering projects in opposition to ‘chaos’ over time. From a macro perspective, previous studies have helpfully analysed the broad historical and political contexts in which these ordering projects have come about by placing emphasis on ‘the power and interests of leading financial powers, domestic political dynamics, and the role of transnational actors’.Footnote ³ Yet we do not quite know the forms through which institutional multiplicity has been organized and with what effects for the overall order. Drawing upon the concepts of this volume, this chapter analyses different forms of entanglements in contexts of global financial regulation, focusing on some of the sites, actor constellations and dynamics behind them.Footnote ⁴ This chapter uses the term bodies of norms to connect the variety of recommendations, standards, best practices and codes recognized by regulators as factors of financial stability. At various decision-making settings, financial regulators, legal professionals and economic experts disagreed over the identification of the relevant sources of authority and their organizational structures. For example, the prevailing regulatory response that followed the global financial crisis of 2008 was a call for a more or less centralized institutional framework for ‘a global banking and financial system’. Some lawyers imagined a new field of international financial law or lex financiera.Footnote ⁵ Many argued that the International Monetary Fund (IMF) should have institutional primacy, while others regarded the Financial Stability Board (FSB) as the appropriate locus of authority, and yet others suggested that the function of a new World Financial Authority should be allocated. However, opposing views defended a more modest reform through a pluralist approach to ordering.Footnote ⁶ This chapter questions ambitious attempts at structuring and controlling multiplicity through one ‘common frame of reference’Footnote ⁷ such as legalization in finance. I contrast this dominant view with the perspective of ‘entangled legality’Footnote ⁸ as an alternative way of thinking about relations between multiple kinds of laws populating global finance. From this perspective, the project of legalization is only one among a variety of ways of ordering multiplicity, which may equally contribute to dynamics of enmeshment. While these relations are embedded in a mosaic of interactions between multiple orders, elements of this wider environment form the background of the analysis.

The analysis proceeds as follows. Following this introduction, Section 11.2 describes international financial standards as interrelated bodies of norms and foregrounds how they became entangled in regulatory settings over time. Drawing on public documents from the Bank for International Settlements (BIS), the United Nations (UN) and the IMF, I examine the forms in which these bodies of norms were brought into relation by different actors. In the wake of the Asian financial crisis of 1997, officials at the IMF, UN and BIS made claims ordering institutional fragmentation. In this context, the Financial Stability Forum (FSF) emerged as a ‘site of entanglement’ and the drafters and users of its Compendium of Standards came to play a central role in organizing relations between norms that were identified as ‘international standards’. Against this historical backdrop, Section 11.3 identifies different interface norms and examines how they were used by actors in norm-making and norm-implementation settings. Within the debate on the reform of the international financial architecture, regulatory harmonization and overarching institutions have been dominant responses to the perceived risks of institutional multiplicity. Yet, while there seems to be no consensus over the content of these overarching institutions, competing forms of ordering persist.

11.2 Contexts of Entanglement in Global Financial Governance over Time

From the perspective of international legal theory, the actors and structures characterizing global financial regulation differ from those encountered in traditional fields of international law. Three striking features of this area of global governance are the informality, multiplicity and dynamic interactions of its norms, institutions and sites of decision-making.Footnote ⁹ In many of these settings, state officials, international organizations, financial institutions and other private actors have recognized norms that often take the form of best practices and standards rather than more established categories of international law.Footnote ¹⁰ Equally striking, these norms have often made their appearance in groups, resembling a relatively loose assemblage of ‘clusters’ of norms. In this respect, the term bodies of norms seems apt to underline their interrelatedness.Footnote ¹¹ Institutional players in global financial regulation have often highlighted this particular feature of international standards by placing emphasis on their interconnectedness and interdependence as commonsensical, just the ‘normal’ thing to do,Footnote ¹² and in doing so they have not found it problematic to blur their boundaries, for example by referring to their own previous work or work done by others.

An early manifestation of the discursive formation of these associations could be observed circa 1995 at the ‘Tripartite Group of Banks, Securities and Insurance Regulators’. An informal working group created by the Basel Committee on Banking Supervision, the Tripartite Group facilitated the encounter of national bank, securities and insurance regulatorsFootnote ¹³ to exchange information and perform ‘intensive cooperation’ to address regulatory problems related to ‘financial conglomerates’. A senior official from the US Treasury reported that states’ competing interests made it challenging to agree on one single supranational institution to provide a solution to these problems.Footnote ¹⁴ It is worth mentioning what this informal working group aimed at innovating against. Until then, challenges associated with ‘financial conglomerates’, in particular the ‘regulatory arbitrage’ problem, had been dealt with from the perspective of different ‘regulatory groups’.Footnote ¹⁵ In contrast, the Tripartite Group responded to pluralism ‘from a joint perspective’. The making of this ‘joint perspective’ in opposition to the ‘different approaches adopted by supervisors’ enabled national financial regulators to ‘synthetize’ the work that had previously been done.

