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Economic sanctions

  (Redirected from Embargo)

Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted country, group, or individual.[1] Economic sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions.[2] An embargo is similar, but usually implies a more severe sanction. 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.[3][4][5]

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 or a group of countries.[6] 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.[7]

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.[8]

In response to embargoes, an independent 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.

Contents

Politics of sanctionsEdit

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. 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.[9][10]

Effectiveness of economic sanctionsEdit

Regime change is the most frequent foreign policy objective of economic sanctions.[11] There is controversy over the effectiveness of economic sanctions in their ability to achieve the stated purpose. Haufbauer et al. claimed that in their studies 34 percent of the cases were successful [12] When Robert A. Pape reexamined their study, he claimed that only five of their forty so-called "successes" stood out, dropping their success rate to 4%.[13] Success of sanctions as a form of measuring effectiveness has also been widely debated by scholars of economic sanctions.[14] 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.

It also affects the economy of the imposing country to some degree. If import restrictions were made, the consumers in the imposing country would have fewer choices of goods. If export restrictions were made or sanction prohibited businesses in the imposing country from doing business with the target country, the imposing country could lose markets and investment opportunities to competing countries.[15]

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".[16]

Implications for businessesEdit

Companies must be aware of embargoes that apply to the intended export destination.[17] 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. Subsequently, they need to make sure that they are not dealing with embargoed countries by checking those related regulations, and finally they probably need a license in order to ensure a smooth export or import business. Sometimes the situation becomes even more complicated with the changing of politics of a country. Embargoes keep changing. In the past, 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.

ExamplesEdit

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

The Embargo of 1807 was a series of laws passed by the U.S. Congress 1806–1808, during the second term of President Thomas Jefferson.[18] Britain and France were engaged in a major war; the U.S. wanted to remain neutral and trade with both sides, but neither side wanted the other to have the American supplies.[19] The American national-interest goal was to use the new laws to avoid war and force that country to respect American rights.[20]

One of the most comprehensive attempts at an embargo happened during the Napoleonic Wars. In an attempt to cripple the United Kingdom economically, the Continental System – which forbade European nations from trading with the UK – was created. In practice it was not completely enforceable and was as harmful if not more so to the nations involved than to the British.[21]

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 was later expanded to include other imports, being extended to almost all imports on February 7, 1962.[22] Referred to by Cuba as "el bloqueo" (the blockade),[23] the U.S. embargo on Cuba remains one of the longest-standing embargoes.[24] The embargo was embraced by few of the United States' allies and apparently has done little to affect Cuban policies over the years.[25] Nonetheless, while taking some steps to allow limited economic exchanges with Cuba, President Barack Obama reaffirmed the policy, stating that without improved human rights and freedoms by Cuba's current government, the embargo remains "in the national interest of the United States."[26]

In 1973–1974, Arab nations imposed an oil embargo against the United States and other industrialized nations that supported Israel in the Yom Kippur War. The results included a sharp rise in oil prices and 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.[27][28]

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.[29]

Current sanctions [30]Edit

By targeted countryEdit

By targeted individualsEdit

By sanctioning countryEdit

By targeted activityEdit

  • In response to recent cyber-attacks on April 1, 2015 President Obama issued an Executive Order establishing the first-ever economic sanctions. The Executive Order will 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 authorizes the Treasury Department to freeze designees’ assets.[42]
  • 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.[43] 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 disputesEdit

  • Vietnam as a result of capitalist influences over the 1990s and having imposed sanctions against Cambodia, is accepting of sanctions diposed 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.[44] The WTO is currently supervising talks between the states to remove the sanctions.

