Why Some Sanction Enforcement Actions Attract or Fail to Attract Media Attention

• In Event: Effectiveness of Economic Sanctions

Abstract

When firms get punished for violating economic sanctions, what explains how much attention the media gives to those events? While sanctions enforcement actions taken by the U.S. Office of Foreign Assets Control (OFAC) can result in major financial penalties, firms may experience significant reputational harm from them as well. While some OFAC enforcement actions have resulted in major news stories, like the penalties imposed against HSBC and Berkshire Hathaway, other infractions announced by OFAC attract little interest. We explore a series of hypotheses about the nature of the penalized firms, their violations, and the OFAC penalties imposes affect the level of public attention sanctions enforcement actions generate. We test our analyses via two methods: a quantitative analysis of the number of media mentions generated by OFAC enforcement actions and an experimental survey exploring what factors make individuals more likely to read media involving sanctions penalties. Our results should help better explain the consequences that sanctions enforcement actions have and what factors influence firms’ compliance with sanctions.

Authors

• Bryan Robert Early, University at Albany, SUNY

• Timothy Peterson, University of South Carolina

• Keith A Preble, Miami University