This synthesis was recognized by members of the Basel Committee on Banking Supervision (BCBS), the Technical Committee of the International Organization of Securities Commission (IOSCO) and the International Association of Insurance Supervisors (IAIS) as a ‘sound basis for further collaborative efforts’Footnote ¹⁶ which led to the creation, in 1996, of a ‘Joint Forum on Financial Conglomerates’.Footnote ¹⁷ The Joint Forum was an informal setting where senior bank, insurance and securities supervisors from thirteen countriesFootnote ¹⁸ assembled to ‘exchange information’ and practice ‘supervisory coordination’. The Basel Committee’s Minimum Standards for the Supervision of International Banking Groups and their Cross-border Establishments, IOSCO’s Principles for Memoranda of Understanding and IAIS ‘Insurance Concordat’ – Principles Applicable to the Supervision of International Insurers and Insurance Groups and their Cross-border Establishments – were jointly recognized by members of the Joint Forum as ‘a common set of principles’ to practice exchange of information among supervisors.Footnote ¹⁹

Another informal site of interaction between ministers of finance, central bankers from ‘industrial countries’Footnote ²⁰ and ‘emerging markets’Footnote ²¹ and representatives from international institutions and international standards organizationsFootnote ²² was the Working Party on Financial Stability in Emerging Market Economies. In 1997, under the chairmanship of Mario Draghi, the Working Party issued a report on the banking sector in emerging markets, referring to ‘a corpus of sound principles and practices’Footnote ²³ by which they brought norms produced by ‘international groupings’ into relation.Footnote ²⁴

11.3 Responding to Multiplicity in Global Financial Governance

Against the historical and doctrinal background of some of the projects of reordering global financial regulation discussed so far, this section looks more closely at the interface norms associated with projects to respond to multiplicity in the different institutional settings examined.

11.4 Conclusion

This chapter has focused on forms, locations and practices in which relations between bodies of norms in global financial governance have been defined in the aftermath of the Asian financial crisis and the global financial crisis. Drawing on official pronouncements connected to the IMF, the UN and the BIS, it has observed the different contexts in which these relations have come about. The institutional memory examined has provided traces of ad hoc but not uncontroversial construction of entanglements and the participants and factors behind them. In many of the sites of governance examined, different forms were articulated through dynamic and informal interactions of a multiplicity of regulators, international institutions and international standard-setting organizations involved in the global governance of financial stability.

Competing ordering projects have emerged in different contexts in the theory and practice of global financial governance over time. These projects were also sites in which actors imagined different ways of shaping ‘international standards’ and their relations, with implications for the forms of entanglement that came about through their claims. Since the second half of 1990s, the multiplication of standards deemed to be relevant by financial regulators has triggered efforts to define their relations, and regulators have relied on different interface norms at different sites of governance to create order. International lawyers have often imagined the global financial order from an intra-systemic perspective and sought to organize institutional pluralism through overarching norms such as the rule of law.

Although many of the actors analysed imagine a global financial system, there is a lack of general agreement on the implications for the relations between different bodies of norms. Differently situated actors defined their relative weight in different ways by placing emphasis on different norms and sites of authority. For example, in their respective ordering projects in response to multiplicity, officials at the UN, the IMF and at the BIS have come up with conflicting views on the position of the relevant sites of authority. From this perspective, the emerging overall order remains pluralistic.

Drawing on the history of the Compendium of Standards, differences between forms of entanglement connected with the Financial Stability Forum and those linked to the IMF and UN contexts could be observed. Standards included in the Compendium were ordered through an interplay of straddling practices and reception norms. When the Compendium was still in the making, the former type of interface norm appeared in the work of the Task-Force on Implementation of Standards. In this context, boundary-drawing practices, too, were used to create distance from norms that actors assembled at the FSF did not identify as relevant. By contrast, other bodies of norms were connected to form an official list of international financial standards, around which an international consensus had to be built. The making of a list of ‘twelve key standards’ was the outcome of a straddling practice by the Task-Force, which had the effect of blurring the boundaries between the bodies of norms that were brought within this new list. However, the increasing institutionalization of the FSB has been coupled with a greater emphasis on practices of regulatory uniformity and centralization. Through the Compendium of Standards, regulators assembled at the FSB sought to provide a common frame to respond to the dilemmas of proximity and difference of bodies of norms in global financial governance. Over time, the FSB has sought to bring together multiple monitoring practices and their bodies of norms within a single overarching ‘framework’.Footnote ¹⁴² From this perspective, it seems that a hierarchical ambition has also been at play.

