DOCSLIB.ORG

Freshfields International Sanctions Guide

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Freshfields International Sanctions Guide Navigating international sanctions Navigating international sanctions Economic and trade sanctions have become a favoured geopolitical tool of governments. The rules are complex, ever evolving, and the risks of violation can be high. Every company operating across borders needs to plan for the potential effect of sanctions on their business, how to manage the risks, and how to position itself to operate safely by taking decisions that make business sense. On the positive side, companies that properly formulate their objectives, plan their strategy For an overview to sanctions, click on the thumbnail to open a video in your web browser. and implement it well will benefit from being in a better position to navigate sanctions when they hit and may well have a competitive advantage. FREQUENTLY ASKED QUESTIONS Frequently asked questions What are sanctions? How do sanctions Some frequently asked questions regarding sanctions. get imposed? Who most frequently What are sanctions? How do sanctions get imposed? Who most frequently imposes sanctions? Economic and trade sanctions are restrictions that In the US – most US sanctions are imposed by the In the EU – sanctions are either imposed the Council imposes sanctions? governments impose on certain types of transactions US President, under general statutory authority in implementation of Resolutions adopted by the UN United States with targeted countries or persons, as a tool to achieve to respond to international crises, through an Security Council under Chapter VII of the UN Charter foreign policy or national security goals. Sanctions Executive Order. In some cases, US Congress enacts or within the framework of the Common Foreign and European Union often are imposed in an effort bring about a change legislation imposing sanctions on specific countries Security Policy (CFSP). With regard to these latter EU Member States (where the EU does not have with regard to armed conflict, international terrorism, or persons. Executive Orders and sanctions statutes measures, the Council first adopts a CFSP Decision exclusive competence) the spread of weapons of mass destruction, narcotics are generally implemented by the US Treasury, State under Article 29 of the TEU. The measures foreseen in trafficking, violations of international law, human or Commerce Departments through regulations that Council Decision are either implemented at EU Other countries rights or policies that do not respect the law or or various other administrative measures. These or at national level. Measures such as arms embargoes democratic principles. They aim to fulfil these political executive branch departments have broad authority or restrictions on admission are implemented directly UN Security Council (Resolutions have to be objectives as well as to restore international peace to investigate and impose civil penalties on persons by the Member States, which are legally bound to implemented by member states) and security and to enforce security interests without found to have violated sanctions. The US Department act in conformity with CFSP Council Decisions. Other regional bodies resorting to military action. They are seen by many of Justice and US Attorneys offices, and certain state Other measures interrupting or reducing, in part or governments to be an important and valuable tool in a and local prosecutors have the authority to seek completely, economic relations with a third country, broad range of international crises. criminal penalties through the US courts. Sanctions including measures freezing funds and economic are primarily a matter of federal, not state, law. resources, are implemented by means of a Regulation, However, some state banking regulators have taken adopted by the Council, acting by qualified majority, an active approach towards economic sanctions, and on a joint proposal from the High Representative of US Congress has authorised certain limited economic the Union for Foreign Affairs and Security Policy and sanctions measures by state and local governments. the Commission, under Article 215 of Functioning of the European Union. The European Parliament has to be informed. Such Regulations are binding and directly applicable throughout the EU, and they are subject to judicial review by the Court of Justice and the General Court in Luxembourg. CFSP Council Decisions providing for restrictive measures against natural and legal persons are also subject to judicial review. Frequently asked questions (continued) Some frequently asked questions regarding sanctions. How do sanctions get lifted? What type of sanctions can be imposed? Who and what can be targeted? In the US the lifting of US sanctions can be quite Arms embargoes So-called ‘Smart sanctions’, ie sanctions which States (including their public authorities) straightforward – if they were imposed by the targets pecific individuals, groups or entities How do sanctions get lifted? President acting on his general authority, they can Financial sanctions (‘persons’) Individuals, ie natural persons also be lifted quite rapidly under that same authority. – Prohibitions on the provision of financing or Legal persons, entities or bodies Sanctions imposed, in whole or in part, on the basis – Freezing of all funds and economic resources of What type of sanctions financial services to targeted countries or the targeted persons of specific statutes enacted by US Congress can be persons Organisations can be imposed? much more difficult and slower to lift. Often, the – Prohibition on making funds or economic Vessels and