Course Material

Question 1

Sanctions are…

Answer 1

Economic sanctions are financial, physical, and other measures taken to prevent certain types of activities or to influence the behavior of countries, groups, or individuals.

They are “deliberate”.
They are “legal-measures”.
They have the “force of law” - Failure to comply severe legal penalties & reputational (commercial) damage

*Allow countries to take action without resorting to military force

Question 2

Sanction Objectives

Answer 2

*Preventing certain activities, such as terrorism and dealing in narcotics
*Persuading governments to change their behavior
*Penalizing (or punishing) the sanctions target
*Making a symbolic statement

Question 3

Difference between a sanctions regime and a sanctions program

Answer 3

A Sanctions Regime is the overall structure of a country’s sanctions laws.

A Sanctions program the specific sanctions against an individual country or category of persons.

Question 4

Components of a sanctions regime

Answer 4

*Which agency administers and enforces sanctions
*The targets of sanctions
*Who must comply with the Sanctions

Question 5

Sanctions can apply to…

Answer 5

Countries, governments, regions, entities, unofficial groups, individuals, and vessels and aircraft.

Question 6

Sanctions must be obeyed by…

Answer 6

Countries, governments, regions, entities, unofficial groups, individuals, and vessels and aircraft.

Question 7

Typical Economic Sanctions

Answer 7

~ Arms embargos
~ Prohibitions on exports
~ Prohibitions on imports
~ Prohibitions on investment
~ Prohibition on financial transactions
~ Prohibitions on making any financial resources available
~ Product – Specific Embargos
~Asset freezes
~ Travel bans and restrictions
~ Reporting requirements
~ Circumvention and Facilitation

Question 8

Arms embargos

Answer 8

Typical Economic Sanctions - A prohibition on exports of military items. normally cover both arms and items that are used for military purposes. prohibition may cover either specified items or all goods, services, or technology used by the military. This means that it may be legal to export a product for civilian use, for example, but not for use by the military.

Question 9

Prohibitions on exports

Answer 9

Typical Economic Sanctions -
1. Prohibit all exporters, although here may be exceptions, such as exports of agricultural products and medicines and medical products.
2. Specify what products are subject to the export ban, with all other exports being permissible.
3. Goods and “Services” (e.g. financial services – everything banks do, insurance & investment services). Technology (e.g. software, transmission of software or information over the Internet, as well as the disclosure of information to nationals of a target country)

Question 10

Prohibitions on import

Answer 10

Typical Economic Sanctions - Imports from the target country or region are prohibited. These may include imports of goods, services, and technology. The prohibition may apply only to selected products, or to all imports from the country in question.

Question 11

Prohibitions on investment

Answer 11

Typical Economic Sanctions - Prohibit or limit investment in another country. typically takes the form of a prohibition on new investment. May be general or may apply only to investment in designated sectors. Export of financial services or financial transactions may severely affect the value of investments in sanctioned countries limiting the ability to repatriate profits from such investments or to provide funds for repairs or expansion of the investment.

Question 12

Prohibition on financial transactions

Answer 12

Typical Economic Sanctions - Sanctions may prohibit any type of financial transaction, including
processing payments, making loans, or providing any kind of banking, insurance or investment service. apply to individuals and organizations as well as to entire countries.

Question 13

Prohibitions on making any financial resources available

Answer 13

Typical Economic Sanctions - Prohibit providing any economic resources
to sanctions targets. Economic resources include funds, financial assets, or indeed anything of economic value. Typically applied to individuals or organizations rather than countries.

Question 14

Product – Specific Embargos

Answer 14

Typical Economic Sanctions - General prohibitions on any trade in specified products are another common form of sanctions. The objects of such product-specific embargos include bullion, precious metals, luxury goods, and petroleum.

Question 15

Asset freezes

Answer 15

Typical Economic Sanctions - Most far-reaching type of sanction is the freezing of assets – freeze any property belonging to a sanctions target. Assets must be held in a separate, designated account, until directed by the government to release them. funds, financial instruments, other assets sanctions target continues to own the assets, at least theoretically, but cannot access them. may be limited exceptions, such as the ability to use frozen funds to pay living expenses most commonly directed against individuals and organizations, although they may apply to all property owned by a government.