However, institutional pluralism provoked similar responses in other settings, too, which triggered further forms of entanglement through the production of further compendia, lists, and rule books to order relations between bodies of norms for global financial stability. The emerging picture is heterogeneous, as evidenced by the absence of a single global decision-maker, the coexistence of different plans for reform and different visions of the relevant sites of decision-making and forms of authority.

12.1 Introduction

The field of corporate social responsibility (CSR) is a rapidly growing area of transnational regulation that is characterized by a multiplicity of norm-making processes in a variety of institutions and different forums. These processes are reflexive, engaging in mutual interaction through mirroring, distancing or complementing existing normative frameworks. The resulting landscape of CSR is defined by contestation and entanglement as CSR instruments of different origin coexist side by side, sometimes with competing claims to compliance. As a result, CSR is a particularly fertile ground for studying how the relations between different bodies of norms are construed.

This chapter sets out to understand how actors entangle CSR norms and, in doing so, create an interlinked web of normative systems, both formal and informal, operating within the state as well as without it. Section 12.2 serves as a brief orientation within the complex world of CSR, identifying the main discourses and categorizations. Out of the multitude of collections of norms which come under the umbrella of CSR, the chapter draws focus to meta-regulatory CSR norms, and in particular the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (the Guidelines).Footnote ¹ Being positioned at the intersection of traditional international law, soft law initiatives developed within international organizations, and private standards and codes, the Guidelines provide a focal point for CSR entanglement. Section 12.3 looks at how the structural features of the Guidelines have contributed to the coordinated legal entanglement between various bodies of norms, which should be understood as the creation of stable, systemic and lasting connections and points of interaction. Coordinated legal entanglement can also create space for ad hoc entanglement, which is analysed in Section 12.4. The idea of ad hoc entanglement refers to more fluid and contingent interactions which might deepen the ties between bodies of norms but also sever them. The turn to ad hoc entanglement also involves a change of the subject of enquiry, moving from the systemic features of the OECD Guidelines to focus on actual instances of disputes around CSR, crystallized in the case law arising out of OECD National Contact Points (NCPs) – the Guidelines’ implementation mechanism. As indicated, the picture here is more diverse, and interactions between various frameworks are analysed on a scale ranging from distancing to proximity.

By exploring forms of legal entanglement in the field of CSR, the aim is to glean more insight into the evolving shape of this global legal order, which has expanded to include a range of new subjects, norm-making institutions and regulatory tools. To this end, Section 12.5 draws attention to some of the dynamics which appear to be emerging through the interaction of the Guidelines with other bodies of norms. These types of structuring disrupt the traditional notion of a horizontal international legal order. What we see instead is something more akin to a three-dimensional and polycentric web created through new and irreverent forms of linkage and accommodation over time.

12.2 The Contours of Corporate Social Responsibility

There is no single, accepted definition of CSR or its scope. Many definitions exist, each highlighting different aspects of CSR according to the interests of the defining actor. Business groups, for example, tend to adopt definitions of CSR that highlight voluntariness, reinforcing the distinction often made between law and CSR.Footnote ² Capital-exporting states similarly emphasize the voluntary aspect of CSR. The EU, for instance, defines CSR as ‘a concept whereby companies integrate social and environmental concerns in their business operations […] on a voluntary basis’.Footnote ³ On the opposite end of the spectrum, non-governmental organizations (NGOs) – confronted with the reality of human rights abuses and environmental harms associated with the activities of global corporations – often prefer not to use the term CSR at all, rejecting the way it has been framed and operationalized by businesses. For example, the Amnesty International homepage on ‘corporations’ does not mention the term ‘corporate social responsibility’ once. Instead, Amnesty International calls for corporate accountability, thus bringing it closer to the notion of accountability under law.Footnote ⁴

The dichotomy about CSR being either intrinsically voluntary or binding is somewhat misleading, however. As Zerk notes, the regulatory impact of CSR provisions does not necessarily correlate to their formal binding power.Footnote ⁵ More neutral definitions of CSR thus avoid references to the mandatory/voluntary distinction, emphasizing instead the social and environmental embeddedness of corporate activities and focusing on the corporate responsibility to address negative impacts while maximizing positive contributions. In this vein, Aguinis and Glavas define CSR as ‘context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance’.Footnote ⁶ Similarly, Zerk defines CSR as ‘the notion, that each business enterprise, as a member of society, has a responsibility to operate ethically and in accordance with its legal obligations and to strive to minimise any adverse effects of its operations and activities on the environment, society, and human health’.Footnote ⁷

