Modern International Mechanisms of Sanctions
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PhD in Political Science, RIAC Expert
Sanctions are one of the most important instruments available to the United Nations Security Council for negotiating settlements to international problems. The Security Council has the exclusive prerogative to impose sanctions on countries in support of legitimate objectives enshrined in the UN Charter. The trend gaining momentum towards imposing unilateral U.S. and EU sanctions bypassing the UN Security Council could undermine international political and diplomatic efforts to resolve the crisis and weaken the unity of the international community.
Sanctions are one of the most important instruments available to the United Nations Security Council for negotiating settlements to international problems. The Security Council has the exclusive prerogative to impose sanctions on countries in support of legitimate objectives enshrined in the UN Charter.
Being a responsible member of the international community and a permanent member of the UN Security Council, Russia complies in good faith with the provisions of the sanction regimes imposed by this body. However, it vigorously opposes the adoption of sanctions by certain countries and their associations of unilateral restrictions that undermine international political and diplomatic efforts to resolve crises.
Sanctions’ Regime of the UN Security Council
With all its shortcomings and contradictions, the modern system of peacekeeping, based primarily on the legal principles and mechanisms of the UN Charter, is an effective mechanism for ensuring international security and world order.
With all its shortcomings and contradictions, the modern system of peacekeeping, based primarily on the legal principles and mechanisms of the UN Charter, is an effective mechanism for ensuring international security and world order. Maintaining peace can be achieved to a large extent by security enforcement measures available to the United Nations.
UN Members confer onto the Security Council the primary responsibility for maintaining international peace and security, and agree that in carrying out its duties under this responsibility, the Security Council acts on their behalf (Article 24 of the UN Charter). In other words, the Charter obliges the Member States to abide by the decisions of the UN Security Council, carrying out its duties under this primary responsibility. The Security Council may investigate any dispute, or any situation which might endanger the maintenance of international peace and security (Article 34) and recommend such terms of settlement as it considers appropriate at any stage of a dispute (Articles 36, 37).
One of the longest embargoes that was put by
the UN was on Somalia from 1992 to 2013
The most widespread sanction measure is the imposition of an arms embargo which is a ban on the supply and sale of arms and related materiel of all types. Such an embargo can be administered in part; for example, it can refer to the supply of weapons only, or the export of arms or certain types of weapons.
The arms embargo is closely connected to an additional set of sanction measures to ensure effective control over its enforcement. It implies, in the first instance, the mandatory inspection of cargo for prohibited goods (at border crossings, ports and airports, and even on the open sea), marking requirements for weapons entering the country “under exemption”, etc.
A ban on providing technical training or assistance related to the transfer, manufacture, maintenance or operation of armaments and related equipment often runs parallel to the arms embargo. In addition, the training of the relevant personnel may also be prohibited.
In some cases when it is necessary to stop cash flows used by the offending regime, restrictions are imposed on the export/import of certain goods, such as oil and oil products, natural gas, commodities, logs and lumber, rough diamonds, etc. Since trade embargos may negatively affect primarily the civilian population, Security Council resolutions in most cases include provisions for effective humanitarian exemptions and other measures aimed at correcting the unwanted effect of the sanctions.
Another kind of sanction is the air embargo, i.e. a ban on granting permission to any aircraft to take off and land, if it is owned, leased or operated by certain states or organizations.
Sanction measures for restricting state operations in the banking and financial sectors, such as securing loans, export subsidies and other forms of financial assistance are increasingly gaining ground.
In March 2013 the Security Council approved
sanctions against DPRK that allowed to freeze
bank accounts, examine airplanes and ships of
this state and its’ diplomats in order to search
for big sums of money, that could possibly be
used to develop nuclear and missile programs.
The so-called smart sanctions, designed to provide targeted impact on suspected illegal activities of individuals and legal entities, have been recently used on a larger scale to improve the sanction regimes imposed by the Security Council. When adopting a resolution on sanctions, the UN Security Council makes a list of persons whose behavior had triggered sanctions in the first place. UN Member States are obliged to freeze monetary funds, other financial assets and economic resources owned or controlled by individuals or entities listed in the annex to the resolution, which are on their territories at the date of the resolution or at any time thereafter. In addition, a ban is introduced on the provision by nationals of Member States or other individuals and entities on their territories of funds, financial assets or economic resources to persons included in the sanctions list or to their benefit, as well as on foreign travel of such persons.