aircraft executive branch can only go so far to lift or waive – Restrictions on the raising of new equity or debt resources available (directly or indirectly) to or for such sanctions and a complete lifting will require new capital by targeted companies the benefit of targeted persons Who and what can action by Congress. This is a difficult and uncertain – Bans on the provision of specific services What are the main risks from be targeted? process at best. – Prohibition on engaging in transactions or dealings (brokering, financial services, technical assistance) with the targeted persons sanctions for companies? In the EU there are two ways for sanctions to get lifted; Business disruption – governments may feel Trade sanctions – Visa or travel bans on targeted individuals What are the main either the legal instruments from the outset provide compelled in a crisis to suddenly cut off substantial for an expiration date (ie the sanctions imposed expire – Export and/or import bans (trade sanctions Most sanctions programs broadly prohibit flows of trade and commerce risks from sanctions automatically at a certain point in time if they are not generally applicable to specific products such circumvention which means doing indirectly, or Loss of assets and other investment in emerging for companies? renewed or amended as appropriate), or the sanctions as oil, timber or diamonds) supporting other parties in doing, activities that are repealed if the Council deems that their objectives markets that become targeted by sanctions – Prohibitions on investment, payments and capital would be prohibited if done directly have been met. In order to ensure that the need for movements Potentially severe penalties – a serious breach of renewal of restrictive measures is discussed within an sanctions is generally a criminal offence, with large appropriate period of time EU sanctions regulations – Withdrawal of tariff preferences fines payable and the possibility of prison sentences usually contain either an expiration or a review clause. – Flight bans for individuals Reputational damage Time and distraction for management to deal with sanctions breaches, particularly if there is risk of regulatory or reputational consequences Frequently asked questions (continued) Some frequently asked questions regarding sanctions. Who must comply with Who must comply with What do US sanctions generally What are the potential penalties? EU sanctions? US sanctions? look like? EU EU sanctions apply to all EU nationals, including US sanctions apply to US persons – that is, any Territorial embargoes EU Regulations allocate responsibility for penalties entities incorporated or constituted under the law of US citizen (including dual nationals), permanent For example, the almost complete export and import for sanctions violations to the EU Member States, an EU member state – regardless of where they are resident (‘green card’ holder), any entity formed embargoes against Cuba, Iran, Syria and Sudan. rather than EU institutions. In general, EU sanctions doing business inside or outside the EU. They also under US law, any person in the US or any person regulations provide that EU Member States shall lay apply to all business done by EU and non-EU persons taking or causing action within the US. This includes Secondary sanctions down rules for effective, proportionate and dissuasive in whole or in part within EU territory, including its any employee, officer or director of a US or non-US Extraterritorial sanctions providing for a range of penalties for infringements of the relevant regulation airspace and on any aircraft or vessel under an EU company who is a US citizen or permanent resident, penalties for non-US persons who engage in certain and shall take all measures necessary to ensure that member state’s jurisdiction. For EU sanctions to apply, wherever in the world they are. In relation to Cuba specified activities, for example activities involving they are implemented. Penalties therefore
Load more

Recommended publications
  • Verifying European Union Arms Embargoes
    Verification Research, Training and Information Centre Verifying European Union arms embargoes Paper submitted to the United Nations Institute for Disarmament Research (UNIDIR) for the European Commission project on ‘European Action on Small Arms, Light Weapons and Explosive Remnants of War’ Disclaimer: The views expressed in this paper do not necessarily reflect the views or opinion of the United Nations, UNIDIR, its members or sponsors. 18 April 2005 1 Verifying European Union arms embargoes Introduction 1. Analysis of the current situation 1.1 What is the role of monitoring and verification in making arms embargoes effective? 1.2 EU arms embargoes and UN arms embargoes 1.3 The link between EU arms embargoes and UN arms embargoes 1.4 How EU member states currently implement EU and UN arms embargoes 1.5 Monitoring and enforcing EU and UN embargoes 2. Recommendations 2.1 Drafting EU arms embargoes 2.2 Monitoring and enforcement 2.3 Additional recommendations Annex 1: Table of current EU and UN arms embargoes Introduction1 There are many reasons why sanctions—coercive measures undertaken by a group of nations in an effort to influence another nation into following international law or submitting to a judgment—may be adopted against a state. One of the most common is to improve the human rights situation in the sanctioned state by targeting the perpetrators of human rights abuses, who may be individuals, non-state actors, government elites or the military. They are also used to change the behaviour of a state which is undermining democracy or the rule of law, or which has threatened the security of a particular region.
