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Economic sanctions

Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual.[1] Economic sanctions are not necessarily imposed because of economic circumstances—they may also be imposed for a variety of political, military, and social issues. Economic sanctions can be used for achieving domestic and international purposes.[2][3][4]

Economic sanctions generally aim to change the behavior of elites in the target country. However, the efficacy of sanctions is debatable and sanctions can have unintended consequences.[5]

Economic sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions.[6] An embargo is similar, but usually implies a more severe sanction often with a direct air and/or naval blockade.

An embargo (from the Spanish embargo, meaning hindrance, obstruction, etc. in a general sense, a trading ban in trade terminology and literally "distraint" in juridic parlance) is the partial or complete prohibition of commerce and trade with a particular country/state or a group of countries.[7] Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is imposed. Embargoes are generally considered legal barriers to trade, not to be confused with blockades, which are often considered to be acts of war.[8] Embargoes can mean limiting or banning export or import, creating quotas for quantity, imposing special tolls, taxes, banning freight or transport vehicles, freezing or seizing freights, assets, bank accounts, limiting the transport of particular technologies or products (high-tech) for example CoCom during the cold-war.[9] In response to embargoes, a closed economy or autarky often develops in an area subjected to heavy embargo. Effectiveness of embargoes is thus in proportion to the extent and degree of international participation. Embargo can be an opportunity to some countries to develop faster a self-sufficiency. However, Embargo may be necessary in various economic situations of the State forced to impose it, not necessarily therefore in case of war.

Politics of sanctions

Economic sanctions are used as a tool of foreign policy by many governments. Economic sanctions are usually imposed by a larger country upon a smaller country for one of two reasons. —either the latter is a threat to the security of the former nation or that country treats its citizens unfairly. They can be used as a coercive measure for achieving particular policy goals related to trade or for humanitarian violations. (in some cases economic sanctions are imposed to ensure the larger country's resource acquisition schemes, e.g. Venezuelan oil reserves) Economic sanctions are used as an alternative weapon instead of going to war to achieve desired outcomes.

Some policy analysts believe imposing trade restrictions only serves to hurt ordinary people.[10][11]

Effectiveness of economic sanctions

According to the data of Hufbauer et al., regime change, the most frequent foreign-policy objective of economic sanctions, accounts for just over 39 percent of cases of their imposition.[12]

Researchers debate the effectiveness of economic sanctions in their ability to achieve their stated purpose. Hufbauer et al. claimed that in their studies 34 percent of the cases were successful.[13] When Robert A. Pape examined their study, he claimed that only five of their forty so-called "successes" stood up,[14] reducing economic sanctions' success rate to 4% in his analysis. Success of sanctions as a form of measuring effectiveness has also been widely debated by scholars of economic sanctions.[15] Success of a single sanctions-resolution does not automatically lead to effectiveness, unless the stated objective of the sanctions regime is clearly identified and reached.

Imposing sanctions on an opponent also affects the economy of the imposing country to some degree. If import restrictions are promulgated, consumers in the imposing country may have restricted choices of goods. If export restrictions are imposed or if sanctions prohibit companies in the imposing country from trading with the target country, the imposing country may lose markets and investment opportunities to competing countries.[16]

British diplomat Jeremy Greenstock suggests that the reason sanctions are popular is not that they are known to be effective, but "that there is nothing else between words and military action if you want to bring pressure upon a government".[17]

Implications for businesses

Companies must be aware of embargoes that apply to the intended export destination.[18] Embargo check is difficult for both importers and exporters to follow. Before exporting or importing to other countries, firstly, they must be aware of embargoes or risk facing unintended punitive measures for violating sanctions. Subsequently, firms need to make sure that they are not dealing with embargoed countries by checking those related regulations. Finally, they probably need a license in order to ensure a smooth export or import business.[citation needed] Sometimes the situation becomes even more complicated with the changing of politics of a country.[example needed]

Embargoes keep changing. In the past,[when?] many companies relied on spreadsheets and manual process to keep track of compliance issues related to incoming and outgoing shipments, which takes risks of these days help companies to be fully compliant on such regulations even if they are changing on a regular basis. If an embargo situation exists, the software blocks the transaction for further processing.[example needed][citation needed]

Examples

An undersupplied U.S. gasoline station, closed during the oil embargo in 1973

The United States Embargo of 1807 involved a series of laws passed by the U.S. Congress (1806–1808) during the second term of President Thomas Jefferson.[19] Britain and France were engaged in a major war; the U.S. wanted to remain neutral and to trade with both sides, but neither side wanted the other to import American supplies.[20] American policy aimed to use the new laws to avoid war and to force both France and Britain to respect American rights.[21] The embargo failed to achieve its aims, and Jefferson repealed the embargo legislation in March 1809.