In sum, CSR can encompass adherence to both voluntary commitments and legal obligations with regard to corporations’ impacts on society in the broad sense of the term. CSR norms can be codified in many different forms and may be produced by a host of different actors. Individual companies produce ‘codes of conduct’ containing general principles for ‘ethical business conduct’, often applicable in relation to suppliers/subcontractors, and occasionally linked to specific monitoring (and even complaints) mechanisms, and with sanctions in case of non-compliance. Codes of conduct are also produced at the sectoral level by industry associations, or in the context of multi-stakeholder groups (e.g. the Fair Labour Organization). NGOs and civil society actors have also produced a wide-ranging set of CSR norms, including labelling initiatives (e.g. Fairtrade), sectoral principles or certification schemes (e.g. the Fairmined Standard for Gold from Artisanal and Small-Scale Mining), multi-stakeholder initiatives (e.g. the Ethical Trading Initiative) and guidelines (e.g. the Voluntary Principles on Security and Human Rights). In many instances, governments have organized, facilitated, funded or participated in the drafting of CSR codes, sometimes even establishing their own labelling schemes (such as the EU’s Ecolabel).

A category of CSR norms which is of particular interest to this chapter is the so-called ‘meta-regulatory’ instruments. These can be broadly described as CSR norms produced by international organizations and standard-setting organizations which are directed at multinational corporations (e.g. the International Labour Organization (ILO) Tripartite Declaration containing minimum labour standards). Some of these instruments cover a broad range of areas (e.g. the OECD Guidelines) and are linked to non-judicial complaints mechanisms, while others are directed at specific sectors (e.g. the OECD-Food and Agriculture Organization Guidance for Responsible Agricultural Supply Chains) or cover only specific areas of impact (e.g. the UN Guiding Principles on Business and Human Rights). Positioning themselves above other CSR norms, they often attract entanglement and serve as focal points for interaction.

12.3 Coordinated Interaction at the Meta-regulatory Level: CSR Systems and Their Linkages

The uninhibited increase in the number of CSR systems and their ensuing plurality makes them an excellent target for the study of legal entanglement. The proliferation of CSR initiatives creates a veritable ‘market’ in which regulatory systems mutually interact, with cooperation and competition representing merely the pinnacle of their diverse interactions.Footnote ⁸ This section focuses on meta-regulatory instruments which inherently ‘regulate regulation’Footnote ⁹ and, as a result of this, have a higher propensity for coordinated entanglement – that is, creating lasting and relatively stable regime interactions which contribute to an interlinked web of normative bodies of norms. Among these CSR frameworks, the OECD Guidelines stand out in particular due to their comprehensive coverage of corporate behaviour and structural openness towards other frameworks. As Backer notes, the Guidelines ‘are beginning to serve as the focal point for the construction of an autonomous transnational governance system that is meant to serve as the touchstone for corporate behaviour in multinational economic relationships’.Footnote ¹⁰

The history of the Guidelines dates back to 1976 when the document was born as an annex to the OECD’s Ministerial Declaration on International Investment and Multinational Enterprises. Other authors have written comprehensively about the development of the Guidelines;Footnote ¹¹ here it suffices to say that they are a soft law document containing recommendations to multinational enterprises in relation to the adverse impacts which arise as part of their business activities. While the recommendations themselves are not binding on corporations, adhering countries (including some non-OECD countries) have an obligation to promote the Guidelines.Footnote ¹² Over the years, the Guidelines have undergone multiple revisions which have significantly expanded both their subject scope and geographical reach, with the major revisions happening in 2000 and 2011. From a legal entanglement perspective, the earlier versions of the Guidelines were uninspiring as they ‘made no reference to standards other than those created in the national sphere’.Footnote ¹³ Despite the existence of reservations about the merits of ‘cross-pollination’ with other bodies of norms,Footnote ¹⁴ however, the 2000 revision of the Guidelines embraced coordinated entanglement through a number of provisions in the updated text. First, the scope of regulation applicable to corporate behaviour was extended beyond domestic norms to include all ‘applicable law’,Footnote ¹⁵ clarified through the OECD’s commentary to the Guidelines’ chapter on labour standards as referring to the idea that enterprises can be subject to ‘national, sub-national, as well as supranational levels of regulation’.Footnote ¹⁶ A similarly broad wording was adopted in relation to the chapter on environment, which refers to ‘relevant international agreements, principles, objectives, and standards’.Footnote ¹⁷ The wording created an opening through which the Guidelines could be entangled with other bodies of norms, at first being mainly restricted to more traditional international law norms, but this continuously expanded. Second, the 2000 version of the Guidelines explicitly identified a number of instruments which were considered as a relevant resource to determine the scope of obligations, or which the Guidelines were aligned with. Out of those, the various ILO documents citedFootnote ¹⁸ and the International Organization for Standardization (ISO) Standard on Environmental Management Systems stand out, as they can be seen as directly competing with the Guidelines in the ‘market’ of transnational regulation of corporate conduct. By including such references in the text, and predominantly in the Commentary which forms an integral part of the Guidelines, the OECD began to create the sort of lasting, systemic connections between bodies of norms which characterize coordinated entanglement and enmeshment, and realize the benefits resulting from cooperation between systems.Footnote ¹⁹

