International trade: sanctions

Modifications and operation of international sanctions

 

 

Yesterday, June 24, the US government imposed sanctions against the supreme leader of Iran, Ayatollah Ali Khamenei and eight Iranian military commanders. The news came as an alternative to the original retaliation that was to be carried out by the US after the downing of a US drone in the vicinity of Iran last week. The sanctions, approved by an executive order from the White House, directly affect Iranian leaders: from the freezing of any assets belonging to those sanctioned to the general prohibition of facilitating significant operations in financial institutions in other countries. To this battery of sanctions, we must add the total ban on the purchase of Iranian oil decided in April and the punishment in May for the industrial metals sector, which is the second largest source of export income after oil.

The recent news highlights the dynamism and constant changes in international sanctions. Another recent case is that on June 17 the sanctions imposed on the Maldives by the European Union were lifted. This is what the Council has communicated when considering an improvement in the political situation and respect for human rights.

Another clear example can be seen in the lifting of sanctions by the UN to Eritrea. Imposed since 2009, these sanctions were lifted by not finding conclusive evidence that this government supports terrorist groups and see how they were strangling the economy of the region, stagnating the economies of the Horn of Africa and further weakening the region. Following the UN the EU also lifted its sanctions on Eritrea. 

Operation of sanctions

Observing the effect and the causes for the imposition of international sanctions, we turn to see how these sanctions are imposed and withdrawn in the context of the European Union.

The procedure for adopting sanctions by the EU is as follows:

– It starts at the proposal of the High Representative for the EU for Foreign Affairs and Security Policy.

– The proposal is debated and studied by the different preparatory bodies (the Group responsible for the region of the country possibly sanctioned, the Group of Foreign Relations Advisers [RELEX] and the Public and Security Committee [CPS] and the Committee of Permanent Representatives [Coreper]).

– Once studied and debated, the Decision (CFSP) should be adopted unanimously by the Council.

– Based on this decision, the High Representative and the Commission will be able to present a joint proposal of Regulation, which will be analyzed by RELEX and sent to the Council and Coreper, who inform the European Parliament.

– The Regulations are approved by a qualified majority, thus becoming legal acts of general application and therefore binding any natural or legal person that they understand in their scope of application.

Both the CFSP Decision and the Regulation will be published in the Official Journal of the European Union as a requirement for its entry into force. In addition, the subjects subject to the sanctions will be notified by means of a letter or by means of an announcement published in the OJEU.

The sanctions of the EU will be applied by the authorities of its Member States, which will have to monitor compliance with the restrictions, establish internal sanctions in case of the violation of these and grant authorizations and exemptions when these are possible.

Member States should inform the Commission of the Application of Sanctions and liaise with the Security Council of the United Nations. 

Changes

The channels for modifying these sanctions will depend on who imposes them. If they are transposed directly from the UN Security Council, they will be modified or lifted in accordance with the decisions taken by the Security Council. In the case of mixed sanctions (which contain EU restrictions that extend those of the UN), the EU provisions will be reviewed at least once every 12 months. Finally, in the case of autonomous sanctions, the CFSP Decisions will normally be valid for a maximum of 12 months and will be extended periodically.

In order for this extension to take place, the Council will review the sanctions and take into account the requests for reconsideration (actions at the administrative level to request the lifting of sanctions through the presentation of legal and factual reasons to justify being excluded from the list of sanctions) of the affected parties or if their appeal for annulment prospers (action brought before the General Court of the European Union).

Conclusion

In view of what has been seen both in the recent news and in the way that the European Union has to regulate the imposition, modification and lifting of sanctions, we observe that these are measures that can be adopted, changed or suppressed quickly. However, they can have economic and social consequences not only for the States that suffer them but also for the general trade of the area.

Authors: Ana Camacho and José Luis Iriarte.

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