UN Security Council Sanctions Committees, composed of representatives of all Security Council members, are the most important tool for enforcing the sanction regimes and monitoring their implementation and decision-making with regard to smart sanctions. Currently, there are 13 such committees. The activities of 11 of them are country-oriented, namely Somalia, Iraq, Liberia, the Democratic Republic of the Congo, Cote d'Ivoire, Sudan, Lebanon, North Korea, Iran, Libya and Guinea-Bissau. The work of two committees focuses on sanctions against terrorist organizations of Al Qaeda and the Taliban movement.
UN Security Council Sanctions Committees, composed of representatives of all Security Council members, are the most important tool for enforcing the sanction regimes and monitoring their implementation and decision-making with regard to smart sanctions.
In terms of the fairly extensive practical application of sanctions’ measures, the history of the UN can be roughly divided into two periods – before and after the end of the Cold War.
During the 45 years of the Cold War, sanctions were imposed only twice - against Southern Rhodesia in 1966 and South Africa in 1977.
After the end of the Cold War, the use of sanctions and other coercive measures increased, sometimes irrespective of the fact that political and diplomatic options had not yet been exhausted. Some experts even called the 1990s the “sanctions’ syndrome period” [1] or the “sanctions decade” [2].
Only during the last decade of the 20th century did the Security Council adopt sanctions regimes against Iraq, the Federal Republic of Yugoslavia, Libya, Liberia, Somalia, Haiti, UNITA, Rwanda, Sudan, Sierra Leone and the Taliban.
In the 21st century, sanctions were already imposed against North Korea, Iran, Libya (again), the Democratic Republic of the Congo, Cote d'Ivoire, Lebanon and Guinea-Bissau.
The grounds for adopting sanctions regimes may be different and lie in the resistance of aggression; support of legally elected heads of state; struggle with terrorism; observance of human rights; and promotion of disarmament and prevention of the development of national nuclear programs.
However, the active imposition of sanctions through the UN Security Council has revealed a number of weak points and, above all, their low level of effectiveness. Sanctions have often failed to achieve their goals. Obviously, the adoption and imposition of sanctions regimes without taking into consideration complex issues related to the observance and protection of human rights and fundamental freedoms, may negatively affect the credibility of the respective measures.
Peculiarities of the EU and the U.S Sanctions Policy
UN Targeted Sanctions Regimes
With regards to modern methods of unilateral sanctions, it is appropriate to note that according to Article 103 of the Charter of the United Nations, in the event of a conflict between the obligations of the Members of the United Nations under the Charter and their obligations under any other international agreement, the obligations under the Charter shall prevail. Therefore, the sanctions imposed by the UN Security Council prevail over international obligations of states.
Besides, in accordance with Article 53 of the Charter of the United Nations, the UN Security Council may utilize regional arrangements or agencies for enforcement action under its authority. The Article stipulates that no enforcement action shall be taken under regional arrangements or by regional agencies without the authorization of the Security Council. In other words, under Article 53 regional organizations have no right to impose their own sanctions without the approval of the UN Security Council, which “shall at all times be kept fully informed of activities undertaken or in contemplation under regional arrangements or by regional agencies for the maintenance of international peace and security” (Article 54 of the Charter of the United Nations).
The trend gaining momentum towards imposing unilateral U.S. and EU sanctions bypassing the UN Security Council could undermine international political and diplomatic efforts to resolve the crisis and weaken the unity of the international community.
However, unilateral sanctions imposed by, for example, the EU and the U.S. are more comprehensive than UN Security Council restrictions, supported by Russia and other members of the Council. Smart sanctions are adopted in a specific way – individuals and legal entities outside the UN sanctions lists are immediately included in national blacklists. Designating the North Korea’s Foreign Trade Bank for sanctions by the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury illustrates this fact better than anything. This decision was made immediately after the passage of UN Security Council Resolution 2094 on the DPRK on March 7th, 2013. Note that this bank is the only banking institution authorized to provide services to diplomatic missions in North Korea, including to Russia and international organizations.
