Economic Sanctions and International Law
“Modern-day economic sanctions and blockades are comparable with medieval sieges of towns … Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees.”
Prof. Dr. Alfred de Zayas
(American lawyer, writer, historian, and Former special UN Rapporteur)
With the success of comprehensive financial sanctions against Iran over nuclear proliferation during the Obama administration, policymakers in Washington have grown more confident that economic sanctions are potent instruments for inducing concessions from hostile countries. The growing belief in the effectiveness of coercive economic instruments has increased the prevalence of sanctions and made them the primary instrument for the Trump administration. Whether in Iran, Venezuela, Cuba, North Korea or one of the 20 countries under the boot of US sanctions, the Trump administration is using its economic weight to try to exact regime change or major policy changes in countries around the globe.
Military might may be the most potent weapon in the arsenal of the United States, however, sanctions have once again – after a brief lull following the politically-disastrous grain embargo and pipeline sanctions in the early 1980s – become the weapon of choice to enforce a myriad of US foreign policy goals, from countering terrorism to battling drug trafficking. President Donald Trump has based his foreign policy on a series of harsh economic sanctions, each designed to frighten, coerce and even starve the target country into submitting to American demands. The US Treasury identifies 30 active sanctions programmes that include, according to one estimate, 7,967 operating sanctions. While the practice is less violent than a military attack, the consequences are often dire for civilian populations. As such, economic sanctions by the United States should be scrutinized by the United Nations Security Council under international law and the UN Charter.
When Trump campaigned for office in 2016, he rejected the frequent US resort to war in the Middle East. During the years between 1990 and 2016, the US launched two major wars with Iraq (1990 and 2003), as well as wars in Afghanistan (2001), Libya (2011), and Syria (2012). It also participated in many smaller military interventions (Mali, Somalia, and Yemen, among others). While the Syrian War is often described as a civil war, it was, in fact, a war of regime change led by the US and Saudi Arabia under a US presidential directive called Timber Sycamore. However, none of these US-led wars could achieve the political objectives, and the major conflicts have been followed by chronic violence and instability. The attempt to oust Syria’s Bashar al-Assad from power led to a proxy war – eventually involving the US, Syria, Russia, Saudi Arabia, Qatar, Iran, Turkey, Israel, and the United Arab Emirates – that displaced over ten million Syrians and caused around a half-million violent deaths.
While Trump has so far eschewed a new war, he has continued US regime-change efforts by other means. Trump is often called an isolationist, but he is as interventionist as his predecessors. His strategy, at least so far, has been to rely more heavily on US economic power than military might to coerce adversaries, which creates its own kind of cruelty and destabilization. And it constantly risks flaring into outright war, as occurred with Iran this month.
The Trump administration currently is engaged in three attempts at comprehensive economic sanctions, against North Korea, Venezuela, and Iran, as well as several lesser sanctions against countries such as Cuba and Nicaragua, and an intensifying effort to cut off China’s access to technology. The sanctions against North Korea are sanctioned, at least in part, by the UN Security Council, the one against Iran is in direct opposition to the UNSC, and against Venezuela it is so far without Security Council engagement. The US is attempting to isolate the three countries from almost all international trade, causing shortages of food, medicines, energy, and spare parts for basic infrastructure, including the water supply and power grid.
In North Korea, many decades of sanctions, coupled with extended periods of drought, have left millions of the nation’s 25 million people malnourished and impoverished. Rural areas in particular lack medicine and clean water. Even more stringent sanctions imposed in 2018 banned most of the country’s exports, reducing the government’s ability to pay for imported food to alleviate the shortages. Sanctions on North Korea operate mainly through UN-mandated sanctions, and include a comprehensive list of exports to and imports from North Korea, and financial relations with North Korean entities. The UN Food and Agriculture Organization (FAO) recently reported that ten million North Koreans were at risk of hunger, partly owing to sanctions. “[T]he unintended negative impact sanctions can have on agricultural production, through both direct and indirect impacts, cannot be ignored,” the FAO warned. “The most obvious are restrictions on the importation of certain items that are necessary for agricultural production, in particular fuel, machinery and spare parts for equipment.”
The draconian US sanctions on Venezuela have come in two phases. The first, beginning in August 2017, was mainly directed at the state oil company PDVSA, the country’s main earner of foreign exchange; the second round of sanctions, imposed in January 2019, was more comprehensive, targeting the Venezuelan government. A recent detailed analysis of the first round of sanctions shows their devastating impact. The US sanctions gravely exacerbated previous economic mismanagement, contributing to a catastrophic fall in oil production, hyperinflation, economic collapse (output is down by half since 2016), hunger, and rising mortality.
