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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY
VISAKHAPATNAM, A.P., INDIA
TITLE OF THE PROJECT
VALIDITY OF ECONOMIC EMBARGOES UNDER INTERNATIONAL TRADE LAW
SUBJECT
INTERNATIONAL TRADE LAW
NAME OF THE FACULTY
VARSHITA MANGAMOORI
Name of the Candidates U.UPENDRA
Roll No. 2016112
Semester VII
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ACKNOWLEDGEMENT
I would sincerely like to put forward my heartfelt appreciation to our respected professor,
Varshita madam for giving me a golden opportunity to take up this project. I have tried my best
to collect information about the project in various possible ways to depict clear picture about the
given project topic.
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RESEARCH METHODOLOGY
This project is purely Doctrinal and based on primary and secondary sources such as websites,
books, journals and internet sources. The referencing style followed in this project is BLUE
BOOK 19th Edition's format of citation. This Research process deals with collecting and
analyzing information to answer questions. The Research is purely descriptive in its boundaries
of the topic
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CONTENTS
INTRODUCTION…………………………………………………………………….………..05
UN SANCTIONS……………………………………………………………….
……………….06
NON-UN SANCTIONS………………………………………………..….……………………07
EMBARGO………………………………………………………………………….……..08 -10
US EMBARGO OF 1807……………………………………………………………………….10
US EMBARGO OF CUBA…………………………………………………...…………….10
-12
UNITED STATES - RESTRICTIONS ON IMPORTS OF TUNA……………………..12 -13
US-SHRIMP CASE…………………………………………………..……………………..14
-16
MEASURES RELATING TO BRAZIL’S IMPORT OF RECYCLED TIRES
…………….17
ARMS EMBRGO………………………………………………………………………….18 -19
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INDIA’S IMPORT EMBARGO ON DEFENCE EQUIPMENT……………………………20
TRADE EMBARGOES AND ECONOMIES……………………………...
………………….21
CONCLUSION………………………………………………………..………………………..22
INTRODUCTION
International sanctions are economic measures aimed at inducing policy or political change in a
target country, or simply expressing disapproval at its acts. “Typically, these measures involve
the withdrawal, or the threat of withdrawal, of customary trade or financial relations. They range
in degree from comprehensive trade embargoes to targeted asset freezes and travel bans. Their
targets may be States or, increasingly, sub-State groups and individuals.1“
International economic sanctions are often favored by nation states or by international
organizations as a means of projecting power or influencing another government’s behavior
without resorting to military conflict.
Economic sanctions are ”commercial and financial penalties applied by one or more countries
against a targeted self-governing state, group, or individual. Economic sanctions are not
necessarily imposed because of economic circumstances—they may also be imposed for a
variety of political, military, and social issues. Economic sanctions can be used for achieving
domestic and international purposes.”
A sanction can be exercised in several ways. These include:
Tariffs – Taxes imposed on goods imported from another country.
1
Lin, Tom C. W. (2016-04-14). "Financial Weapons of War". Rochester, NY. SSRN 2765010.
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Quotas – A limit on how many goods can be either imported from another country or
sent to that country.
Embargoes – A trade restriction that prevents a country from trading with another. For
example, a government can prevent its citizens or businesses from providing goods or
services to another country.
Non-Tariff Barriers (NTBs) – These are non-tariff restrictions on imported goods and
can include licensing and packaging requirements, product standards and other
requirements that are not specifically a tax.
Asset freezes or seizures – Preventing assets owned by a country or individual from
being sold or moved.
Central to the World Trade Organization (WTO) system is the General Agreement on Tariffs and
Trade 1994 (GATT), which, among other things, prohibits WTO Members from imposing
discriminatory restrictions on imports of other Members. “Sanctions are by nature discriminatory
trade barriers in that they are directed towards a particular country alone and, if undertaken
between WTO Members, present a prima facie conflict with GATT obligations. More
specifically, depending on their design and scope, sanctions may conflict with GATT art I(1)
(‘most-favoured nation treatment’), art III(4) (‘national treatment’), and art XI(1) (‘general
elimination of quantitative restrictions’).”
Conflict may be avoided if sanctions fall within the terms of a GATT exception – specifically,
art XX (‘general exceptions’)8 or art XXI (‘security exceptions’). “Article XXI is also the
exception of first resort for many non-UN sanctions, because of its focus on security, and
because its requirements are in many respects less strict than those of art XX. 2 The possibility of
art XX providing a justification for security measures including UN sanctions is discussed
elsewhere.”
2
. Michael J Hahn, ‘Vital Interests and the Law of GATT: An Analysis of GATT’s Security Exception’ (1991)
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UN SANCTIONS
UN sanctions are adopted by the UN Security Council (UNSC) to pass resolutions short of war.