    [Show full text]
  • Applying Conventional Arms Control in the Context of United Nations Arms Embargoes
    Applying conventional arms control in the context of United Nations arms embargoes Acknowledgements Support from UNIDIR core funders provides the foundation for all of the Institute’s activities. This project is supported by the Governments of Germany and Switzerland. This report was made possible through the facilitation and cooperation of former and current members of the Security Council. UNIDIR would like to express its appreciation to the United Nations partners, namely the United Nations Department of Political Affairs, United Nations Mine Action Service and the United Nations Office for Disarmament Affairs, which all contributed to this study. Additionally, UNIDIR would like to thank former and current members of the Panel of Experts for their valuable inputs and feedback on this report. This report would not have been possible without the support and close cooperation of all partners mentioned above. Savannah de Tessières drafted this report, with support from Himayu Shiotani, Jonah Leff, Franziska Seethaler and Sebastian Wilkin. Himayu Shiotani edited this report, with support from Sebastian Wilkin and John Borrie. At UNIDIR, Himayu Shiotani managed this project. About UNIDIR The United Nations Institute for Disarmament Research (UNIDIR)—an autonomous institute within the United Nations—conducts research on disarmament and security. UNIDIR is based in Geneva, Switzerland, the centre for bilateral and multilateral disarmament and non-proliferation negotiations, and home of the Conference on Disarmament. The Institute explores current issues pertaining to a variety of existing and future armaments, as well as global diplomacy and local tensions and conflicts. Working with researchers, diplomats, government officials, NGOs and other institutions since 1980, UNIDIR acts as a bridge between the research community and Governments.
    [Show full text]
  • The European Union and Burma: the Case For
    The European Union and Burma: The Case for Targeted Sanctions Produced by the Burma Campaign UK Tel: 020 7324 4710 March 2004 The report has been endorsed by the following organisations: ♦Actions Birmanie, Belgium ♦Asienhaus, Germany ♦Burma Bureau Germany ♦Burma Campaign UK ♦Burma Centrum Netherlands ♦Committee for the Restoration of Democracy in Burma (Germany) ♦Danish Burma Committee ♦Finnish Burma Committee ♦Infobirmanie, France ♦Norwegian Burma Committee ♦Swedish Burma Committee ♦The International Confederation of Free Trade Unions (endorses the recommendations of this report) Table of Contents Foreword........................................................................................................................................................ 4 Executive Summary ..................................................................................................................................... 5 Recommendations.................................................................................................................................. 6 1. Introduction................................................................................................................................................ 7 2. The Problem ............................................................................................................................................... 7 3. Fuelling the Oppression ........................................................................................................................... 7 4. The Costs...................................................................................................................................................