The 2011 revision of the Guidelines further developed this trend. ‘Applicable law’ became ‘applicable laws and internationally recognized standards’,Footnote ²⁰ providing a basis for entanglement with bodies of norms which might not be considered law under doctrinal interpretations. The collection of explicitly entangled frameworks grew as well. The undeniably biggest contribution came from the inclusion of a new, standalone chapter on human rights, inspired by the UN Guiding Principles on Business and Human Rights (UNGPs).Footnote ²¹ The alignment of the Guidelines with the UNGPs significantly expanded the normative CSR web, creating direct and indirect linkages with a multitude of bodies of norms. The UNGPs are framed as a ‘conceptual and policy framework’ for business and human rights, elaborated through extensive multi-stakeholder consultations led by Special Representative (SR) John Ruggie. Having been adopted by the UN Human Rights Council,Footnote ²² they operationalize the three-pillar ‘Protect, Respect and Remedy’ FrameworkFootnote ²³ developed by SR Ruggie. While they perform a number of complex roles vis-à-vis a multitude of actors, for the purposes of this chapter we can classify them as a global soft law CSR framework, albeit acknowledging their multifaceted nature. An important element of the UNGPs is that their implementation takes place through ‘influence on or integration into other transnational business governance instruments’.Footnote ²⁴ Among these, the Guidelines take pride of place, evidenced by SR Ruggie’s assertions that in parallel to preparing the UNGPs he worked closely with the OECD to ensure consistency between the two bodies of norms.Footnote ²⁵ Beyond the Guidelines, the most recent amendment of the ILO MNE DeclarationFootnote ²⁶ takes into account normative developments within the UNGPs, directly transposing some parts of the UNGPs with only minor clarificatory changes in their wording; and both the International Finance Corporation (IFC) Performance Standards and ISO 26000 Sustainability Standard have been coordinated so as to ensure compliance of their respective human rights provisions with the UNGPs.Footnote ²⁷ Buhmann describes this as ‘mutual piggybacking’ between corporate governance schemes, providing implementation mechanisms for the UNGPs, and the UNGPs in turn imbuing other bodies with legitimacy.Footnote ²⁸ Using the categorization suggested by Krisch in Chapter 1, the UNGPs are performing the role of ‘overarching norms’, characterized by the intra-systemic and overarching nature which they display in regard to the regulation of multiple bodies of norms within a single system.Footnote ²⁹ Thus, the UNGPs enable the weaving together of international human rights law provisions across different normative bodies and, in doing so, indirectly entangling the Guidelines in an intricate normative web.

A further major feature of the 2000 and 2011 revisions of the Guidelines is the development of straddling practices – ‘norms and practices that straddle different bodies of norms without being seen to belong to either’Footnote ³⁰ – and again, the UNGPs are prominent in this regard, with their introduction of the concept of human rights due diligence. Although the notion of due diligence is not uncommon within international law, particularly in international environmental law,Footnote ³¹ the decision by SR Ruggie to reconceptualize it in the context of human rights obligations of corporations, that is non-state actors, was novel. Yet, when the human rights due diligence principle was incorporated into the Guidelines, it was not restricted to the human rights chapter – the OECD took the decision to make it applicable to all areas covered by the Guidelines. A similar thing happened to the concept of Environmental Impact Assessments (EIAs), introduced in the earlier versions of the Guidelines. The fundamentals of the concept, which originated within international environmental law, found application also in relation to non-environmental impacts of corporate behaviour, morphing into Environmental and Social Impact Assessments (ESIAs) and Social Impact Assessments. As will become clear from Section 12.4, the implementation mechanisms of the Guidelines have steadily portrayed these concepts as true straddling practices, being irreverent about their origins and treating them as inherent to the Guidelines.