The legal basis for such sanctions is often cited as Chapter VII of the UN Charter. Article 39 and
41 are key provisions governing the sanctions by the UNSC. Article 39 states that:
The Security Council shall determine the existence of any threat to the peace, breach of the
peace, or act of aggression and shall make recommendations, or decide what measures shall be
taken in accordance with Articles 41 and 42, to maintain or restore international peace and
security.
Article 41 further formulates a non-exhaustive list of measures, short of war, which may be
adopted by the Security Council in response to a breach of the UN Charter. “The Security
Council may decide what measures not involving the use of armed force are to be employed to
give effect to its decisions, and it may call upon the Members of the United Nations to apply
such measures. These may include complete or partial interruption of economic relations and of
rail”, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of
diplomatic relations.
The UN Charter, however, “does not give the UNSC unfettered power with regards to coercive
economic measures. Limitations come from both the charter itself as well as from customary
international law. Article 25, which states that the UN member states agree to carry out the
decisions of the UNSC in accordance with the charter, can be interpreted to mean that states are
obliged to carry out those decisions of UNSC which are in conformity with the charter. Article
24(2) obliges the UNSC to act in accordance with the purposes and principles of United Nations.
These two provisions clearly demonstrate that the power of UNSC needs to be exercised in
conformity with the purposes and principles of the UN, not devoid of it.3“
3
Do Sanctions Violate International Law? By SYED ALI AKHTAR
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NON-UN SANCTIONS
Non-UN sanctions, or countermeasures or unilateral sanctions “imply that an individual state has
imposed sanctions unilaterally without the authorization of UNSC resolution. Such sanctions are
not without their criticisms; developing countries have argued that unilateral sanctions should be
eliminated, as it infringes upon their right to economic and social development. To this effect,
The UN General Assembly has passed a which calls upon all states not to recognize unilateral
extraterritorial coercive economic measures or legislative acts imposed by any state.” The Asian-
African Legal Consultative Organization (AALCO) has also suggested that unilateral coercive
economic measures constitute extraterritorial sanctions and, therefore, violate international law.
The International Law Commission (ILC) calls these unilateral sanctions countermeasures"(ILC
2001). “The ILC details circumstances to allow such countermeasures, which would otherwise
not be in conformity with international obligation of the state concerned. Chapter V of the
Articles on Responsibility of State for Internationally Wrongful Act (ARSIWA), 2001, provides
a shield against a claim of breach of an international obligation.” It resembles the notion of self-
defense under Article 51 of UN Charter where initial wrongfulness (use of force) justifies the act
of response (self-defense). However, these countermeasures imply non-armed measures such as
coercive economic measures.
Article 49(1) of ARSIWA states that an injured state may only take countermeasures against a
state which is responsible for an internationally wrongful act. These countermeasures, however,
are not without restrictions. Article 29(2) of ARSIWA uses the phrase “for the time being” which
means that countermeasures must end once the erring state has complied with its obligations
under international law.4
4
ibid
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EMBARGO
An embargo (from the Spanish embargo, meaning hindrance, obstruction, etc. in a general sense,
a trading ban in trade terminology and literally "distraint" in juridic parlance) is the partial or
complete prohibition of commerce and trade with a particular country/state or a group of
countries.5 “ Embargoes are considered strong diplomatic measures imposed in an effort, by the
imposing country, to elicit a given national-interest result from the country on which it is
imposed. Embargoes are generally considered legal barriers to trade, not to be confused
with blockades, which are often considered to be acts of war.” Embargoes can mean limiting or
banning export or import, creating quotas for quantity, imposing special tolls, taxes, banning
freight or transport vehicles, freezing or seizing freights, assets, bank accounts, limiting the
transport of particular technologies or products (high-tech) .In response to embargoes, a closed
economy or autarky often develops in an area subjected to heavy embargo. “Effectiveness of
embargoes is thus in proportion to the extent and degree of international participation.
Embargoes can be an opportunity to some countries to develop faster a self-sufficiency.
However, Embargo may be necessary in various economic situations of the State forced to
impose it, not necessarily therefore in case of war.”
A trade embargo is a law or policy a “state initiates which prohibits or otherwise restricts the
importation/exportation of goods. Trade embargoes are typically motivated by political,
economic, moral, or environmental reasons, and used as a form of protest against another
country's practices”
Embargoes may be broad or narrow in scope. A trade embargo, for example, is a prohibition on
exports to one or more countries, “though the term is often used to refer to a ban on all
commerce. In contrast, a strategic embargo restricts only the sale of goods that make a direct and
specific contribution to a country’s military power; similarly, an oil embargo prohibits only the
5
"Trade Embargoes Summary" University of California, Irvine.