    [Show full text]
  • Extra-Territorial Application of National Legislation: Sanctions Imposed Against Third Parties
    EXTRA-TERRITORIAL APPLICATION OF NATIONAL LEGISLATION: SANCTIONS IMPOSED AGAINST THIRD PARTIES (i) Introduction The subject item "Extra-territorial Application of National Legislation: Sanctions Imposed Against Third Parties" was placed on the provisional agenda of the 36th Session of the Asian African Legal Consultative Committee (AALCC) following upon a reference made by the Government of the Islamic Republic of Iran in accordance with Article 4 (c) of the Statutes and sub-Rule 2 of Rule 11 of the Statutory Rules of the Committee. The Explanatory Note submitted to the AALCC Secretariat by the Government of the Islamic Republic of Iran had enumerated the following four major reasons for inclusion of this item on the agenda (i) that the limits of the exception to the principle of extraterritorial jurisdiction were not well established; (ii) that the practice of States indicates that they oppose the extraterritorial application of national legislation; (iii) that extraterritorial measures violate a number of principles of international law; and (iv) that extraterritorial measures affect trade and economic cooperation between developed and developing countries and also interrupt cooperation among developing countries. The Explanatory Note requested the AALCC "to carry out a comprehensive study concerning the legality of such unilateral measures, taking into consideration the positions and reactions of various Governments, including the positions of its Member- States". Accordingly a preliminary study was prepared by the Secretariat, and
    [Show full text]
  • International Economic Sanctions: Improving the Haphazard U.S. Legal Regime
    Georgetown University Law Center Scholarship @ GEORGETOWN LAW 1999 International Economic Sanctions: Improving the Haphazard U.S. Legal Regime Barry E. Carter Georgetown University Law Center This paper can be downloaded free of charge from: https://scholarship.law.georgetown.edu/facpub/1585 Barry E. Carter, International Economic Sanctions: Improving the Haphazard U.S. Legal Regime, 75 Cal. L. Rev. 1159 (1987) This open-access article is brought to you by the Georgetown Law Library. Posted with permission of the author. Follow this and additional works at: https://scholarship.law.georgetown.edu/facpub Part of the International Law Commons California Law Review VOL. 75 JULY 1987 No. 4 Copyright © 1987 by California Law Review, Inc. International Economic Sanctions: Improving the Haphazard U.S. Legal Regime Barry E. Carter TABLE OF CONTENTS PAGE I. INTRODUCTION ........................................... 1163 Scope of the Article ....................................... 1166 II. THE PURPOSES AND EFFECTIVENESS OF ECONOMIC SANCTIONS ................................................ 1168 A. The Purposes of Sanctions ............................. 1170 B. Effectiveness of Sanctions .............................. 1171 1. Effectiveness as a Function of Purpose .............. 1173 2. Effectiveness of Sanctions by Type .................. 1177 3. Costs to the Sender Country ....................... 1180 III. THE NONEMERGENCY LAWS .............................. 1183 A. Bilateral Government Programs........................ 1183 B. Exports from the United
    [Show full text]
  • Chapter 5: the United Nations and the Sanctions Against Iraq
    5 7KH8QLWHG1DWLRQVDQGWKH6DQFWLRQV $JDLQVW,UDT 5.1 The historical involvement of the international community, the League of Nations and the United Nations (UN) in the wider Middle East region was outlined in Chapter 2 of this report. As discussed in that Chapter, the Middle East became a focus for international rivalry with the demise of the Ottoman (Turkish) Empire, the period of the French and British Mandates, the UN partition plan for Palestine of 1947 and the post-war creation of the State of Israel in 1948. 5.2 Chapter 2 also outlined developments in the wider Arab-Israeli conflict after World War 2, the path of the multilateral tracks of the Oslo peace process from 1991 onwards and the 'shuttle diplomacy' efforts of the major powers, particularly the United States (US), until the present time. The UN in the Middle East 5.3 The UN officially came into existence in October 1945. Australia was one of the original 51 member states. In the post World War 2 environment, one of the earliest UN involvements in the Middle East region involved the former British-mandate Palestine. 5.4 By 1947, Britain had found the Palestine Mandate unworkable and, accordingly, submitted the problem to the UN. The UN General Assembly (UNGA) adopted Resolution 181 in November 1947, which provided for a 'Plan of Partition with Economic Union'. This laid down steps for bringing both Arab and Jewish peoples to independence, with special provisions for Jerusalem. No progress had been made towards implementing the plan before Britain relinquished the Mandate on 14 May 94 1948 and the Jewish leadership proclaimed the State of Israel.
