2. Sanctions Imposers and Targets: The International Arena

Question 1

What gives the UN the ability to impose economic sanctions?

Answer 1

UN Charter’s Article 41 - which gives the Security Council of the UN the ability to impose sanctions.

*Multilateral Sanctions
*Measures not involving Military Force
*It calls on the Members of the UN to apply the measures.

*Complete or partial interruption of economic relations (imports, exports, investments) and of rail, sea, air, postal, telegraphic, radio and other means of communications, and the severance of diplomatic relations

Question 2

What is the primary mission of the UN?

Answer 2

To perserve world peace without using military force. Prevent a world war.

Question 3

Who have been the targets of UN Sanctions?

Answer 3

Its primary targets have been countries or individuals that threaten peace. They have also sanctioned organizations like Al Qaeda, ISIL (Da’esh), and the Taliban

*They’ve imposed 31 cases of sanctions - only 14 are current.
*Their sanctions go in and out of effect.

Question 4

What types of sanctions can the UN impose?

Answer 4

Can use all the types of sanctions the US impose. They are broad range that don’t involve armed forces.

They can take the form of Comprehensive economic and trade sanctions as well as targeted measure (mostly targeted measures is used).

*The UN applied sanctions to:
Support peaceful transitions
Deter non-constitutional changes - stop coups
Constrain Terrorism
Protect Human Rights
Promote non-proliferation.
Narcotics Trafficking
Support of Democracy

Question 5

What are the current sanction methods the UN employes?

Answer 5

~ Travel bans;
~ Asset freezes;
~ Arms embargoes;
~ Bans on trade in certain commodities, such as diamonds, timber, petroleum, and charcoal;
~ Bans on exports of certain items to the country;
~Bans on imports of selected items from the country;
~ Restrictions on exports to the country of goods and technology related to nuclear, ballistic missiles and other weapons of mass destruction; and
~ Bans on the export of certain luxury goods.

Question 6

Why might the UN impose sanctions and to who?

Answer 6

UN can designate entire countries, individuals and entities, and/or Groups (e.g. Taliban).

Question 7

What happens when the UN designates someone?

Answer 7

They get added to the UN’s Consolidated List which identifies the the target and what the sanctions imposed is.

List has two sections:
1. Individuals (709)
2. Entities and groups (315 entities)
3. Does not imply all names are listed under one regime nor that the criteria for listing is the same.
4. Provided in .xml, .html & .pdf formats
5. Member states have to implement, although how they do so differs (could be manual in nature).

*Member states should incorporate the UN lists to their local laws lists - so if UN list updated they have the most current.

Question 8

What are the types of designations the UN imposes?

Answer 8

§ Threats to peace, security or stability;
§ Violations of human rights and international humanitarian law;
§ Obstructing humanitarian aid;
§ Recruiting or using children in armed conflicts;
§ Targeting civilians including killing and maiming, sexual and gender-based violence, attacks on schools and hospitals,
and abduction and forced displacement;
§ Engaging in illegal trade in natural resources;
§ Violations of arms embargoes;
§ Acts or financing of terrorism;
§ Engaging in or providing support for nuclear, weapons of mass destruction and/ or ballistic missile programs and
policies.

Question 9

How does imposing sanctions by the UN work in practice?

Answer 9

It is very Bureaucratic in nature.

1. The Security Council takes up a concern
2. The Security Council considers a resolution (for imposing sanctions and creates a sanctions program)
3. The resolution specifies the measures to be put in place
4. Resolutions are subject to Veto by any of the permanent members of the UN
5. If passed, the resolution will establish a committee to over see the sanctions program
6. The sanctions are implemented by the Member States.

Question 10

Who carries out the actual work with respect to a UN/Security Council sanctions program?

Answer 10

The Committees.

They implement, monitor and provide recommendations to the UN Security Council (UNSC) on particular sanctions regimes.

Ea. Committee is chaired by a non-permanent member of the UNSC.

The Committees meet with the Member States and Internal Organizations.

The Committees identifies exactly who is subject to sanctions.

The Committee may request advice and meet with a Panels of Experts that support the work of the committee.

*Note: In some cases the UNSC creating the sanctions program may identify individuals or groups subject to sanctions but mostly is the Committee.

Question 11

What are some key points to remember regarding the implementation of UN Sanctions?

