Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions. An embargo is similar, but usually implies a more severe sanction. 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. 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.
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. 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.
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.
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.
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. (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.
Effectiveness of economic sanctionsEdit
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. When Robert A. Pape examined their study, he claimed that only five of their forty so-called "successes" stood up, 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. 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.
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".
Implications for businessesEdit
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Companies must be aware of embargoes that apply to the intended export destination. 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. 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]
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. 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. American policy aimed to use the new laws to avoid war and to force both France and Britain to respect American rights. 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. In an attempt to cripple the United Kingdom economically, Napoleon 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.
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. Referred to by Cuba as "el bloqueo" (the blockade), the U.S. embargo on Cuba remains as of 2018[update] one of the longest-standing embargoes. Few of the United States' allies embraced the embargo, and it apparently has done little to affect Cuban policies over the years. Nonetheless, while taking some steps to allow limited economic exchanges with Cuba, 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".
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. 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.
By targeted countryEdit
- Burma – the European Union's sanctions against Burma (Myanmar), based on lack of democracy and human rights infringements.
- China (by EU and US), arms embargo, enacted in response to the Tiananmen Square protests of 1989.
- Cuba (United States embargo against Cuba), arms, consumer goods, money, enacted 1958.
- EU, US, Australia, Canada and Norway (by Russia) since August 2014, beef, pork, fruit and vegetable produce, poultry, fish, cheese, milk and dairy. On August 13, 2015, the embargo was expanded to Albania, Montenegro, Iceland, and Liechtenstein.
- Gaza Strip by Israel since 2001, under arms blockade since 2007 due to the large number of illicit arms traffic used to wage war, (occupied officially from 1967 to 2005).
- Indonesia (by Australia), live cattle because of cruel slaughter methods in Indonesia.
- Iran: by US and its allies, notably bar nuclear, missile and many military exports to Iran and target investments in: oil, gas and petrochemicals, exports of refined petroleum products, banks, insurance, financial institutions, and shipping. Enacted 1979, increased through the following years and reached its tightest point in 2010.
- Japan,[who?] animal shipments due to lack of infrastructure and radiation issue after the 2011 Tohoku earthquake aftermath.
- North Korea
- international sanctions imposed on North Korea since the Korean War of 1950–1953 eased under the Sunshine Policy of South Korean President Kim Dae Jung and of U.S. President Bill Clinton. but tightened again in 2010.
- by UN, USA, EU, luxury goods (and arms), enacted 2006.
- United Nations Security Council Resolution 1718 (2006) – a reaction to the DPRK's claim of a nuclear test.
- Qatar by surrounding countries including Saudi Arabia, United Arab Emirates, Bahrain, and Egypt.
- Sudan by US since 1997.
- Syria (by EU, US), arms and imports of oil.
- Taiwan, enacted in response to United Nations General Assembly Resolution 2758 and weapons of mass destruction program.
- Turkish Republic of Northern Cyprus, (by UN), consumer goods, enacted 1975.
- Venezuela,(by EU, US), since 2017, arms embargo and selling of assets banned due to alleged human rights violations, alleged high government corruption, alleged links with drug cartels and alleged electoral rigging in the 2018 Venezuelan presidential elections.
By targeted individualsEdit
- List of individuals sanctioned during the 2013–15 Ukrainian crisis
- There is a United Nations sanction imposed by UN Security Council Resolution 1267 in 1999 against all Al-Qaida- and Taliban-associated individuals. The cornerstone of the sanction is a consolidated list of persons maintained by the Security Council. All nations are obliged to freeze bank accounts and other financial instruments controlled by or used for the benefit of anyone on the list.
By sanctioning countryEdit
- United States embargoes
- The 2002 United States steel tariff was placed by the United States on steel to protect its industry from foreign producers such as China and Russia. The World Trade Organization ruled that the tariffs were illegal. The European Union threatened retaliatory tariffs on a range of US goods that would mainly affect swing states. The US government then removed the steel tariffs in early 2004.
By targeted activityEdit
- 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.
- 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. 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 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. The WTO is currently supervising talks between the states to remove the sanctions.
- 2006–07 economic sanctions against the Palestinian National Authority
- Sanctions against Iraq (1990–2003)
- Disinvestment from South Africa
- ABCD line, Japan pre-WWII
- Federal Republic of Yugoslavia (by UN).
- North Vietnam (1964–1975) and later Vietnam (1975–1994), trade embargo by the US.
- Republic of Macedonia (by Greece), complete trade embargo (1994-1995).
- Libya (by United Nations), weapons, enacted 2011 after mass killings of Libyan protesters/rebels and ended later that year after the overthrow and summary execution of Gaddafi.
- India (by UK), nuclear exports restriction.
- Mali (by ECOWAS) total embargo in order to force Juntas to give power back and re-install National constitution. Decided on April 2, 2012.
- Pakistan (by UK), nuclear exports restriction, enacted 2002.
- Serbia by Kosovo's unilaterally declared government, since 2011.
- Embargo Act of 1807.
- Former Yugoslavia Embargo November 21, 1995 Dayton Peace Accord.
- Georgia (by Russia), agricultural products, wine, mineral water, enacted 2006, lifted 2013.
- United States embargo against Nicaragua.
- Italy by League of Nations (October 1935) after the Italian invasion of Abyssinia.
- Financial Weapons of War, Minnesota Law Review (2016), available at: http://ssrn.com/abstract=2765010
- Haidar, J.I., 2015."Sanctions and Exports Deflection: Evidence from Iran," Paris School of Economics, University of Paris 1 Pantheon Sorbonne, Mimeo
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- "Blockade as Act of War". Crimes of War Project. Archived from the original on 2012-06-18. Retrieved 2012-07-01.
- Palánkai, Tibor. "Investor-partner Business dictionary".
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- Hans Köchler (ed.), Economic Sanctions and Development. Vienna: International Progress Organization, 1997. ISBN 3-900704-17-1
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.
- Economic Sanctions Reconsidered, 3rd Edition, Hufbauer et al. p. 159
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.
- A Strategic Understanding of UN Economic Sanctions: International Relations, Law, and Development, Golnoosh Hakimdavar, p. 105
- Griswold, Daniel (2000-11-27). "Going Alone on Economic Sanctions Hurts U.S. More than Foes". Cato.org. Retrieved 2015-03-30.
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- 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.
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- Leo Cendrowicz (February 10, 2010). "Should Europe Lift Its Arms Embargo on China?". Time.
- "Russia announces 'full embargo' on most food from US, EU". Deutsche Welle. 7 August 2014.
- "Russia expands food imports embargo to non-EU states". English Radio. 13 August 2015. Retrieved 10 November 2015.[permanent dead link]
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- "Australia bans all live cattle exports to Indonesia". BBC News. 8 June 2011. Retrieved 2 January 2016.
- United States Department of the Treasury. "What You Need To Know About U.S. Economic Sanctions" (PDF). treasury.gov.
- Josh Levs (January 23, 2012). "A summary of sanctions against Iran". cnn.com.
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- "Brazil slaps trade sanctions on U.S. to retaliate for subsidies to cotton farmers". Content.usatoday.com. 2010-03-09. Retrieved 2015-03-30.
- Cockburn, Patrick (February 4, 1994). "US finally ends Vietnam embargo". The Independent. London.
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- "Kosovo imposes embargo on Serbia". The Sofia Echo. 21 July 2011. Retrieved 2 January 2016.
- "Georgia Doubles Wine Exports as Russian Market Reopens". RIA Novosti. 16 December 2013.
|Look up embargo in Wiktionary, the free dictionary.|
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