Sanctions diplomacy is a widespread instrument in the arsenal of the Common Foreign and Security Policy (CFSP) of the European Union. The increase in the number and scope of the European Union’s restriction of initiatives is regarded by experts in Brussels as a manifestation of the development of an independent foreign policy and the strengthening of the international “regulatory” role of the EU. Given the insignificant role of the military factor in the European Union foreign policy planning, the natural association advantages become the main tools for promoting EU interests and democratic standards worldwide. Despite the crisis in Europe, these tools are quite impressive due to trade, investment, scientific and technological potential as well as the attractiveness of European social and political structures, standards of living and culture. The temptation to deny access to these resources in order to coerce the acquiescence of some “troublemakers” is increasingly becoming a driving force in the actions of Brussels, easily displacing such costly political and financial options, as conducting crisis management operations, donor aid, etc.
The entry into force of the Lisbon Treaty in 2009 failed to make fundamental changes to the current system of sanctioning. Article 215 (ex Article 301), making a separate section of Title IV “Restrictive Measures” of the Treaty on the Functioning of the European Union, remained the formal basis for imposing sanctions. The newly formed European External Action Service (EEAS or EAS) together with the European Commission puts the sanctions into practice. Approval by the EU Council of regulations in the development of restricting decisions undergoes a special procedure without the participation of the European Parliament.
In terms of procedure, the EU Council’s decision-making on sanctions is no different from other solutions in the sphere of Common Foreign and Security Policy (CFSP) and is made on a unanimous basis. This leaves open a possibility of “constructive abstention” of up to one third of the Member States, according to Article 31 of the Treaty on European Union. Dodging the responsibility of the collective commitment to the relevant sanctions, Member States abstaining in a vote, nevertheless, to pledge to refrain from any actions likely to conflict with or impede Union action based on that decision. The Treaty on European Union makes no provision for other forms of “enhanced cooperation” in this highly sensitive sphere of sanctions.
Situational factors, as the events of the Arab Spring and the escalation of confrontation between the Western powers and Iran over the latter’s nuclear program, make their own contributions to the promotion of EU sanctions activity.
In March 2011, huge anti-government protests erupted in Syria and developed into large-scale fighting between government forces and armed rebels. In May of that year, Brussels reacted by adopting a series of sanctions measures against the official government in Damascus. The EU sanctions package included, among other things, an oil embargo, restrictions related to investment, finance and transport sectors, a ban on entry to the Member States, and the freezing within the European Union of financial assets of Syrian individuals and entities, including the Central Bank of Syria.
On May 27th, 2013 the EU Council of Ministers of Foreign Affairs adopted at its meeting the Declaration and Conclusions on Syria, according to which financial and economic sanctions against the Syrian Arab Republic were extended for an additional 12 months. In addition, these decisions imply lifting of the earlier EU Council embargo on the supply of arms and related materials to opposition fighters in Syria. In this respect, it is worth noting the following. In accordance with the Declaration on Principles of International Law Concerning Friendly Relations and Co-operation among States, adopted by the UN General Assembly on October 24th, 1970, “no State shall organize, assist, foment, finance, incite or tolerate subversive, terrorist or armed activities directed towards the violent overthrow of the regime of another State, or interfere in civil strife in another State”.
The key EU states – Britain, France and Germany – have made significant contributions to unilateral drafts of UNSC resolutions on Syria, which place all the blame for the deterioration of the situation in the country on the SAR government, as well as provide for the imposition of sanctions on Damascus and, possibly, even for foreign invasion. Russia and China have used the right of veto three times (October 4th, 2011, February 4th and July 19th, 2012) in votes on these scandalous documents in the UN Security Council.