Answer 11

1) The UN Sanctions do not automatically go into effect in individual countries.
2) UN had no independent mechanism for enforcing sanctions.
3) UN Sanctions must be implemented by individual member states.
4) Most UN Members have a process to include UN Sanctions and new designations into their national law.
5) This typically requires the enactment of legislation or regulation that adopts the UN Sanctions

Question 12

How do you read UNSC Resolutions?

Answer 12

1) Break it up into sections - Preamble/Decisions
~ Preamble (Introduction)
~ Decision - (what the security council is trying to do)

2) Distinguish terms like reaffirms, recalls, urges, or decides. These can different effects.
~Terms like directs, authorizes and decides may require action.
~ “Acting” - this is where it starts what the SC is asking its members states to do.
~ “Authorizes” - The SC is requesting, allowing or enabling member states to do something.

3) The resolution are seldom self contained unless there is a new resolution. So you will have to look at earlier resolutions in the same sanctions program to understand the current resolution.

Question 13

Does the UN Security Council have a process for delisting organizations or individual from their Consolidated List?

Answer 13

Yes, when conditions change the Security Council can delist targets in two ways:

1) Specific “Focal Point for De-Listing” - Organizations & Individuals can request to be delisted this also includes request for exemptions from Travel bans and asset freeze from ISIL (Da’esh), Al-Qaida & Taliban. Why? Fair and Clear procedures for when there are changes, mistakes, humanitarian exemptions etc..

2) Office of the Ombudsman - Only for delisting request from individuals and entities on the ISIL (Da’esh) and Al-Qaida and the Taliban Sanctions lists.
~ Independent & Impartial
~ Appointed by the Secretary-General

• 1 & 2 do the same thing but in different circumstances
  *USNC adopted this resolution 1730 on 12/19/2006

Question 14

What are the Key objectives of EU Sanctions?

Answer 14

~ Multilateral Sanctions
~ Safeguarding EUs values, interests & Security
~ They want to perserve peace
~ Consolidating and supporting democracy, rule of law, human rights and international law.
~They want to prevent conflicts and strengthen International security.

*Economic Warfare - Prevent World Wars

Question 15

How does the Common Foreign and Security Policy (CFSP) work and maintained?

Answer 15

1) EU applies the Sanction within the CFSP framework.

~ EUs external action service helps the High Representative (HR)
~ Then the High Representative for Foreign Affairs and Security policy carries out the EU CFSP
~ the tool to do this is the restrictive measures of Sanctions (are either diplomatic or economic in nature)
~ With the restrictive measures the EU can Influence Policy that violates laws and human rights

Question 16

What is the legal basis for the EUs restrictive Measures?

Answer 16

Article 215 Chapter 2 of the Title V of the Treaty on European Union.

The European Council can adopt restrictive measures.

Question 17

What are the three types of Sanctions the EU can adopt?

Answer 17

1. UN Sanctions,
2. EU Sanctions that are more restrictive than the UNSC and
3. EU can adopt it’s own Autonomous Sanctions

Question 18

Who is the main body in the EU that says something needs to be a restrictive measure (sanctions)?

Answer 18

The European Council - defines the EUs overall political direction and priority. Set’s the EU policy agenda. Identifies issues of concerns and action to take. Members of the European Council are the Heads of States.

*Council of the EU (“the council) gov’t ministers for ea. EU country meet and discuss - together with the European Parliament - they are the main decision making body of the EU.

Question 19

How does the EU adopt Sanctions (aka Restrictive Measures)?

Answer 19

1. The High Representative (HR) can proposal the restrictive measures alone or in joint withe HR and the European Commission.
2. The European Council (‘the council - the ministers) passes it into EU Law
3. The Council informs the European Parliament
4. European Parliament does not have to approve
5. When approved, Council decision is published and enters into force.

*Arms Embargoes and Visa Bans are not the responsibility of the EU but must be implemented by member states individully.

Question 20

How do restrictive measures (sanctions) take form?

Answer 20

By the form of a Council Decision, which contains:
~ The target (country, individual, or entities)
~ Reasons for the measure
~ The direction the Member States needs to take to implement and enforce
~ A detailed description of the measures
~ Any exceptions that may apply
~ The procedure for imposing the measure and any additional persons or entities

Question 21

How are the restrictive measures implemented?