    [Show full text]
  • Boycotts and Sanctions Against South Africa: an International History, 1946-1970
    Boycotts and Sanctions against South Africa: An International History, 1946-1970 Simon Stevens Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Graduate School of Arts and Sciences COLUMBIA UNIVERSITY 2016 © 2016 Simon Stevens All rights reserved ABSTRACT Boycotts and Sanctions against South Africa: An International History, 1946-1970 Simon Stevens This dissertation analyzes the role of various kinds of boycotts and sanctions in the strategies and tactics of those active in the struggle against apartheid in South Africa. What was unprecedented about the efforts of members of the global anti-apartheid movement was that they experimented with so many ways of severing so many forms of interaction with South Africa, and that boycotts ultimately came to be seen as such a central element of their struggle. But it was not inevitable that international boycotts would become indelibly associated with the struggle against apartheid. Calling for boycotts and sanctions was a political choice. In the years before 1959, most leading opponents of apartheid both inside and outside South Africa showed little interest in the idea of international boycotts of South Africa. This dissertation identifies the conjuncture of circumstances that caused this to change, and explains the subsequent shifts in the kinds of boycotts that opponents of apartheid prioritized. It shows that the various advocates of boycotts and sanctions expected them to contribute to ending apartheid by a range of different mechanisms, from bringing about an evolutionary change in white attitudes through promoting the desegregation of sport, to weakening the state’s ability to resist the efforts of the liberation movements to seize power through guerrilla warfare.
    [Show full text]
  • Iran Sanctions
    Iran Sanctions Kenneth Katzman Specialist in Middle Eastern Affairs Updated November 15, 2019 Congressional Research Service 7-.... www.crs.gov RS20871 SUMMARY RS20871 Iran Sanctions November 15, 2019 Successive Administrations have used economic sanctions to try to change Iran’s behavior. U.S. sanctions, including “secondary sanctions” on firms that conduct certain Kenneth Katzman transactions with Iran, have adversely affected Iran’s economy but have had little Specialist in Middle observable effect on Iran’s pursuit of core strategic objectives such as its support for Eastern Affairs regional armed factions and its development of ballistic and cruise missiles. [email protected] For a copy of the full report, During 2012-2015, when the global community was relatively united in pressuring Iran, please call 7-.... or visit Iran’s economy shrank as its crude oil exports fell by more than 50%, and Iran had www.crs.gov. limited ability to utilize its $120 billion in assets held abroad. Iran accepted the 2015 multilateral nuclear accord (Joint Comprehensive Plan of Action, JCPOA), which provided Iran broad relief through the waiving of relevant sanctions, revocation of relevant executive orders (E.O.s), and the lifting of U.N. and EU sanctions. Remaining in place were a general ban on U.S. trade with Iran and U.S. sanctions on Iran’s support for regional governments and armed factions, its human rights abuses, its efforts to acquire missile and advanced conventional weapons capabilities, and the Islamic Revolutionary Guard Corps (IRGC). Under U.N. Security Council Resolution 2231, which enshrined the JCPOA, nonbinding U.N.
    [Show full text]
  • The Role of the Sanctions in Diplomacy Introduction
    ODUMUNC 2020 Issue Brief UN General Assembly Fourth Committee: Disarmament The Role of the Sanctions in Diplomacy ODU United Nations Society Introduction: The Sanction determination of oppressed people. But a Dilemma growing consensus of UN Member States, including countries most affected by UN sanctions and their allies in the Non-Aligned Sanctions are one of the most common tools of Movement (NAM), is increasingly skeptical of international diplomacy and one of the most sanctions, though. Most UN Member States see controversial. Although they have ben in use sanctions as economic warfare by Western ford decades, in recent years, pushing the Governments—many of them their formal sanction button has been become a standard colonial and imperial rulers—to assert control response to international controversies.1 Is this over their domestic affairs and political choice. tool effective? Does it cause more harm than Other UN Member States support sanctions good? Should UN Member States be when they support national self-determination discouraged from using tehm, or asked to use against colonialism and imperialism. them exclusively through the UN? Even for the country that uses sanctions most of To their advocates, sanctions are way of raising all—the United States—they are highly pressure on governments violating international controversial. In the words of a prominent normative principles without resort to outright American foreign policy analyst: warfare. To their critics they are ineffectual, little more than political theater, more likely to ‘Sanctions don't work’ is an often-heard harm the innocent than their intended targets. refrain… What cannot be disputed, though, is that economic sanctions are fast But sanctions are extremely controversial.
