ECONOMIC

SANCTIONS
ECONOMIC SANCTIONS
INTERNATIONAL TRADE
measures imposed by governments or
international organizations to restrict or
prohibit trade, financial transactions, or
other economic activities with a specific
country, entity, or individual. These
sanctions are typically used as a foreign
policy tool to achieve political, economic,
or security objectives by applying
economic pressure on the target.

2
ECONOMIC SANCTIONS
FOREIGN POLICY TOOL
Economic sanctions are often
used by governments as a
foreign policy tool to influence
the behavior of target
countries, entities, or
individuals. Sanctions can be
imposed to protest human
rights abuses, deter
aggression, address security
threats, or promote democratic
reforms.

3
DIPLOMATIC LEVERAGE

Economic sanctions provide

governments with diplomatic
leverage to negotiate desired
outcomes with target
countries. The threat or
imposition of sanctions can
compel target governments
to change their policies,
engage in diplomatic
negotiations, or comply with
international norms and 4
obligations.
NON-MILITARY COERCION

Economic sanctions offer a

non-military means of
coercion to address
international disputes or
conflicts. Instead of resorting
to military action,
governments may opt for
economic sanctions to exert
pressure on target countries,
reduce escalation risks, and
achieve desired objectives
through economic means.
5
INTERNATIONAL NORMS AND
VALUE

Economic sanctions are often

imposed to uphold international
norms, values, and principles,
such as human rights, democracy,
and non-proliferation. Sanctions
can signal disapproval of certain
actions or policies by target
countries and demonstrate
solidarity with affected
populations or oppressed groups.

6
ECONOMIC IMPACT

Economic sanctions can

have significant economic
consequences for the target
country, including reduced
trade, investment, and
access to financial markets.
Sanctions can disrupt
supply chains, hinder
economic growth, and
exacerbate poverty and
hardship among the affected
population. 7
GLOBAL TRADE AND SUPPLY CHAIN

Economic sanctions can affect global trade and

supply chains by restricting trade flows, disrupting
business operations, and increasing transaction
costs for companies operating in affected regions.
Companies may face challenges in sourcing
materials, accessing markets, and conducting
financial transactions in sanctioned countries. 8
EFFECTIVENESS AND
CONTROVERCY

The effectiveness of economic

sanctions in achieving their
intended objectives varies
depending on factors such as target
country resilience, international
cooperation, enforcement
mechanisms, and unintended
consequences. Sanctions can also
be controversial due to concerns
about their humanitarian impact,
effectiveness, and potential for
unintended consequences. 9
 INTERNATIONAL SANCTIONS
International sanctions are measures imposed by multiple countries or international organizations to restrict or prohibit economic
transactions with a specific country, entity, or individual. These sanctions can take various forms, including trade embargoes,
financial restrictions, arms embargoes, travel bans, and asset freezes. They are typically imposed to address concerns related to
national security, human rights violations, nuclear proliferation, terrorism, or other international disputes.

SIGNIFICANCE OF EXPORT CONTROLS

TRADE RESTRICTIONS:
International sanctions often include
trade restrictions that prohibit or
limit the import and export of certain
goods and services to and from the
sanctioned country. This can disrupt
supply chains by limiting access to
essential materials, components, or
finished products, affecting
production and distribution
processes.
SUPPLY CHAIN PARTNER SHIP:
Export controls regulate the export
of sensitive technologies,
intellectual property, and technical
data to prevent their unauthorized
transfer to foreign entities that
may use them for unauthorized
purposes or reverse engineering.
FINANCIAL TRANSACTIONS :
Sanctions may restrict financial transactions
with sanctioned countries, entities, or individuals,
including restrictions on banking services,
currency transactions, and access to
international financial markets. This can impede
the ability of companies to conduct financial
transactions related to supply chain operations,
such as payments to suppliers or access to
trade financing.
COMPLIANCE REQUIREMENTS:
Companies operating in regions subject to
international sanctions must comply with
complex regulatory requirements and sanctions
compliance programs. This may involve
conducting due diligence on supply chain
partners, screening transactions, and
implementing internal controls to ensure
compliance with sanctions regulations, adding
complexity and costs to supply chain operations.
TRANSPORTATION AND LOGISTIC:
Sanctions may restrict transportation and logistics
services to and from sanctioned countries,
affecting the movement of goods, raw materials,
and finished products. This can lead to
disruptions in transportation networks, delays in
delivery times, and increased transportation costs
for companies operating in affected regions.
REPUTATIONAL RISK:
Companies engaging in trade with
sanctioned countries or entities may face
reputational risks due to associations with
controversial regimes or activities subject to
sanctions. This can impact brand reputation,
customer relationships, and investor
confidence, leading to potential business
and financial repercussions.
TRADE SANCTIONS

are legal restrictions on trade with a

country. Trade sanctions are a
subcategory of economic sanctions,
which are economic penalties
imposed on a country to accomplish
policy goals beyond the sanctioned
economic activity 11
 TYPES OF TRADE SANCTIONS
EMBARGOES:
An embargo is the most
severe trade sanction, as a
general prohibition of most
trade with the sanctioned
country.
For example, the U.S.
maintains trade embargoes
against Cuba, Iran, North
Korea, Syria, and Russian-
occupied Crimea in Ukraine,
barring all imports and
exports without a license
authorization from the U.S.
government
EXPORT RESTRICTION:
including licensing requirements and
outright bans, typically target
advanced technology transfers to
government or private trade partners
in a sanctioned country. They often
target industries implicated in the
actions under sanction and others
considered particularly valuable to the
sanctioned country.
For example, in response to Russia's
invasion of Ukraine, the U.S.
government in February 2022
restricted U.S. exports to Russia as
well as third-party exports using U.S.
technology in semiconductors,
telecommunication, encryption
security, lasers, sensors, navigation,
avionics, and maritime
technologies.8 In March 2022, the
U.S. banned exports of oil and gas
refining technology to Russia and
imposed sweeping export restrictions
on Belarus for that country's role in
aiding the Russian invasion.
IMPORT RESTRICITONS: Import
restrictions and outright bans target the
import of products or services from the
sanctioned country. Proposals to ban
imports of Russian crude oil in response to
Russia's invasion of Ukraine shook global
energy markets in March 2022. Standing
European Union bans on imports of Syrian
weapons and Somali charcoal have
attracted less attention
TARIF QOUTAS: Because tariffs and
quotas limit trade but don't ban it entirely,
they are more often used to curb trade
flows out of economic motivations (such
as encouraging domestic employment,
for example) rather the for reasons of
foreign policy. U.S. use of tariffs as a
foreign policy tool expanded dramatically
during the Trump administration
THANK YOU