Answer 21

After the Council adopts the CFSP Decision, it can be implemented in two ways:

1. National Level - Measures like arms embargoes or admission are implemented directly by the Member States which are legally bound to act in conformity to the CFSP Council Decisions.
2. EU Level - Measures that interrupt, reduce or in part or completely, economic relations with a third country, freezing funds and economic resources are implemented by a Regulation that is adopted by the Council.
3. The Commission assists the Member countries in correctly implementing all EU Laws
4. If member states fail to comply then an infringement proceeding is initiated which goes to the European Court of Justice.

*Regulations (implementing sanctions) are binding and directly applicable throughout the EU

Question 22

What are the types of EU Sanctions?

Answer 22

1) Arms Embargoes
2) Travel Bans
3) Economic measures
4) Financial Measures

Question 23

What are the EU Sanctions on Arms Embargoes?

Answer 23

Prohibit the sale of weapons and related services to restricted Individuals, groups or states.

“Arm” definition is broad - it includes:
~ weapons and ammunition, military vehicles and equipment, paramilitary equipment, and spare parts.
~ technical assistance and brokering services related to arms sales; the provision, manufacture, maintenance, or use of arms and related materials; and financing of such transactions.
~ May also impose a ban on the export of equipment which might be used for internal
repression.
~ May ban the export of dual-use goods, services, or technology when they are intended of military use.
~ Taking steps to circumvent an arms embargo is prohibited.

§ There may be exemptions, such as arms supplied to the legitimate government or UN peacekeeping forces.

Question 24

What are the EU Sanctions on Travel Bans?

Answer 24

Restrictions or prohibitions on travel by designated individuals to the EU.

“Members state will take the necessary action to prevent entry into, or transit through, their territories of designated targets.

• Member states are not required to deny entry to their own nationals because they control their own immigration.

** Action by each member is required to implement travel bans.

Question 25

What are the EU Sanctions on Economic Measures?

Answer 25

Restrictions or prohibitions on Imports and Exports of goods and services (can include technology) to countries, entities, or individuals.

• a total ban on all imports or exports is referred to as an embargo (more commonly though, only goods or services are affected).

Trade Restrictions - normally prohibit financing, brokering and insuring trade in the goods as well as services associated w/them, such as custom clearance, telecommunications services.

• Restrictions may target an entire country, a region of the country, a sector of the economy, or specific individuals and organizations.

Question 26

What are the EU Sanctions on Investment and Transportation?

Answer 26

Less common type of sanction

Prohibits and restricts on Investments:
~ Target specific sections (e.g. real estate, energy or nuclear power)
~ May prohibit investments by nationals from a target country in designated sectors of the EU economy (e.g. nuclear power or arms)
~ Restriction on investments can apply to provision of investment services.

May impose direct restrictions on trade and transportation:
~ Prohibit use of EU-registered aircrafts or vessels for trade with the country.
~ Transit through or export from the EU of goods or services that are not of EU origin
~ Denial of the right of vessels or aircraft from a target country to use EU ports or airports.
~ Prohibiting EU nationals from leasing vessels or aircraft to nationals of the target country.

Question 27

What are the EU Sanctions on Financial Measures?

Answer 27

~ Prohibit financial measures with the target (individuals or entities)
~ May require freezing of assets
~ The Council may require “all funds/economic resources” belonging to, owned, held or controlled by the target frozen

*Economic resources is broad - can include anything of value, “‘assets of every kind, whether
tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services.”

Examples of funds and resources include:
~ Cash, checks, claims on money, drafts, money orders and other payment instruments;
~ Deposits with financial institutions or other entities, balances on accounts, debts and debt obligations;
~ Publicly- and privately-traded securities and debt instruments, including stocks and shares, certificates
representing securities, bonds, notes, warrants, debentures and derivatives contracts;
~ Interest, dividends or other income on or value accruing from or generated by assets;
~ Letters of credit, bills of lading, bills of sale; and
~ Documents evidencing an interest in funds or financial resources.

*Basically anything of economic value

Question 28

Can the EU impose “Targeted” Financial Measures?

Answer 28

Yes, they can target some types of financial transactions, specifically:
~ Prohibit all transfers of funds to or from the target country.
~ May also limit other types of banking transactions, the provision of insurance and remittance, and trade in bonds and equity, as well as transferable securities and money market instruments.

Even more targeted type of financial transactions “Sectoral Sanctions” (which are broader than US)
~ Prohibit EU nationals from buying, selling or trading in transferable securities, money market instruments, or equity of certain Russian banks and energy companies.

• For sectoral sanctions only the “designated” types of transaction are banned; all other transactions are legal.