    [Show full text]
  • The Impact of the International Community on the Fall of the South African Apartheid System
    The Impact of the International Community on the Fall of the South African Apartheid System The Impact of the International Community on the Fall of the South African Apartheid System: A Realist Perspective Patricia Di Brigida Historically, South Africa was a segregated society, but it was in 1948 that the system known as apartheid became the legally sanctioned policy of the white Afrikaner National Party Government. It was not one single policy, but a set of acts that restricted the lives of people of African origin. Rather than the implementation of a complete transformation of the political climate, changes were made as situations developed. The ruling party wanted to create a society that would ensure the separation of the races, while maintaining a limited and controlled presence of the African people. The nature of the system required that the state possess a high level of power. 1 The white majority government used this power to assuage white society's fear of being overwhelmed by the black majority? South African leaders attempted to justify, at the international level, this rigid conduct and control when the attention was directed towards their country following the Sharpeville incident of 1960. During this event, sixty-eight protesters were killed and two hundred were wounded during a peaceful demonstration against the 'pass laws', which restricted the movement of Africans within the apartheid state. Although South Africa's racial policies were debated in the United Nation's General Assembly from 1946 onwards, it was the Sharpeville incident that marked the turning point in the international response to the South African apartheid question.3 There is a consensus that the development of a worldwide anti-apartheid movement, beginning at the grass roots level and organized by citizens' groups, combined with the continuous dialogue occurring within international institutions put the spotlight on South Africa and received credit for affecting a universal repugnance for the discriminatory political system of apartheid.
    [Show full text]
  • Extraterritorial Economic Sanctions and Their Foundation in International Law
    EXTRATERRITORIAL ECONOMIC SANCTIONS AND THEIR FOUNDATION IN INTERNATIONAL LAW Susan Emmenegger TABLE OF CONTENTS I. INTRODUCTION ................................................................................................. 632 I. US PROSECUTION OF BNP PARIBAS ................................................................. 633 A. The Facts of the Case ................................................................................ 634 B. European Reaction ..................................................................................... 635 C. The Relevance of International Law .......................................................... 636 II. WHAT IS “EXTRATERRITORIAL JURISDICTION”? .............................................. 637 A. No Territorial Nexus.................................................................................. 639 B. No Substantial Territorial Nexus ............................................................... 640 C. No Exclusive Territorial Nexus ................................................................. 642 D. Need for a Broad Concept of Extraterritoriality ........................................ 643 III. WHEN IS EXTRATERRITORIAL JURISDICTION LEGAL? .................................... 644 A. Territoriality as the Starting Point ............................................................. 645 B. Extending the Territoriality Principle ........................................................ 646 C. The Personality Principle ..........................................................................
    [Show full text]
  • Economic Sanctions in International Law
    Jana Ilieva, Aleksandar Dashtevski, and Filip Kokotovic. 2018. Economic Sanctions in International Law. UTMS Journal of Economics 9 (2): 201–211. Review (accepted March 29, 2018) ECONOMIC SANCTIONS IN INTERNATIONAL LAW Jana Ilieva1 Aleksandar Dashtevski Filip Kokotovic Abstract Economic sanctions are a very important topic in the present international relations but also very common headlines in the daily news. At the present time, they become an increasingly prevalent measure for disciplining states’ unacceptable behaviour by a ban on trade and disruption of financial relations for political purposes. Economic sanctions can be imposed by an international organization, being there multilateral (UN) or regional (such as EU) but also can appear in form of unilateral (autonomous) act of a state. The latter is broadly criticized as being contrary to international law hence these unilateral sanctions face lack of support by the international lawyers. On the other hand, there exists no universally accepted mechanism (authoritative international body) in international law to determine if one economic sanction is lawful or not thus this issue remains one of the least developed area therein. Economic sanctions ‘effectiveness is another opened question that requires prompt reaction. Therefore, the existing relationship between economic sanction and international law is controversial and opens perspectives for different approaches and tensions in the international arena. Keywords: economic sanctions, states, international law, UN, EU, Russia. Jel Classification: K33; F51 INTRODUCTION Since the end of the Cold War, sanctions have become a popular tool for states (the United States in particular) to press authoritarian regimes to democratize and to respect human rights (Walldorf 2014).
    [Show full text]