Basics: Trade Sanctions
May. 31, 2020 • Madhav Gawri
Introduction
International laws have a little binding effect on the states; thus, many countries have been observed using trade sanctions as a regular policy measure. It is indeed a widespread phenomenon that one may see in International Relations.
The United States Government has been a frequent user of Trade Sanctions. The United States had cut all trade relations with Cuba during the Cold because of its USSR relations and the close proximity of the nation to the USA.
Types of Trade Sanctions (On the Basis of the Entity Imposing It)
Trade sanctions may be imposed by an international organization or regional, or it may also appear in the form of an autonomous act of a state.[1] Accordingly, the former is only applied by multilateral organizations only when there is a threat to International Peace and Security while the latter may be used by one state on the other for political purposes, to punish the other state for what it thinks is an international law breach or for going against it stands on some particular dispute. The unilateral sanction which might be legal in the country which imposed it, such acts do not have any internationally binding obligation. Multilateral sanctions, on the other hand, are measures imposed to exert economic pressure within the multilateral organization system of collective security, which is binding upon all member states.[2]
One instance which might be noted in regard to unilateral sanctions is when India banned the trade of Palm Oil with Malaysia when India thought that the comments passed by the Malaysia Prime Minister in regard to Kashmir issue were not appropriate. On the other hand, one instance of sanctions imposed by multilateral organizations is the sanctions by the UNSC on North Korea as a result of it’s nuclear and missile activities in 2006.[3]
United Nation's Position Regarding the Validity of Trade Sanctions
According to Article 2(4) of the United Nations Charter, "All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations."[4] If we analyze this statement closely, we tend to come to go to the conclusion that trade sanctions are indeed the use of force, but they in no way threaten the political independence of another state. Hence, the United Nations Charter does not expressly prohibit the use of trade sanctions by one country against the other.
The United Nations Security Council also has the power to impose trade sanctions. The provisions empowering the exercise of such power are given under Article 39 and Article 41.
The Security Council has the power to determine the existence of any danger to the peace or act of aggression and may make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security.[5]
The Security Council may additionally decide what measures except for the use of armed forces to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. The UN charter authorizes UN to direct member states to complete or partial severe economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations with the offending entity.[6]
According to the voting rule of Article 27(3), any such determination, as well as any subsequent imposition of coercive measures under Article 41, requires an affirmative vote of nine out of 15 members, "including the concurring votes of the permanent members."[7]
The legality of Unilateral Trade Sanctions
As far as unilateral sanctions are concerned, developing countries have often criticized such tools as an infringement of their rights as an independent state as many developed countries many times use trade sanctions against them and upon the country often fall to their bait as they don't have such economic power to compete for the other, and often the more powerful countries end up having strategic stronghold over the weak counterpart. The United Nations General Assembly, too, passed a resolution in this regard, which calls upon all the member states to not recognize unilateral extraterritorial coercive economic measures or legislative acts imposed by any state and pushed efforts to move towards a non-discriminatory and open multilateral trading system.[8]
GATT prohibits the use of trade sanctions involving prejudice but provides for certain exceptional conditions under which the concerned country may use trade sanctions against the other. These exceptions are enshrined in Article 20 and 21 of the GATT, which provide legality to such sanctions when necessary to protect the essential security interests of the concerned state.
The Charter of Economic Rights and Duties mentions that “No State may use or encourage the use of economic, political or any other type of measures to coerce another State in order to obtain from it the subordination of the exercise of its sovereign rights.” [9]
Moreover, the United Nations General Assembly adopted the Declaration on Principles of International Law Concerning Friendly Relations and Cooperation among States in 1970 and reaffirmed nations their "duty not to intervene in matters within the domestic jurisdiction of any State,."
Conclusion
The use of coercive economic measures are a double-edged sword, with the potential both to resolve disputes and to trigger war[10]. In the new age multilateralism, states should choose a better approach and apply constructive measures to crack down on violators but, at the same time, respect the other entity's independence. The morality of such Trade sanctions is a question that will be left to the people to decide.
{Author’s Name: Harikesh Narang}
REFERENCES
[1] Matthew Happold,” Economic Sanctions and International Law: An Introduction” (2016) SSRN <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2837786 > accessed 22 May 2020
[2] Hans Kochler,”Sanctions and International Law”(2019) 14(3) IORJ <https://iorj.hse.ru/data/2020/03/11/1565702879/¦Т¦¦TБTВ¦-¦¬¦¦_2019_3_¦-¦-¦¦¦¬_19_02_20-25-45.pdf> accessed 23 May 2020
[3] 1718 Sanctions Committee (DPRK)
[4] United Nations Charter, Article 2(4)
[5] United Nations Charter, Article 39
[6] United Nations Charter, Article 41
[7] Hans Kochler,”Sanctions and International Law”(2019) 14(3) IORJ <https://iorj.hse.ru/data/2020/03/11/1565702879/¦Т¦¦TБTВ¦-¦¬¦¦_2019_3_¦-¦-¦¦¦¬_19_02_20-25-45.pdf> accessed 23 May 2020
[8] United Nations General Assembly Resolution A/RES/58/198
[9] The Charter of Economic Rights and Duties, Article 32
[10] Syed Ali Akhtar, " Do sanctions violate International Law" (EPW, 27 April 2019) <https://www.epw.in/node/154136/pdf>accessed 25 May 2020