Economic Sanctions - Economic Sanctions Definition

Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted country, group, or individual. Economic sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions. Economic sanctions are not necessarily imposed because of economic circumstancesâ€"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.

Politics of sanctions

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 â€" 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.

Effectiveness of economic sanctions

Regime change is the most frequent foreign policy objective of economic sanctions. 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 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%.

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.

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".

Current sanctions

By targeted country

• Sanctions against Guatemala
• Sanctions against Iran
• Sanctions against Burma - the European Union's sanctions against Burma (Myanmar), based on lack of democracy and human rights infringements.
• Sanctions against 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.
  • United Nations Security Council Resolution 1718 (2006) - a reaction to the DPRK's claim of a nuclear test
• Sanctions against Russia
  • International sanctions during the 2013â€"15 Ukrainian crisis

By targeted individuals

• List of individuals sanctioned during the 2013â€"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 country

• 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 activity

• 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.
• 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 disputes

• Vietnam as a result of capitalist influences over the 1990s and having imposed sanctions against Cambodia, is accepting of sanctions diposed with accountability.
• 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.

Former sanctions

• 2006â€"07 economic sanctions against the Palestinian National Authority
• Sanctions against Iraq (1990-2003)
• Disinvestment from South Africa
• ABCD line, Japan pre-WWII