Category Component Description Example Economic sanctionsFinancial sanctions Freezing assets, restricting access to financial markets, prohibiting and blocking transactionsFreezing assets of military officials for human rights abuses Travel bans Denying visas or entry to individuals Banning visas for officials linked to corruption Sectoral sanctions Sanctions targeting specific sectors Sanctioning the energy sector for environmental violations Secondary sanctionsPenalties on third parties engaging with sanctioned entitiesThreatening sanctions on firms trading with a sanctioned nation Trade policiesTariffs Taxes on imported goods to protect domestic industriesImposing tariffs on imported steel to protect local industry Quotas Limits on the quantity of specific goods imported/exportedSetting quotas for dairy imports to support local farmers Trade agreements Bilateral/multilateral agreements to reduce trade barriersNegotiating a trade deal for economic cooperation Anti-dumping measuresPolicies to prevent below market-value sales by foreign companiesEnforcing duties on textiles sold below market value Subsidies Financial support for domestic industries Allocating subsidies for renewable energy projects Investment controlsScreening mechanismsReview processes for foreign investments based on security and stabilityConducting security reviews of foreign investments Ownership restrictionsLimits on foreign ownership in certain industries Restricting foreign ownership in telecommunications Sectoral restrictions Prohibitions on foreign investment in critical sectors Banning foreign investment in defence for security reasons Performance requirementsConditions for foreign investors (e.g. technology transfer)Requiring local partnerships for foreign tech firms Export controlsLicensing requirementsGovernment approval needed for certain exports Mandating licences for sensitive technology exports Prohibited destinationsBans on exporting to specific countries/regions Prohibiting exports to nations under sanctions Controlled technologiesRestrictions on advanced technology exports Limiting dual-use technology exports to prevent military use End-use monitoring Ensuring that exported goods are used as intended Checking military equipment for compliance with agreements Aid and assistanceDevelopment aid Financial support for economic development and infrastructureProviding aid for infrastructure in low-income countries Humanitarian aid Emergency assistance for crises Delivering aid to communities affected by disasters Technical assistanceExpertise and training for governance and capacity-buildingOffering training to improve public health systems Military aid Support for defence, including funding and training Providing military training and equipment to allies facing threatsTABLE 1 Economic statecraft – a deep dive Source: Oliver Wyman analysis Economic statecraft can drive fragmentation by directly disrupting the operation of the financial system. For instance, in response to the September 11 attacks, the US government systematically used the global financial system to track and disrupt terrorist financing. The effort to combat terrorist financing was recognized by the international community and became institutionalized via the intergovernmental Financial Action Task Force (FATF). The United States developed sophisticated capabilities to monitor and control international financial flows, which it continued to leverage over the next two decades.15 The dollar’s centrality as a reserve currency gave US policy-makers leverage to advance foreign policy goals through economic tools such as sanctions. Navigating Global Financial System Fragmentation 13

Navigating Global Financial System Fragmentation 2025