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export of oil. Broad embargoes often allow the export of certain goods (e.g., medicines or
foodstuffs) to continue for humanitarian purposes, and most multilateral embargoes include
escape clauses that specify a limited set of conditions under which exporters may be exempt
from their prohibitions.
An embargo is a tool of economic warfare that may be employed for a variety of political
purposes, including demonstrating resolve, sending a political signal, retaliating for another
country’s actions, compelling a country to change its behavior, deterring it from engaging in
undesired activities, and weakening its military capability”
US EMBARGO OF 1807
The United States Embargo of 1807 involved a series of laws passed by the U.S. Congress
(1806–1808) during the second term of President Thomas Jefferson. ”Britain and France had
been at war since 1803. Americans had tried hard to remain neutral in this conflict and keep up
communication and trade with both countries. Unfortunately, it wasn't working. In 1806, France
passed a law that prohibited trade between neutral parties, like the U.S., and Britain. French
warships soon began seizing American merchant ships. In 1807, Britain retaliated, prohibiting
trade between neutral parties and France. American policy aimed to use the new laws to avoid
war and to force both France and Britain to respect American rights.”6 The embargo failed to
achieve its aims, and Jefferson repealed the legislation in March 1809.
US EMBARGO OF CUBA
The United States embargo against Cuba began on March 14, 1958, during the rule of
dictator Fulgencio Batista. At first, the embargo applied only to arms sales, however it later
expanded to include other imports, eventually extending to almost all trade on February 7,
1962.] Referred to by Cuba as "el bloqueo" (the blockade),7 the U.S. embargo on Cuba remains
as of 2018 one of the longest-standing embargoes in modern history. ”Few of the United States'
6
https://www.monticello.org/site/research-and-collections/embargo-1807
7
"Cuba trade embargo turns 50: Still no rum or cigars, though some freedom in travel " Elizabeth Flock
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allies embraced the embargo, and many have argued it has been ineffective in changing Cuban
government behavior.8 While taking some steps to allow limited economic exchanges with Cuba,
American President Barack Obama nevertheless reaffirmed the policy in 2011, stating that
without the granting of improved human rights and freedoms by Cuba's current government, the
embargo remains "in the national interest of the United States.”
One of the longest embargoes in U.S. history is its ongoing one against Cuba. Fidel Castro's
regime is being punished for numerous things including: establishing a communist dictatorship
within 90 miles of Florida, attempting to export his revolution to various Latin American
countries, seizing American properties valued at somewhere between $6 and $60 billion, and
allowing the Soviet Union to turn the island into a nuclear-missile base aimed at the United
States. Castro seized power from Fulgencio Batista in 1959.
Since 1962, when the United States and Cuba broke off diplomatic relations, it has generally
been taboo for Americans to travel to or trade with Cuba. Since “1992 it has been unlawful for
foreign subsidiaries of American firms to do business there. The embargo means to restore
democracy to Cuba by weakening that nation's economy to the point that Castro can no longer
govern. Initially the embargo was largely ineffectual because Cuba received huge amounts of
economic aid from the Soviet Union.” In 1991, however, the Soviet Union broke apart and the
foreign-aid spigot was abruptly turned off. Although donations of food and medicine have been
excepted it is estimated that the embargo has cost Cuba $44 billion over the years. “Since the
early 1990s, however, there has been a lot of pressure on the U.S. government to end the
embargo as Cuba is no longer the threat to U.S. security that it was as a Soviet satellite. The
pressure was energized in early 1998 when Pope John Paul II visited Cuba and denounced the
embargo.”
The U.S. government is also beginning to feel pressure from American companies seeking to do
business with Cuba. “The ban on travel to Cuba is not enforced and it was estimated that in 1998
2,000 American business executives would travel to Cuba laying the groundwork for the day
when the embargo is lifted. The Cuban market for basic goods and services is estimated to be
between $2 and $4 billion annually. Because of the political strength of the Cuban exile
community in southern Florida, however, it is doubtful that the embargo will be lifted as long as
8
"It's Time For The U.S. To End Its Senseless Embargo Of Cuba" Daniel Hanson; Dayne Batten; Harrison Ealey
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Castro is in power.9“
UNITED STATES - RESTRICTIONS ON IMPORTS OF TUNA
Import Restrictions on Yellowfin Tuna To reduce the incidental intake of dolphins by yellowfin
tuna fisheries, the United States enacted the Marine Mammal Protection Act in 1972, “which
bans imports of yellowfin tuna and their processed products from Mexico and other countries
where fishing methods result in the incidental intake of dolphins. To prevent circumvention, the
United States also demands that similar import restrictions be adopted by third countries
importing yellowfin tuna or their processed products from countries subjected to the above
import restrictions and prohibits imports of yellowfin tuna and their products from countries
which do not comply with this demand. Japan, the European Union, and others have been
targeted by the US measures.”