One of the most comprehensive attempts at an embargo occurred during the Napoleonic Wars of 1803-1815. Aiming to cripple the United Kingdom economically, Emperor Napoleon I of France in 1806 promulgated the Continental System – which forbade European nations from trading with the UK. In practice the French Empire could not completely enforce the embargo, which proved as harmful (if not more so) to the continental nations involved as to the British.[22]

The United States, Britain, China and the Netherlands imposed sanctions against Japan in 1940-1941. Deprived of access to vital oil, iron-ore and steel supplies, Japan started planning for military action to seize the resource-rich Dutch East Indies - and to enable this by pre-emptively destroying the US fleet at Pearl Harbor.[23]

The United States imposed an embargo on Cuba on March 14, 1958, during the Fulgencio Batista regime. At first the embargo applied only to arms sales, however it later expanded to include other imports, extending to almost all trade on February 7, 1962.[24] Referred to by Cuba as "el bloqueo" (the blockade),[25] the U.S. embargo on Cuba remains as of 2018 one of the longest-standing embargoes.[26] Few of the United States' allies embraced the embargo, and it apparently has done little to affect Cuban policies over the years.[27] Nonetheless, while taking some steps to allow limited economic exchanges with Cuba, American President Barack Obama reaffirmed the policy in 2011, stating that without the granting of improved human rights and freedoms by Cuba's current government, the embargo remains "in the national interest of the United States".[28]

In 1973–1974 Arab nations imposed an oil embargo against the United States and other industrialized nations which supported Israel in the Yom Kippur War of October 1973. The results included a sharp rise in oil prices and in OPEC revenues, an emergency period of energy rationing, a global economic recession, large-scale conservation efforts, and long-lasting shifts toward natural gas, ethanol, nuclear and other alternative energy sources.[29][30] Israel continued to receive Western support.

In effort to punish South Africa for its policies of apartheid, the United Nations General Assembly adopted a voluntary international oil-embargo against South Africa on November 20, 1987; that embargo had the support of 130 countries.[31]

Current sanctions

By targeted country

List of sanctioned countries:

By targeted individuals

By sanctioning country

By targeted activity

  • In response to cyber-attacks on April 1, 2015 President Obama issued an Executive Order establishing the first-ever economic sanctions. The Executive Order was intended to impact individuals and entities (“designees”) responsible for cyber-attacks that threaten the national security, foreign policy, economic health, or financial stability of the US. Specifically, the Executive Order authorized the Treasury Department to freeze designees’ assets.[58]
  • In response to intelligence analysis alleging Russian hacking and interference with the 2016 U.S. elections, President Obama expanded presidential authority to sanction in response to cyber activity that threatens democratic elections.[59] Given that the original order was intended to protect critical infrastructure, it can be argued that the election process should have been included in the original order. It can be further argued that democratic elections are our most critical infrastructure.

Bilateral trade disputes

  • Vietnam as a result of capitalist influences over the 1990s and having imposed sanctions against Cambodia, is accepting of sanctions disposed with accountability.[clarification needed]
  • In March 2010, Brazil introduced sanctions against the US. These sanctions were placed because the US government was paying cotton farmers for their products against World Trade Organization rules. The sanctions cover cotton, as well as cars, chewing gum, fruit, and vegetable products.[60] The WTO is currently supervising talks between the states to remove the sanctions.[citation needed]

