Why the regulation of sanctions matters?  

News: Recently, the western countries have mulled to increase the height of their economic sanctions on Russia. This has been because a series of suspected war crimes in the Ukrainian town of Bucha has been discovered.

There are apprehensions that Russia may undertake new offensive measures in coming period. In this regard, the sanction regime has come into limelight. 

What are the impacts of the sanctions? 

A sanction can be defined as “a measure of coercion of an economic nature as opposed to diplomatic or military coercion”. Such measures may include complete or partial embargoes like trade, travel, financial transactions, freezing financial assets etc. 

These measures can have a huge impact on human rights and populations of the target country. In addition, the sanctions also lead to serious medium-term impact on the very countries which issued because of the globalised economy.  

Who can impose sanctions? 

The sanction can be individual sanction (For example, the US sanctions) or collective sanction (For example, by the UN or the European Union).  

(A) The UNSC Collective sanctions can be taken while adhering to a strict procedure mentioned below:  

(1) First the “existence of any threat to peace, breach of the peace, and an act of aggression’ needs to be determined” (Article 39).  

(2) Second, complete or partial interruption of economic relations can be undertaken under sanctions. They can be related to rail, sea, air, postal, telegraphic, radio, and other means of communication. It may include the severance of diplomatic relations. However, the “use of armed force” is not allowed under these measures (Article 41) 

Since 1966, the UNSC has adopted 30 regimes of sanctions. At present, 14 are operational. They are administered by a sanctions committee chaired by a non-permanent member of the UNSC. In addition, the EU has imposed 30 sanctions regimes so far. 

(B) The individual sanctions: The International trade agreements such as GATT, GATS, and TRIPS along with a number of bilateral investment treaties allow economic sanctions for security reasons. 

What are the issues with the individual sanctions? 

Hence, unilateral individual sanctions have no legal basis in a treaty. They goes out of the jurisdiction as they are clearly extraterritorial in nature.  

These unilateral sanctions are called “countermeasures” in the language of the International Law Commission. 

The sanctions affect private actors and also lead to significant economic harm and disruption in supply chains.  

The individual sanctions are narrower in scope. They cannot be imposed in cases other than security concern. In WTO disputes ‘Russia – Measures Concerning Traffic in Transit’ (DS 512) and ‘Saudi Arabia – Protection of IPRs’ (DS567), it was declared that these measures are partially justiciable. 

In fact, these sanctions have been declared ambiguous and illegal by the international tribunal (here ICJ). For example, The US sanctions in the Nicaragua case, and the U.K. sanctions in the Bank Mellat case as it incurred a lot of damage to an Iranian bank. 

Ways Forward 

There is a need to regulate and monitor the use of this political tool for economic warfare. 

The UN has appointed a Special Rapporteur on the negative impact of the unilateral coercive measures on the enjoyment of human rights.  

The individual sanctions must at least a case be properly notified and basic legal due process should be followed.  

Source: The post is based on an article “Why the regulation of sanctions matters?” published in the Hindu on 11th April 2022.