Former sanctionsEdit

See alsoEdit

ReferencesEdit

  1. ^ Financial Weapons of War, Minnesota Law Review (2016), available at: http://ssrn.com/abstract=2765010
  2. ^ Haidar, J.I., 2015."Sanctions and Exports Deflection: Evidence from Iran," Paris School of Economics, University of Paris 1 Pantheon Sorbonne, Mimeo
  3. ^ [1][dead link]
  4. ^ "Playing to the Home Crowd? Symbolic Use of Economic Sanctions in .." Ingentaconnect.com. 2011-09-01. Retrieved 2015-03-30. 
  5. ^ [2] Archived August 7, 2011, at the Wayback Machine.
  6. ^ University of California, Irvine (April 8, 2013). "Trade Embargoes Summary". darwin.bio.uci.edu. 
  7. ^ "Blockade as Act of War". Crimes of War Project. Archived from the original on 2012-06-18. Retrieved 2012-07-01. 
  8. ^ Palánkai, Tibor. "Investor-partner Business dictionary". 
  9. ^ [3] Archived February 27, 2014, at the Wayback Machine.
  10. ^ Hans Köchler (ed.), Economic Sanctions and Development. Vienna: International Progress Organization, 1997. ISBN 3-900704-17-1
  11. ^ Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. p. 67
  12. ^ Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. p. 159
  13. ^ Why economic sanctions still do not work. Robert A. Pape, p. 66
  14. ^ A Strategic Understanding of UN Economic Sanctions: International Relations, Law, and Development, Golnoosh Hakimdavar, p. 105
  15. ^ Griswold, Daniel (2000-11-27). "Going Alone on Economic Sanctions Hurts U.S. More than Foes". Cato.org. Retrieved 2015-03-30. 
  16. ^ Marcus, Jonathan. "Analysis: Do economic sanctions work?". Bbc.co.uk. Retrieved 2015-03-30. 
  17. ^ "Do I need an export licence?". www.gov.uk. 3 August 2012. Retrieved 2 January 2016. 
  18. ^ University of Houston (2013). "The Embargo of 1807". digitalhistory.uh.edu. 
  19. ^ 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. 
  20. ^ "Embargo of 1807". monticello.org. April 8, 2013. 
  21. ^ "Continental System Napoleon British Embargo Napoleon's 1812". Archived from the original on 2011-07-10. 
  22. ^ National Archives and Records Administration. "Proclamation 3447--Embargo on all trade with Cuba". archives.gov. 
  23. ^ Elizabeth Flock (February 7, 2012). "Cuba trade embargo turns 50: Still no rum or cigars, though some freedom in travel". washingtonpost.com. 
  24. ^ Eric Weiner (October 15, 2007). "Officially Sanctioned: A Guide to the U.S. Blacklist". npr.org. 
  25. ^ 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. 
  26. ^ Uri Friedman. "Obama Quietly Renews U.S. Embargo on Cuba". The Atlantic. 
  27. ^ Maugeri, Leonardo (2006). The Age of Oil. Greenwood Publishing Group. pp. 112–116. 
  28. ^ "Energy Crisis (1970s)". The History Channel. 2010. 
  29. ^ "Oil Embargo against Apartheid South Africa on richardknight.com". 
  30. ^ http://www.bscn.nl/nl/sanctions-consulting/sanctions-list-countries
  31. ^ 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
  32. ^ Leo Cendrowicz (February 10, 2010). "Should Europe Lift Its Arms Embargo on China?". Time. 
  33. ^ "Russia announces 'full embargo' on most food from US, EU". Deutsche Welle. 7 August 2014. 
  34. ^ "Russia expands food imports embargo to non-EU states". English Radio. 13 August 2015. Retrieved 10 November 2015. 
  35. ^ "Australia bans all live cattle exports to Indonesia". BBC News. 8 June 2011. Retrieved 2 January 2016. 
  36. ^ United States Department of the Treasury. "What You Need To Know About U.S. Economic Sanctions" (PDF). treasury.gov. 
  37. ^ Josh Levs (January 23, 2012). "A summary of sanctions against Iran". cnn.com. 
  38. ^ "Clinton Ends Most N. Korea Sanctions". Globalpolicy.org. 1999-09-18. Retrieved 2015-03-30. 
  39. ^ [4] Archived July 23, 2010, at the Wayback Machine.
  40. ^ "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. 
  41. ^ "Syria sanctions". BBC News. 27 November 2011. 
  42. ^ "Sanctions: U.S. action on cyber crime" (PDF). http://www.pwc.com/us/en/financial-services/regulatory-services/publications/sanctions-cyber-crime.jhtml. PwC Financial Services Regulatory Practice, April, 2015.  External link in |website= (help)
  43. ^ http://thehill.com/policy/cybersecurity/274594-obama-extends-cyber-sanctions-powers
  44. ^ "Brazil slaps trade sanctions on U.S. to retaliate for subsidies to cotton farmers". Content.usatoday.com. 2010-03-09. Retrieved 2015-03-30. 
  45. ^ Cockburn, Patrick (February 4, 1994). "US finally ends Vietnam embargo". The Independent. London. 
  46. ^ a b Pakistan and India UK nuclear exports restrictions Archived 2010-02-18 at the Wayback Machine.
  47. ^ Lydia Polgreen (April 2, 2012). "Mali Coup Leaders Suffer Sanctions and Loss of Timbuktu". nytimes.com. 
  48. ^ "Kosovo imposes embargo on Serbia". The Sofia Echo. 21 July 2011. Retrieved 2 January 2016. 
  49. ^ "Georgia Doubles Wine Exports as Russian Market Reopens". RIA Novosti. 16 December 2013. 

External linksEdit