12.4 Focal Points for CSR Interaction: NCPs as Sites of Ad Hoc Legal Entanglement

One of the distinguishing features of the OECD Guidelines is their implementation framework, based primarily on the practice of mediating complaints (called ‘specific instances’) by NCPs established domestically in countries adhering to the Guidelines. The geographic spread of NCPs, significant differences in their inner organization and the flexible and open-ended nature of the specific instance procedure create an inherently diverse system which has proved to be a suitable breeding ground for ad hoc legal entanglement. At present, there are forty-eight NCPs, distributed both in the home and host countries of multinational enterprises. The Guidelines provide adhering countries with significant leeway when it comes to setting up NCPs, with different organizational forms being envisaged and with room for the involvement of a variety of stakeholders.Footnote ³² As the most recent annual report on the Guidelines shows, NCPs appear to be operating with four decision-making structures with varying degrees of interministerial integration and stakeholder engagement.Footnote ³³ The diversity of actors already involved at the organizational level creates space for a variety of perspectives, and bodies of norms, to be brought to the table. The inclusion of external CSR norms is further facilitated by the open-endedness of the provisions on specific instances. The mandate for specific instances is defined vaguely – essentially, it ‘is intended to provide a consensual, non-adversarial, “forum for discussion”’.Footnote ³⁴ What this means in practice, however, is open to interpretation by NCPs, and as this section shows, NCPs do diverge significantly in the way they understand this mandate.

At its simplest, the procedure is supposed to bring together interested parties to discuss issues arising in relation to activities of multinational enterprises which potentially impact on the implementation of the Guidelines. The term ‘interested parties’ is important, as it denotes the open-ended definition of who can trigger a specific instance. Complaints are generally brought by NGOs supporting the claims of affected communities but can also be initiated by trade unions, directly by concerned individuals, multi-stakeholder initiatives, local communities, businesses and even the NCPs themselves, showing that the potential range of actors who can initiate procedures is extensive.Footnote ³⁵ There is similar flexibility when it comes to the determination of relevant CSR norms, with the Guidelines simply stating that specific instance proceedings should be carried out ‘in accordance with applicable law’.Footnote ³⁶ In interpreting the rather vaguely formulated provisions of the Guidelines, parties to the NCP process can thus refer to external bodies of norms, including international soft law. As neither the Guidelines nor the Procedural Guidance set out how external norms should be brought to bear on the Guidelines, normative relationing between bodies of norms in the NCP process often has an ad hoc, even haphazard quality to it, relying on the discursive contributions of the various actors involved in specific instances. NCP case law thus provides a window into the still fuzzy, emerging structures of the postnational world of law in which actors irreverently weave loose ties between non-hierarchically situated bodies of norms in new governance spaces.

The case studies in Sections 12.4.1–12.4.3 allow us to look through the window and see whether patterns and common dynamics can be identified. The study provides an overview of over 130 concluded NCP cases dating back to 2011 when the second revision of the Guidelines took place. The study also includes a number of pre-2011 cases which provide perspective on how the NCP system dealt with entanglement before the revision. It is important to note that the majority of submitted complaints are not resolved (a small number are withdrawn, many are rejected and a significant number of cases are concluded without a mediated agreement due to withdrawal by one of the parties).Footnote ³⁷ Moreover, only in rare cases are NCPs willing to make assessments of non-compliance with the Guidelines in the absence of a joint/mediated agreement. The present study only focuses on those specific instances concluded by the NCPs (whether with or without a mediated agreement), thus excluding cases which were not accepted or are still pending.

The picture which emerges shows a nuanced approach to normative entanglement. While most complaints are concluded without references to external norms, interaction with other bodies of norms is not uncommon – some form of relationing was identified in around a quarter of the cases studied. A dominant feature apparent from the cases is the notion of different ‘shades of entanglement’, with NCP-specific instances which demonstrate distancing and proximity occupying opposite ends of the spectrum. Some of the examples cannot be clearly categorized as either but nevertheless prove informative regarding how participants in the NCP process construct the responsibilities of corporations under the Guidelines by reference to other bodies of norms and thus fall into a grey area somewhere in-between. However, even specific instances falling into a single category show different intensities of each dynamic and variation as to the ‘commitment’ by an NCP to distancing or proximity between bodies of norms. Thus, while the three main categories are useful from an analytical perspective, entanglement within the system of the OECD Guidelines is best understood as operating on a spectrum with different shades being present both between and within the two opposite ends of the distancing–proximity dichotomy.