Question 16

Travel bans and restrictions

Answer 16

Typical Economic Sanctions - Prohibit either named persons or government officials of the target country from entering the country applying the sanctions There may be exceptions, such as for travel by prohibited government officials to meetings of the UN or other international organizations.

Question 17

Reporting requirements

Answer 17

Typical Economic Sanctions - US requires in some cases sanctions do not prohibit transactions with a target country but require that it be reported. Example – In US any companies with publicly-traded stock include a statement as to whether they do business with Iran.

Question 18

Circumvention

Answer 18

Typical Economic Sanctions -Targets of sanctions frequently seek to evade them attempting to circumvent sanctions is itself prohibited

Question 19

Facilitation

Answer 19

Typical Economic Sanctions - U.S. sanctions programs generally prohibit U.S. persons (wherever located), or non-U.S. persons located in the U.S., from facilitating transactions by foreign persons when those transactions would be prohibited if they were undertaken by U.S. persons themselves

Question 20

Sanction Exceptions…

Answer 20

~ Post and Telecommunications
~ Humanitarian Donations
~ Family Remittances
~ Informational Materials
~ Travel and Travel Expenses
~ Overflight Payments
~ Agricultural Products
~ Medicine and Medical Products
~ Licenses

Question 21

Post and Telecommunications

Answer 21

~ A sanction exception.
~ Mail, e-mail, text messages, telephone call – can make payments to gov’t authorities in sanctioned countries, as well as to local telecommunications providers.

Question 22

Humanitarian Donations

Answer 22

~ A sanction exception
~ Humanitarian Donations

Question 23

Family Remittances

Answer 23

~ A sanction exception
~ Sanctions should not prevent families from supporting each other. Remittance should be personal rather than commercial use. There may be a limit on amount that can be remitted each year.

Question 24

Informational Materials

Answer 24

~ A sanction exception
~ Books, music, movies, and information in general

Question 25

Travel and Travel Expenses

Answer 25

~ A sanction exception
~ Sanctions may or may not include a prohibition on travel to sanctioned countries. Travel to Iran or Syria, on the other hand, is allowed. Where travel is not prohibited, sanctions laws generally include an exemption for travel expenses, with the requirement that the expenses be directly related to travel.

Question 26

Overflight Payments

Answer 26

~ A sanction exception
~ Countries generally charge for the right to pass through their airspace. sanctions laws almost always contain an exemption for overflight payments. This exception also includes the right to pass through the airspace of a sanctioned country.

Question 27

Agricultural Products

Answer 27

Not to punish the population as a whole, food should not be used as a weapon laws may provide a broad exemption, or identify in detail which products are or are not exempt. Use of the exemption may also require the exporter to follow certain procedures, including how payment can be made.

Question 28

Medicine and Medical Products

Answer 28

Relevant sanctions program may describe in some detail what products, services, and technology benefit from the exemption.

Question 29

Licenses

Answer 29

Governments may decide to allow transactions that would otherwise be forbidden by sanctions. a license typically identifies who may perform the action; exactly what action may be performed (the sale of a particular product, the provision of services, etc.); who the product may be provided to; and how long the license is valid.

U.S. has two forms of licenses:
1. Specific - authorizes one transaction, or a series of transactions. The
license applies only to the products and parties identified in the license, and usually has a set period.
2. General - available to all parties meeting its conditions, and does not require an application. Can resemble an exemption, however unlike exemption general license may be valid only for a specific period. They can be revoked or change.

Question 30

Unintended Consequences of Sanctions

Answer 30

• Causing suffering to the population of the target country
• Providing an excuse for poor conditions by the government of the target country
• Loss of export markets and sources of supply in the sanctioning country.
• What entity within the United Nations imposes sanctions?

Question 31

UN Sanctions

Answer 31

~ Ability to impose economic sanctions (UN Charter Article 41)
~ Instrument to preserve peace without the need to resort to military force.
~ Targets have been primarily countries or individuals that threaten peace.

• Has sanctions organizations (e.g. Al Qaeda, ISIL(Da’esh) and Taliban)

Question 32

Different Forms of UN Sanctions

Answer 32

~ Broad range enforcement options that do not involve armed force
~ They are Comprehensive (economic and trade) and Targeted Measures.

Question 33

UN Has applied sanctions to…

Answer 33

Support peaceful transitions
Deter non-constitutional changes
Constrain terrorism
Protect human rights
Promote non-proliferation

Question 34

UN Types of Sanctions