US sanctions against Iran have been in place more or less continuously since 1979. The most recent and by far most draconian measures, introduced in August 2018 and intensified in the first half of this year, aim to cut Iran off from foreign trade. The US sanctions are in direct contravention of UN Security Council Resolution 2231, which endorsed the 2015 nuclear agreement with Iran. The effects have been devastating. The International Monetary Fund forecasts that Iran’s economy will shrink by 10% between 2017 and 2019, with inflation reaching 30% this year. Medicines are in short supply.
One might expect that other countries would easily circumvent US sanctions. But the US has threatened to punish foreign companies that violate the sanctions and has used the dollar’s global clout as a bludgeon, threatening to sanction foreign banks that finance trade with Iran. European companies have fallen into line, despite the European Union’s express desire to engage economically with Iran. Over the longer term, it is likely that more ways will be found to circumvent the sanctions, using renminbi, ruble, or euro financing, yet the erosion of US sanctions will only be gradual.
Despite the intense economic pain – indeed calamity – inflicted on North Korea, Venezuela, and Iran, none of them has succumbed to US demands. In this sense, sanctions have proved to be no more successful than military intervention. North Korea has maintained, and most likely is expanding, its nuclear arsenal. The Iranian regime rejects US demands concerning its missile program and foreign policies. And Venezuela’s President Nicolás Maduro remains in power.
The US sanctions have been carried out by presidential decree, with almost no public debate and no systematic oversight by Congress. This has been a one-man show, even more so than in the case of president-led wars, which trigger vastly more public scrutiny. Trump realizes that he can impose crippling sanctions abroad with almost no direct costs to the US public or budget, and with virtually no political accountability.1
Military sanctions are acts of war, and therefore subject to international law, including UN Security Council oversight. America’s economic sanctions are similar in function and outcome to military sanctions, with devastating consequences for civilian populations, and risk provoking war. It is time for the Security Council to take up the US sanctions regimes and weigh them against the requirements of international law and peacekeeping.
What are economic sanctions?
Economic sanctions are defined as the withdrawal of customary trade and financial relations for foreign and security policy purposes. They may be comprehensive, prohibiting commercial activity with regard to an entire country, like the long-standing US embargo of Cuba, or they may be targeted, blocking transactions of and with particular businesses, groups, or individuals. Governments and multinational bodies impose economic sanctions to try to alter the strategic decisions of state and non-state actors that threaten their interests or violate international norms of behaviour. Sanctions take a variety of forms, including travel bans, asset freezes, arms embargoes, capital restraints, foreign aid reductions and trade restrictions. National governments and international bodies like the United Nations and European Union have imposed economic sanctions to coerce, deter, punish, or shame entities that endanger their interests or violate international norms of behaviour. They have been used to advance a range of foreign policy goals, including counterterrorism, counternarcotics, nonproliferation, democracy and human rights promotion, conflict resolution, and cybersecurity.
Critics say sanctions are often poorly conceived and rarely successful in changing a target’s conduct, while supporters contend they have become more effective in recent years and remain an essential foreign policy tool. Sanctions have become the defining feature of the Western response to several geopolitical challenges, including North Korea’s nuclear program and Russia’s intervention in Ukraine.
Economic Sanctions and Just War Theory
A vast majority of writers points to the analogies between economic sanctions and war and use just war theory as a framework within which to assess their moral permissibility. Some extend the framework only to collective, comprehensive economic sanctions while others extend it to all types of economic sanctions.
Just war theory is split into two parts: jus ad bellum, which sets out the principles that must be followed for the resort to war to be just and jus in bello, which sets out the principles that must be followed during war. Those writers who employ just war theory as a moral framework believe that these principles of just war theory can be appropriate as a moral framework for economic sanctions as follows. There are six principles of jus ad bellum. For the resort to war to be just, all six conditions must be met.
Just Cause: There must be a just cause for war. In mainstream just war theory, just cause is limited to: (1) the defence of a state from an actual or imminent military attack; and (2) humanitarian intervention in cases where a state is committing extremely serious human rights violations against its own citizens.
Proportionality: The harm that will be caused by the war must not be disproportionate to the good that it is hoped will be achieved. For economic sanctions, this principle is met if the good achieved by the sanctions is expected to outweigh the harms of those sanctions.