12.5 Implications and Observations

The open formulation of the OECD Guidelines gives ample room for NCPs to resort to external bodies of norms and to position themselves in the context of a broader and evolving discourse around CSR. As shown in Sections 12.3 and 12.4, the openness of the Guidelines has increased over time, creating structural opportunities for entanglement. However, as demonstrated by the specific instances covered, the NCP procedures are incredibly varied and have the effect of producing a web of entanglement. An NCP’s understanding of its own role or its organizational structure and available resources can affect the degree to which it is willing to promote entanglement with external norms. The more restricted an NCP’s understanding of the scope of the Guidelines and its role in the complaints process, the more reluctant it will be to make a compliance assessment. In contrast, as has been demonstrated in the last three UK-specific instances, an NCP that perceives its role as more than being a simple mediator will be more inclined to take a proactive approach in assessing the validity of a complaint which can increase the likelihood of entanglement.

Variety is not limited to NCPs only, as the parties to the proceedings have also been shown to drive entanglement. The broad formulation of who can initiate a specific instance procedure and the diverse range of entities which have found themselves in the position of respondentsFootnote ¹⁰¹ means that an extensive group of actors can bring their perspective (and the bodies of norms to which they adhere) to the table. And, as the specific instances of Bralima and Heineken or Norconsult AS highlight, NCPs are often willing to endorse entanglement driven by the parties. Additionally, the form and substance of (external) norms also affect the likelihood of entanglement. For example, the World Heritage Convention as a ‘list-based treaty’ invites entanglement more readily than framework conventions such as the Convention on Biological Diversity, which does not have a clearly defined scope and contains only general provisions.Footnote ¹⁰²

Indeed, the categorization of specific instances adopted within this chapter can be deceptive, as it simplifies a very nuanced picture of entanglement in which multiple dynamics can be present in a single case. Even examples of the same dynamic can take various forms and can be framed in different terms, with different language corresponding to the different shades of entanglement. The UK-specific instances are again informative in this regard. In GCM Resources and G4S, when the NCP considered a particular norm or standard as applicable, it would often (but not exclusively) use the phrase ‘the NCP notes’ and then refer to the relevant provision in question, possibly engaging with it in more detail. The KPO instance stands in contrast to this, with the wording of ‘notes’ and a particular norm being much less used, and has been largely replaced by two separate subsections within the specific instance (‘Applicable Standards’ and ‘Guidance Available on Human Rights’) which include the majority (but, again, not all) of the standards referred to. Given that KPO represents a more recent instance, the change might indicate a move towards more systematization in engagement with norms external to the Guidelines. Another NCP to draw upon is the Dutch one, which has also utilized the combination ‘note’/‘notice’ and a particular norm on occasions,Footnote ¹⁰³ but has also relied on other formulations such as ‘in light of’Footnote ¹⁰⁴ a particular system, especially when it makes recommendations as to the conduct expected of a respondent. In general, some formulations are becoming standardized but the shades of entanglement are really characterized by diversity, mirroring the Guidelines’ system, and maybe some indifference by the NCPs as to the language they use.

This indifference is also visible in the way in which NCPs treat bodies of norms with different legal status. Across the specific instances, one can see a strong tendency to ‘lump together’ systems and standards with little consideration for their legal authority or the manner in which they apply to a respondent in NCP proceedings. The issue seems to be partly structural. While the Guidelines in their chapter on concepts and principles differentiate between ‘applicable laws’ on the one hand and ‘internationally recognised standards’ on the other,Footnote ¹⁰⁵ thus prima facie recognizing the distinction between law in the strict sense of the word and other bodies of norms, in other parts of the Guidelines the distinction is much more fluid. For example, the chapter on human rights lumps together binding treaties and non-binding declarations without differentiating between them. It is thus unsurprising to see NCPs being indifferent in this regard, such as in Norconsult AS or Vedanta Resources PLC, where the NCPs drew on the non-binding UNDRIP and Akwé Kon Guidelines. This is particularly problematic when the NCP works with a number of bodies of norms with different levels of bindingness. A similar concern is the application of norms which are not addressed to corporations in the first place, but rather to states. Of course, the Guidelines do provide a sort of transpositionary function in this regard, yet it is still surprising to see that NCPs pay very little consideration as to how normative systems developed for application in a state-centric (and thus very different) context can be applied to corporations. Thus, while instances of entanglement between transnational CSR norms and international law may strengthen the coherence of global law through active coordination by the Guidelines, this may also lead to adverse effects as to the integrity and normative force of international law. In this regard, Affolder has drawn attention to how ‘corporate adoption and translation of treaty norms’ may ‘ultimately undermine a treaty’s goals’ as companies ‘cherry-pick among treaty provisions, interpret treaty commitments in their least onerous forms, and obscure the ways in which corporate activities impede treaty implementation by selectively reporting on instances where corporate policies and actions advance treaty norms’.Footnote ¹⁰⁶ From the evidence, it seems that NCPs might be complicit in allowing corporations to do so through a mere lack of diligence within the specific instance procedure.