Question 29

Can EU Sanctions Freeze Assets of a target?

Answer 29

Yes, they can require that funds and economic resources belonging to or controlled by a target be frozen.
~ Frozen funds must be placed in a blocked account
~ Cannot be released w/out permission of the relevant national authority
~ There are specific circumstances target can access funds - pay for living expense (these would be provided in the decision of the sanction)

May also prohibit an EU person from making any economic resources available to the sanctioned party.

Question 30

What are the Exceptions to EU Sanctions?

Answer 30

Licenses

~ The competent national authority can issue licenses authorizing transactions that would normally be prohibited.

~ In asset freezes - the authority may allow release of funds for certain basic purposes:
~ food, housing, medicine, medical care, insurean premiums and utilities
~ payment of legal fees
~ payment of certain claims following a deciison by judicial or arbitral authority.

National Authorities my also authorize other prohibited transactions such as exports of goods or services, depending on the national law.

Question 31

Who must comply with EU Sanctions

Answer 31

~ Anyone within the jurisdiction (territory of the EU)
~ Anyone on aircrafts, vessels under member states jurisdiction
~ EU nationals in any location
~ Companies and organizations incorporated under the law of a member state - including
branches of EU companies in third countries
~ Anyone and any company or organization when conducting business within the EU.

Question 32

Who are the EU restrictive measures directed to?

Answer 32

~ Named individuals and entities
~ Entities may include companies as well as organizations (e.g. Al Qaida)
~ May even direct sanctions against vessels, by “freezing” them - i.e. prohibiting any transaction involving them.

Question 33

What happens when the EU Council designates someone?

Answer 33

They get added to the EU Consolidated List.

List has persons, groups and entities subject to restrictive measures (sanctions).
Can be found in EU website

*Individual Members State can have their own local list in addition to the EU Consolidated List.

Question 34

How does the EU Listing process work?

Answer 34

1) The Council makes a decision
2) All decision are published in the EU Official Journal
3) And a notification is sent to the target through a letter - if address is available.

Question 35

How does the EU “Delist” a target?

Answer 35

~ Targeted Persons and entities can request to be delisted by applying to the appropriate committee.

~ They can also seek legal redress through national courts or the EU Court of First Instance
~ While the courts can review the legal criteria for listing a target., they cannot second guess the political decision to add a person to the sanctions list.

*Delisting whenever the criteria of “listing” are no longer met

Question 36

What are EU Member States Own Lists?

Answer 36

~ Individual Member states can maintain their own sanctions lists. Which can include additional names.
~ Member states can request persons or entities to be added to the EU list.
~ the proposal is submitted for review by the EU Presidency.
~ Non-EU members can request designation
~ Request has to be supported by credible evidence.

Question 37

What is another situation where an EU sanction can apply?

Answer 37

When ownership interest of more than 50% (50% or more) even if they are not designated separately.

The same applies to entities that are controlled by a sanctioned person.

Question 38

What are some factors of “Control”?

Answer 38

~Havingtherightorexercisingthepowertoappointorremoveamajorityofthemembersofthe
entity’s administrative, management or supervisory body;
~Havingappointedsolelyasaresultoftheexerciseofone’svotingrightsamajorityofthemembersof the administrative, management or supervisory bodies of the entity in the present and previous financial years;
~ Controlling alone, pursuant to shareholder agreement, a majority of shareholders’ or members’ voting rights;
~ Having a legal right to exercise a dominant influence over the entity;
~ Having the right to use all or part of the assets of a legal person or entity;
~ Managing the business of an entity on a unified basis, while publishing consolidated accounts;
~ Sharing jointly and severally the financial liabilities of the entity, or guaranteeing them.

Question 39

Who can “Enforce” and issue “Penalties” for `EU Sanctions?

Answer 39

The Member States

*For any Member State there can be a relevant National Supervisory that administers and enforces the Sanctions.

** Penalties depend on local law of the member state.

Question 40

What guidance did the EU give on how to comply with the EU Sanctions?

Answer 40

Its called the EU Internal Compliance Program for Dual-Use Controls - Issued 2019 and had 7 Essential Elements:

1) Top-Level Mgmt commitment to compliance
2) Organization structure, responsibilities and resources
3) Training and awareness raising
4) Transaction screening process and procedures
5) Performance review, audits, reporting and corrective actions
6) Record-keeping and documentation
7) Physical and information security

*How you comply with sanctions is a huge deal