US: The United States has built significant leverage through the global financial system, particularly because the U.S. dollar remains central to international trade and banking.
How Washington’s sanctions and financial power affect foreign governments, companies and banks and why Africa should pay attention
The growing use of U.S. sanctions and financial regulations has raised a broader international question: how far should one country’s laws extend when the companies, banks or governments involved are based outside its territory?
The United States has built significant leverage through the global financial system, particularly because the U.S. dollar remains central to international trade and banking. This means that a transaction between two non-U.S. parties can sometimes create exposure to U.S. sanctions if it involves the American financial system or falls within U.S. sanctions rules.
Legal scholars have described this as a form of extraterritorial influence, while also noting that the international-law basis for some forms of U.S. secondary sanctions remains contested.
Venezuela provides a clear example. Washington maintains an extensive sanctions regime covering Venezuelan government entities, officials and parts of the country’s oil, mining and financial sectors. At the same time, the U.S. Treasury has repeatedly adjusted its rules and issued licences allowing certain transactions involving Venezuelan oil, minerals, financial services and other activities.
For companies outside the United States, this creates a complicated commercial environment. A foreign company considering business with a Venezuelan entity may have to examine not only the laws of its own country, but also whether the transaction could expose it to restrictions affecting access to the U.S. financial system.
Washington argues that sanctions are tools for protecting national security and responding to governments and individuals it considers responsible for repression, corruption, weapons proliferation or other threats. Critics, however, argue that using the power of the dollar to pressure third-country businesses effectively exports U.S. foreign policy into other jurisdictions.
The case involving Chinese technology giant Huawei illustrates another dimension.
In July 2025, a U.S. federal judge ruled that most criminal charges against Huawei could proceed. The indictment includes allegations involving racketeering, theft of trade secrets and bank fraud. Prosecutors also alleged that Huawei conducted business involving Iran through a Hong Kong-based company and that more than $100 million moved through the U.S. financial system. Huawei pleaded not guilty and has denied wrongdoing.
The case demonstrates how a company headquartered outside the United States can still become subject to U.S. criminal proceedings when American prosecutors establish a connection with U.S. law or infrastructure.
One of the most striking examples came in 2014, when French bank BNP Paribas pleaded guilty to violating U.S. sanctions after processing more than $8.8 billion through the U.S. financial system on behalf of sanctioned entities connected to Sudan, Iran and Cuba.
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The bank ultimately faced total financial penalties of about $8.97 billion.
The case demonstrated the extraordinary leverage Washington can exercise through dollar clearing. A bank does not have to be headquartered in America to face enormous consequences from U.S. sanctions enforcement.
For African countries, this issue goes beyond Washington and its geopolitical rivals. It concerns economic sovereignty.
African banks, governments and companies increasingly participate in global trade involving energy, minerals, agriculture, telecommunications and infrastructure. Many of those transactions depend on international banking networks and major currencies.
Research has already highlighted how currency-based sanctions can disrupt African trade. One Brookings analysis estimated that sanctions affecting dollar- and euro-denominated transactions with Russia had the potential to disrupt 1.8% of total African trade, with some countries facing exposure above 5%.
This creates a strategic challenge for Africa. The continent needs to comply with applicable international and domestic laws, but it also has an interest in developing stronger African financial institutions, regional payment systems, diversified trade relationships and greater capacity to conduct transactions within Africa.
The issue is therefore not simply whether U.S. sanctions are legitimate in particular cases. It is whether the concentration of financial and technological power in a small number of global systems gives individual states disproportionate influence over economic decisions made elsewhere.
For Africa, the long-term lesson is clear: economic independence requires more than political independence. It also requires the ability to move money, conduct trade and build technology without excessive vulnerability to decisions made in another capital.
As global competition over resources, technology and financial influence intensifies, Africa’s ability to diversify its economic infrastructure could become an increasingly important part of protecting its policy space and commercial interests.
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