The laxness in the NCPs’ approach might be partially attributed to the perceived lack of enforceability and compliance with the specific instance procedure.Footnote ¹⁰⁷ As the Guidelines are soft law and the specific instances do not create legal obligations or benefit from formalized enforceability, NCPs can feel induced to be ‘generous’ with the application of bodies of norms to a particular context. However, they would be well advised to exercise caution in this regard as the decisions reached within a specific instance are hardly inconsequential. As Nieuwenkamp highlights, the exercise of pressure by civil society, making diplomatic protection conditional upon compliance, or the consideration of specific instances in decisions on the availability of export credits are only some of the ways in which the Guidelines can have a major impact on corporate behaviour.Footnote ¹⁰⁸ In fact, some elements of the Guidelines are already undergoing a process of ‘hardening’ by being transposed into domestic legislation, such as in the case of the due diligence obligation within the US Dodd–Frank Act which uses the Guidelines’ provisions as a reference point.Footnote ¹⁰⁹

Finally, it is notable what a prominent role has been assumed by straddling practices within NCP proceedings, and in particular the concept of due diligence. In the post-2011 specific instances analysed in this chapter, the due diligence obligation of the respondent has been invoked in the vast majority of cases. In the NCP system, due diligence has outgrown the image of an import from the UNGPs and it is being construed as inherent to the Guidelines. Such blurring of the origins of the norm, coupled with its application in non-human rights-specific contexts, provides attestation to its quality as a straddling practice which distorts the boundaries of individual normative systems. The OECD system doesn’t only apply the due diligence principle, it also develops it further, going as far as producing a number of guiding documents for the carrying out of due diligence.Footnote ¹¹⁰ A similar dynamic can be identified in relation to ESIAs and the concept of FPIC, with the examples of silent entanglement identified showing that the norms are being interpreted as cross-cutting norms and not necessarily ‘belonging’ to a single normative system. Thus, straddling practices are emerging as one of the tools of entanglement within the system of the Guidelines.

12.6 Conclusion

At the outset of this chapter, the inherent pluralism within the regime of CSR regulation of business conduct was noted as a dominant feature. Even though the analysis zoomed in on one particular focal point for entanglement, the OECD Guidelines, multiplicity and variation did not leave the picture. Instead, the system of the Guidelines can be still characterized by a plurality of bodies of norms which are the target of engagement and a plurality of shades of entanglement. Thus, in a sense the OECD Guidelines are reflective of the dynamic which exists in the wider world of CSR normativity. As the section dealing with coordinated legal entanglement has shown, the openness of the Guidelines can be attributed to the structural features of the system which provide the necessary flexibility for the interaction with other bodies of norms. Moreover, the manner in which the UNGPs were integrated into the Guidelines shows that these structural features are not accidental – rather, they represent deliberate decisions to create linkages between CSR systems, arguably motivated by the potential benefits which accrue from cooperation between bodies of norms within the field of CSR.

If the provisions of the Guidelines lay the groundwork for extensive entanglement, the implementation mechanism of NCPs does a very good job in building up the rest of the structure. It is in Section 12.4 where the true scope of entanglement within the system of the Guidelines is demonstrated. Although the dialectic of distancing and proximity is utilized in order to frame the discussion, Section 12.4 illustrates that the identified shades of entanglement are often not easily subsumed within either of the main categories mentioned. This is exacerbated by the fact that entanglement often happens with multiple bodies of norms at once. Overall, NCPs appear to be more likely to engage other bodies of norms in ways which enhance proximity between them, often creating irreverent linkages with both public and private frameworks. While some bodies of norms are relied upon in general contexts, other external norms are used as specialized precision tools when their provisions are closely related to the subject matter of a specific instance. The use of certain norms is characterized by silence as to the normative system in which they originate, underlining their status as straddling practices which can span across multiple bodies of norms. On the distancing end of the spectrum, we saw only limited efforts at drawing borders between systems – instead, efforts at distancing were utilized to hierarchically position the Guidelines against other bodies of norms or as instances of the specialization dynamic. Despite such efforts, however, the picture of CSR which emerges is certainly not of a top-down, integrated system, but rather one which is best defined as a polycentric and multilayered web of bodies of norms.