Exerting pressure on the Iranian economy is accompanied by an attack on Iran's positions in the regional political field. The United States and its allies in the EU are applying unprecedented efforts to eliminate Bashar al-Assad's regime – the most powerful of Teheran’s allies in the Middle East.
To exert pressure on Iran, the European Union has mobilized almost the entire arsenal of sanctions available to it, namely placing a freeze on assets in member countries; a travel ban on individuals in the sanctions list; an embargo on arms and related materials, goods and technology, particularly of the dual-use nature; a ban on resources that can be used to suppress the protests; and an embargo on equipment for the oil and gas industry. A ban has been imposed on investment and the provision of services in arms trade, energy, nuclear industry, as well as financial assistance to the government of Iran. The EU has banned the provision of insurance and reinsurance by insurers in Member States to Iran and Iranian-owned companies, and denied Iranian aircraft on cargo flights access to EU airports.
In contacts with Western partners, Russian officials consistently emphasize that Russia does not recognize the extraterritorial nature of sanctions imposed by the EU, the United States and other countries, and warn that if Russian companies and banks suffer from them, this will lead to serious consequences for bilateral relations.
Unilateral restrictive measures are not binding on Russia. Nevertheless, there is a possibility that individuals and entities from third countries, including Russia, may face extraterritorial restrictions too. One such instance took place during the period from December 2009 to February 2010, when Frankfurt airport customs officials seized air-freight cargo en route from Moscow to Tehran which contained monitoring equipment bound for the Bushehr Nuclear Power Plant. Under UN Security Council Resolutions 1737 of December 23rd, 2006 and 1929 of June 9th, 2010 (it was adopted after the incident in Frankfurt), countries can help Iran pursue peaceful nuclear applications and transfer equipment and materials for light-water reactors, and the Bushehr Nuclear Power Plant falls exactly into this category. The German side referred to the Council Regulation (EC) No 423/2007 of April 19th, 2007 concerning restrictive measures against Iran as the legal basis for the seized air-freight cargo. It was incorporated into German law and allowed for more restrictive measures that go beyond the scope of the relevant UN Security Council resolutions. The Regulation did not contain any provision, allowing for the delivery of light-water reactor equipment to Iran.
In 2011-2012, the EU and the U.S. tightened unilateral sanctions pressure on Iran. The tightening was due to frustration over the lack of progress in the negotiations of the six international mediators (Russia, United Kingdom, Germany, China, USA, France) with Tehran over its nuclear program (INP), and concern derived from purported research, mentioned in the Annex to the IAEA Director General Report of November 8th, 2011. On November 21st, 2011 the U.S. Department of the Treasury informed that it had found Iran culpable for a Jurisdiction of Primary Money Laundering Concern under Section 311 of the USA PATRIOT Act. The entire financial sector of Iran, including the Central Bank, private banks, and their branches and subsidiaries, including those operating abroad, was connected to the structures posing a threat to the international financial system.
The U.S. tightened the screws in terms of domestic requirements for financial transactions with Iran's banking sector. American credit and financial institutions were required “to apply special due diligence to their correspondent accounts to guard against their improper indirect use by Iranian banking institutions.”
In addition to this, in the summer of 2012 the U.S. launched an attack on large European banks, accusing them of providing financial services to Iran in the period up to 2008 in violation of U.S. sanctions regime, which may cost them a license to operate in America. The British Royal Bank of Scotland and a German subsidiary HypoVereinsbank of the Italian Unicredit are the targets of US investigation. The German Commerzbank has reported being probed for its financial transactions with Iran. The British bank Standard Chartered has agreed to pay a $340m (£220m) fine to a US regulator which had accused it of hiding transactions linked to Iran.
In the wake of Washington’s policy, the EU Council adopted Council Decision 2012/35/CFSP of January 23rd, 2012 on a full embargo on Iranian oil to the European Union, entering in force on July 1st of that year, and A prohibition to provide insurance and reinsurance, related to the import, purchase, or transport of Iranian petrochemical products. Putting the Central Bank of Iran on the EU sanctions list was quite indicative too.