Right Intention: The decision to go to war must be made with the right intention—the intention to achieve the just cause. The just cause must not be a pretext for some unjust end that is secretly intended. Therefore, economic sanctions must be imposed with the intention of defending a state from attack or stopping/reducing human rights violations.
Legitimate Authority: The decision to go to war must be made by a legitimate authority. That is, one which has the moral right to act on behalf of its people and take them into a war. In international law there is a presumption that the governments of all states are legitimate authorities.
Last Resort: War must be the last resort. Given the horrendous harms it creates, war must be necessary in order to be just. If other, less harmful, alternatives are available such as economic sanctions or diplomatic measures, then war is not necessary and therefore not just.
Reasonable Chance of Success: There must be a reasonable chance of success. This is to prevent hopeless wars where people die pointlessly. This condition is particularly pertinent for economic sanctions.
Discrimination: The principle of discrimination requires attackers to distinguish between two classes of people in war: combatants and non-combatants, and stipulates their different treatment. In the case of economic sanctions though, who are the equivalent of ‘combatant’ and ‘non-combatant’? Albert C. Pierce argues that the individuals falling into the class of ‘combatants’ are those who are actually part of the causal chain of events that led to the objectionable or unlawful policy: those who planned and organised it, and those who are carrying it out.
The just war framework leads them to conclude that collective sanctions are always impermissible because they violate the just war principle of discrimination. Pierce, Winkler and Amstutz further extend the use of just war principles to targeted economic sanctions and conclude that targeted economic sanctions that do not harm ‘non-combatants’ may be morally permissible because it is at least theoretically possible that they can meet all the just war principles. This would appear to be a neat solution to the issue of the ethics of economic sanctions. However, there are objections to this approach.
Seven key misconceptions about economic sanctions
High failure rate of economic sanctions in the past suggests that governments often use flawed arguments to justify imposing sanctions, tainting our understanding of their rationale and effectiveness. Seven misconceptions or fallacies stand out bad each needs to be debunked.
First, sanctions are justified as a gentler and more humane alternative to war. But this underestimates the potential for international diplomacy to resolve conflicts. And in reality, sanctions often pave the way for wars rather than averting them: 13 years of international sanctions against Iraq were followed by the 2003 US-led invasion, for example.
A second argument is that “if sanctions are hurting, they must be working.” But this criterion of effectiveness fails to define what would constitute success. Worse, it flies in the face of evidence suggesting that – even when essentials such as food and medicine are excluded – sanctions hurt large swaths of the civilian population. They stymie economic growth, undermine production, and cause businesses to fail, resulting in higher unemployment. Sanctions can also fuel inflation by restricting imports and fueling currency crises.
Third, sanctions are often said to be “smart” and “targeted.” In practice, however, comprehensive economic sanctions are collective punishment. They squeeze the middle classes and impose a disproportionate burden on the poorest and most vulnerable, who are arguably the biggest victims of the very regimes that sanctions are designed to punish.
Fourth, some governments justify sanctions as a way to uphold and promote human rights. But evidence suggests that civil-society entities and NGOs are generally among the biggest losers under sanctions. By portraying sanctions as foreign aggression and economic warfare against their country, authoritarian regimes often accuse human-rights activists of being allied with the enemy. From there, it’s a short step to a national-security crackdown on such organizations.
A fifth claim is that sanctions are necessary and effective in bringing about regime change. The cases of South Africa and Zimbabwe notwithstanding, this is probably the weakest of the seven arguments – as the longevity of sanctioned regimes in countries such as North Korea, Cuba, and Myanmar indicate. Even the blockade imposed on Qatar by Saudi Arabia, UAE, Bahrain, and Egypt since June 2017 has boosted the emir’s popularity and led a significant part of the population to rally behind him.
Sixth, sanctions are said to weaken the targeted governments. But by worsening the business and investment climate, economic sanctions take their toll primarily on the private sector. If anything, power becomes more centralized and concentrated as governments increasingly control supplies of strategic commodities given the shortages they cause.
Finally, sanctions are supposedly effective in containing nuclear proliferation. Here, too, their record is demonstrably poor. Since the Non-Proliferation Treaty entered into force in 1970, four countries have acquired nuclear weapons: Israel, India, Pakistan, and North Korea. Three of them did so while under sanctions.
Ultimately, the success or failure of economic sanctions is judged by whether they bring about regime change or change a government’s behavior. Given the prevailing misconceptions about their rationale, it is not surprising that they so often achieve neither goal. What is more certain is that destabilizing Iran will make the region more dangerous than ever.