Former sanctions

See also

References

  1. ^ Financial Weapons of War, Minnesota Law Review (2016), available at: [ssrn.com]
  2. ^ [1][dead link]
  3. ^ "Playing to the Home Crowd? Symbolic Use of Economic Sanctions in ..." Ingentaconnect.com. 2011-09-01. Retrieved 2015-03-30.
  4. ^ [2] Archived August 7, 2011, at the Wayback Machine
  5. ^ "Lee, Yong Suk, 2018. "International isolation and regional inequality: Evidence from sanctions on North Korea," Journal of Urban Economics".
  6. ^ Haidar, J.I., 2015."Sanctions and Exports Deflection: Evidence from Iran," Paris School of Economics, University of Paris 1 Pantheon Sorbonne, Mimeo
  7. ^ University of California, Irvine (April 8, 2013). "Trade Embargoes Summary". darwin.bio.uci.edu.
  8. ^ "Blockade as Act of War". Crimes of War Project. Archived from the original on 2012-06-18. Retrieved 2012-07-01.
  9. ^ Palánkai, Tibor. "Investor-partner Business dictionary".
  10. ^ [3] Archived February 27, 2014, at the Wayback Machine
  11. ^ Hans Köchler (ed.), Economic Sanctions and Development. Vienna: International Progress Organization, 1997. ISBN 3-900704-17-1
  12. ^ Hufbauer, Gary Clyde; Schott, Jeffrey J.; Elliott, Kimberly Ann; Oegg, Barbara (2008). Economic Sanctions Reconsidered (3 ed.). Washington, DC: Columbia University Press. p. 67. ISBN 9780881324822. Retrieved 2018-05-10. By far, regime change is the most frequent foreign policy objective of economic sanctions, accounting for 80 out of the 204 observations.
  13. ^ Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. p. 159
  14. ^ Pape, Robert A (Summer 1998). "Why Economic Sanctions Still Do Not Work". International Security. 23 (1): 66–77. doi:10.2307/2539263. JSTOR 2539263. I examined the 40 claimed successes and found that only 5 stand up. Eighteen were actually settled by either direct or indirect use of force; in 8 cases there is no evidence that the target state made the demanded concessions; 6 do not qualify as instances of economic sanctions, and 3 are indeterminate. If I am right, then sanctions have succeeded in only 5 of 115 attempts, and thus there is no sound basis for even qualified optimism about the effects of sanctions.
  15. ^ A Strategic Understanding of UN Economic Sanctions: International Relations, Law, and Development, Golnoosh Hakimdavar, p. 105
  16. ^ Griswold, Daniel (2000-11-27). "Going Alone on Economic Sanctions Hurts U.S. More than Foes". Cato.org. Retrieved 2015-03-30.
  17. ^ Marcus, Jonathan. "Analysis: Do economic sanctions work?". Bbc.co.uk. Retrieved 2015-03-30.
  18. ^ "Do I need an export licence?". gov.uk. 3 August 2012. Retrieved 2 January 2016.
  19. ^ University of Houston (2013). "The Embargo of 1807". digitalhistory.uh.edu.
  20. ^ Aaron Snyder; Jeffrey Herbener (December 15, 2004). "The Embargo of 1807 Grove City College Grove City, Pennsylvania" (PDF). gcc.edu. Grove City College. Archived from the original (PDF) on 2013-05-17.
  21. ^ "Embargo of 1807". monticello.org. April 8, 2013.
  22. ^ "Continental System Napoleon British Embargo Napoleon's 1812". Archived from the original on 2011-07-10.
  23. ^ "Pearl Harbor Raid, 7 December 1941". Washington: Department of the Navy -- Naval Historical Center. 3 December 2000. Retrieved 20 July 2019. The 7 December 1941 Japanese raid on Pearl Harbor was one of the great defining moments in history. A single carefully-planned and well-executed stroke removed the United States Navy's battleship force as a possible threat to the Japanese Empire's southward expansion. [...] The Japanese military, deeply engaged in the seemingly endless war it had started against China in mid-1937, badly needed oil and other raw materials. Commercial access to these was gradually curtailed as the conquests continued. In July 1941 the Western powers effectively halted trade with Japan. From then on, as the desperate Japanese schemed to seize the oil and mineral-rich East Indies and Southeast Asia, a Pacific war was virtually inevitable.
  24. ^ National Archives and Records Administration. "Proclamation 3447--Embargo on all trade with Cuba". archives.gov.
  25. ^ Elizabeth Flock (February 7, 2012). "Cuba trade embargo turns 50: Still no rum or cigars, though some freedom in travel". washingtonpost.com.
  26. ^ Eric Weiner (October 15, 2007). "Officially Sanctioned: A Guide to the U.S. Blacklist". npr.org.
