U.S. sanctions an important tool, not to be used 'frivolously': Treasury's Lew

WASHINGTON (Reuters) - Economic sanctions are a powerful policy weapon but should not be wielded “frivolously,” U.S. Treasury Secretary Jack Lew said in an interview to be aired on Tuesday.

Treasury Secretary Jack Lew testifies at a Senate Appropriations Subcommittee hearing on the FY2017 budget for the Treasury Department on Capitol Hill in Washington March 8, 2016. REUTERS/Joshua Roberts

Sanctions - blacklisting individuals and organizations, effectively barring them from the global financial system - have become a favored tool for the United States. It has used them against challenges as varied as drug trafficking, cyber attacks and jihadist financing.

But the impact has to be weighed as carefully as those of military force, Lew said in an interview with Public Television host Charlie Rose, according to a transcript of the interview released on Tuesday.

“We can’t shy away from using sanctions because it will slow down growth, but we can’t do it frivolously either,” Lew said. “It’s a serious step, and it’s something that has to be guarded in order to have it in the future when you need it.”

U.S. sanctions have evolved over time from broad embargoes - such as the one imposed for decades on Cuba - to more targeted actions, he said, citing measures imposed on specific Russian industries in response to Russia’s intervention in Ukraine.

“They’re targeted at the centers of power, where the decisions are being made,” Lew said.

The United States also should reward countries that change their behavior by removing sanctions, Lew said, pointing to measures against Iran that he credited with leading Tehran to agree to curb its nuclear program.

Iran reached a deal with the United States and other world powers last July, winning relief from the harshest sanctions in return for limiting its nuclear program, which the West feared was aimed at building a weapon.

“When you have an agreement that’s predicated on ‘Change your policy and get relief from the sanctions,’ there has to be relief from the sanctions,” Lew said. “Otherwise, no one will ever respond to a sanctions regime by changing their policy.”

Reversing the Iran nuclear deal under a new administration - as Republican presidential candidate and U.S. Senator Ted Cruz has pledged to do - would be “destabilizing and dangerous,” Lew said.

A broad economic embargo remains in place against Cuba, although President Barack Obama has used executive authority to allow commerce not specifically banned by Congress, as Washington and Havana move closer toward normal relations.

Those improved ties are “going to be a force for change” in Cuba, Lew said. “We weren’t getting it done the old way.”

Reporting by Yeganeh Torbati; Editing by Dan Grebler