In addition, the European Council Decision 2012/152/CFSP) of March 15th, 2012 prohibited the supply of specialized financial messaging services, which are used to exchange financial data and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) discontinued service to the Iranian banks, blocking Iranian clients' access to SWIFT.
Western countries believed that the combination of direct (aimed at the military aspects of the INP) and indirect (aimed to reduce gains from the Iranian foreign trade and inflict damage on the economy) restrictive measures would force the Iranian government to meet the demands of the international community on its nuclear program.
However, taking unprecedented, according to their own assessment, restrictive measures against Iran in 2012, EU leaders have crossed the line beyond which the sanctions were no longer targeted and affected the economies of the European Union Member States, weakened by the global financial and economic crisis, as badly as the Iranian one.
Greece, Spain and Italy suffered from the EU's oil embargo more than others. Athens, with 15% of total oil imports from Iran, faced an extremely difficult situation. In the second half of 2011, this figure rose to 60% in view of the fact that the Iranians were selling oil to Greece on preferential terms, which other suppliers could not offer because of the catastrophic financial situation in the country. The ban on providing insurance services hit at the interests of UK in the first place, since the vast majority of transactions in the insurance market were handled by that country.
During six-party talks Iran was offered to decrease
the enrichment of uranium to 20% in exchange for
lifting all UN sanctions, but Iran refused.
In addition, the sanctions policy pursued by Brussels against Iran caused serious discontent in the business circles of Germany. They could not receive payments from Iranian counterparties for services rendered. Thus, according to the head of the Association of German Machine Builders in Frankfurt Dr. Hannes Hesse, approximately € 6 billion still remain owed to German manufacturers for engines and spare parts delivered to Iran. These products had no relation to Iran's nuclear program, and the contracts on their delivery had been concluded before the imposition the EU restrictive measures and, therefore, were valid.
In general, it is quite obvious that the trend gaining momentum towards imposing unilateral U.S. and EU sanctions bypassing the UN Security Council could undermine international political and diplomatic efforts to resolve the crisis and weaken the unity of the international community. In addition, such actions are of an extraterritorial nature and violate the sovereignty of states.
Recollecting the Western states’ sanctions impact on Yugoslavia, Iraq and Libya, which served to some extent as a springboard for regime change in these countries, we can expect further tightening of unilateral restrictive measures against Syria and Iran.
In contacts with Western partners, Russian officials consistently emphasize that Russia does not recognize the extraterritorial nature of sanctions imposed by the EU, the United States and other countries, and warn that if Russian companies and banks suffer from them, this will lead to serious consequences for bilateral relations. In turn, Russian economic operators are being rendered required political and diplomatic support.
Based on the above, in the foreseeable future we should expect the UN Security Council to resort to adopting sanctions more often because of several reasons, with globalization of the world economy being the most apparent. State stability is to a large extent determined by economic development, so the discontinuance or restriction of economic relations of the state can have significant consequences, turning sanctions measures into a powerful tool to exert influence on the offender. This is particularly true for developing countries.
Serious threats to peace and security that the international community faces today do not necessarily boil down to armed conflicts between states. Current threats include poverty, local and regional conflicts, proliferation and possible use of nuclear, chemical and biological weapons, international terrorism and transnational organized crime. These threats come from states and non-state actors.
Given these factors, sanctions measures of the Security Council are becoming increasingly important in the collective response to the violation of international law, which threatens or breaches international peace and security.
On the other hand, the use of coercive measures and armed forces to bypass the UN Charter and the Security Council cannot cope with profound social, economic, ethnic and other differences that are the underlying causes for conflict or crisis situations. Such steps only expand the conflict space, provoke tensions and the arms race, and exacerbate inter-state conflicts.
1. V.N. Fedorov The United Nations, Other International Organizations and Their Role in the 21st Century. Moscow, MGIMO University, 2005.
2. General Assembly Resolution 55/2 of September 8th, 2000, E/ESCAP/HIV/IGM.1/INF/6
Resolution 1318 (2000) adopted by the Security Council at its 4194th meeting on September 7th, 2000
Document of the General Assembly and of the Security Council A/55/367–S/2000/856 of September 11, 2000
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