  27. ^ Daniel Hanson; Dayne Batten; Harrison Ealey (January 16, 2013). "It's Time For The U.S. To End Its Senseless Embargo Of Cuba". forbes.com.
  28. ^ Uri Friedman (September 13, 2011). "Obama Quietly Renews U.S. Embargo on Cuba". The Atlantic.
  29. ^ Maugeri, Leonardo (2006). The Age of Oil. Greenwood Publishing Group. pp. 112–116. ISBN 9780275990084.
  30. ^ "Energy Crisis (1970s)". The History Channel. 2010.
  31. ^ "Oil Embargo against Apartheid South Africa on richardknight.com".
  32. ^ Howse, Robert L. and Genser, Jared M. (2008) "Are EU Trade Sanctions on Burma Compatible with WTO Law?" Archived June 7, 2010, at the Wayback Machine Michigan Journal of International Law 29(2): pp. 165–96
  33. ^ Leo Cendrowicz (February 10, 2010). "Should Europe Lift Its Arms Embargo on China?". Time.
  34. ^ "Russia announces 'full embargo' on most food from US, EU". Deutsche Welle. 7 August 2014.
  35. ^ "Russia expands food imports embargo to non-EU states". English Radio. 13 August 2015. Retrieved 10 November 2015.[permanent dead link]
  36. ^ "Russia expands food import ban". BBC News. 2015-08-13. Retrieved 2018-06-17.
  37. ^ "Australia bans all live cattle exports to Indonesia". BBC News. 8 June 2011. Retrieved 2 January 2016.
  38. ^ United States Department of the Treasury. "What You Need To Know About U.S. Economic Sanctions" (PDF). treasury.gov.
  39. ^ Josh Levs (January 23, 2012). "A summary of sanctions against Iran". cnn.com.
  40. ^ Wroughton, Lesley (22 April 2019). "U.S. to end all waivers on imports of Iranian oil, crude price jumps". Reuters.
  41. ^ "Iran oil: US to end sanctions exemptions for major importers". BBC News. 22 April 2019.
  42. ^ "Clinton Ends Most N. Korea Sanctions". Globalpolicy.org. 1999-09-18. Retrieved 2015-03-30.
  43. ^ [4] Archived July 23, 2010, at the Wayback Machine
  44. ^ "Democratic People's Republic of Korea (North Korea)". Department for Business Innovation and Skills. Archived from the original on 9 June 2009. Retrieved 8 March 2016.
  45. ^ "Senate overwhelmingly passes new Russia and Iran sanctions". The Washington Post. 15 June 2017.
  46. ^ Editorial, Reuters (2 August 2017). "Iran says new U.S. sanctions violate nuclear deal, vows 'proportional reaction'".
  47. ^ "Syria sanctions". BBC News. 27 November 2011.
  48. ^ Rhodan, Maya (9 March 2015). "White House sanctions seven officials in Venezuela". Time. Retrieved 2 April 2019.
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  50. ^ "President Trump Approves New Sanctions On Venezuela".
  51. ^ Emmott, Robin. "EU readies sanctions on Venezuela, approves arms embargo".
  52. ^ "Canada imposes sanctions on key Venezuelan officials". CBC Canada. Thomson Reuters. 22 September 2017. Retrieved 3 April 2019.
  53. ^ Zilio, Michelle (22 September 2017). "Canada sanctions 40 Venezuelans with links to political, economic crisis". The Globe and Mail. Retrieved 3 April 2019. Also at Punto de Corte and El Nacional
  54. ^ "Canada to impose sanctions on more Venezuelan officials". VOA News. Reuters. 30 May 2018. Retrieved 4 April 2019.
  55. ^ "México rechaza elecciones en Venezuela y sanciona a siete funcionarios". Sumarium group (in Spanish). Retrieved 21 April 2018.[permanent dead link] Also at VPITV
  56. ^ Camacho, Carlos (27 March 2018). "Panama sanctions Venezuela, including Maduro & 1st Lady family companies". Latin American Herald Tribune. Retrieved 3 April 2019.
  57. ^ "Swiss impose sanctions on seven senior Venezuelan officials". Reuters. 28 March 2018. Retrieved 3 April 2019. Also at Diario Las Americas
  58. ^ "Sanctions: U.S. action on cyber crime" (PDF). [www.pwc.com]. PwC Financial Services Regulatory Practice, April, 2015. External link in |website= (help)
  59. ^ Bennett, Cory (29 March 2016). "Obama extends cyber sanctions power".
  60. ^ "Brazil slaps trade sanctions on U.S. to retaliate for subsidies to cotton farmers". Content.usatoday.com. 2010-03-09. Retrieved 2015-03-30.
  61. ^ Cockburn, Patrick (February 4, 1994). "US finally ends Vietnam embargo". The Independent. London.
  62. ^ a b Pakistan and India UK nuclear exports restrictions Archived 2010-02-18 at the Wayback Machine
  63. ^ Lydia Polgreen (April 2, 2012). "Mali Coup Leaders Suffer Sanctions and Loss of Timbuktu". nytimes.com.
  64. ^ "Kosovo imposes embargo on Serbia". The Sofia Echo. 21 July 2011. Retrieved 2 January 2016.
  65. ^ "Georgia Doubles Wine Exports as Russian Market Reopens". RIA Novosti. 16 December 2013.

External links