The United States contends that the above measures are designed to protect dolphins and are
therefore measures “necessary to protect human, animal or plant life or health” (Article XX (b))
and measures “relating to the conservation of exhaustible natural resources” 29 (Article XX (g)).
These measures are thus permissible under the GATT as exceptions to the general prohibition of
quantitative restrictions.10
However, a panel established pursuant to the request of Mexico in February 1991 found in
September 1991 that the US measures violate the GATT. (Because Mexico sought resolution
through bilateral negotiations with the United States, the report was not adopted by the GATT
Council.) “The panel report concluded that the US measures violate Article XI as quantitative
restrictions and that such restrictions are not justified by Article XX on the grounds that: (1) the
measures may not be a necessary and appropriate means of protecting dolphins, and (2) allowing
countries to apply conservation measures which protect objects outside their territory and thus to
9
https://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Embargo.html#ixzz6srl1CW1G
10
https://www.meti.go.jp/english/report/downloadfiles/gCT0003e.pdf
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unilaterally determine the necessity of the regulation and its degree would jeopardize the rights
of other countries.”
In September 1992, a panel was established again at the behest of the European Communities
and the Netherlands (representing the Dutch Antilles). Its report, issued in May 1994, found US
measures to be in violation of the GATT. The report noted that the United States’ import
prohibitions are designed to force policy changes in other countries and indeed can only be
effective if such changes are made. Since these prohibitions are not measures necessary to
protect the life and health of animals exempted by nor primarily aimed at the conservation of
exhaustible natural resources, the report concluded that the US measures are contrary to Article
XI:1, and are not covered by the exceptions in Article s XX:(b) or (g).
The report was submitted to the GATT Council for adoption in July 1994, “but the United States
blocked adoption. In reaction to this deadlock situation, the United States and the governments of
countries concerned, such as Latin American countries, have agreed to the Panama Declaration
which adopts restrictive measures pursuant to the annual plan to regulate the incidental intake of
dolphins, as prepared in 1992. In response, the United States enacted the International Dolphin
Conservation Program Act (Public Law No. 105-42) in August 1997, which would remove the
embargo on yellowfin tuna with respect to imports from those countries that participate in a
dolphin’s conservation programmed formulated under the law, if an enforceable international
agreement enters into force to implement the Panama Declaration. The international agreement
that has the legal binding force to carry this out, the International Dolphin Preservation
Agreement, was adopted in February 1998.” Although the United States is considering the lifting
of the measures concerned, it maintains them at present. Japan should continue to watch to
ensure that the movement of the United States closely as consistency with its obligations under
the WTO Agreement.
A famous and ultimately ill-fated embargo with global repercussions was the Arab oil embargo
of the 1970s. Begun in 1973 the embargo was meant to punish the Netherlands and the United
States for their support of Israel during the Yom Kippur War. Arab oil-producing nations,
however, with the involvement of the Organization of Petroleum Exporting Countries (OPEC),
instituted sharp cutbacks in their oil output. “The immediate effect of their actions was a major
oil shortage and a subsequent disruption of financial markets, a dramatic rise in the price of oil,
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and panic at the gasoline pumps. The embargo ultimately failed because of the increased use of
natural gas, nuclear energy, and coal. Facing sharp cuts in oil revenue, the countries began
pumping oil in excess of their official quotas. These actions resulted in a decline in the demand
and price of oil.”
US-SHRIMP CASE
The United States’ import ban on shrimp and shrimp products is based on Section 609 of its
Endangered Species Act, which states “that all shrimp imported into the US must be caught with
methods that protect marine turtles from incidental drowning in shrimp trawling nets.
Particularly, the law requires the US government to certify that (a) the importing country has
comparable laws to the US regulations on incidental taking of sea turtles, and (b) the average rate
of incidental taking is comparable to the US.”
Section 609 prohibited importation to the U.S. of shrimp harvested with commercial fishing
technology that may adversely affect sea turtles. It also provided an exception for shrimp
imported from states certified thereunder. It limited the geographical scope of the import ban
imposed by Section 609 and allowed countries in the wider Caribbean/western Atlantic region a
three-year phase-in period.
Malaysia, Thailand, India and Pakistan argued that this law violates WTO rules.
Contentions- Malaysia, Thailand, India, others
■ That, the measure does not conform to the requirements of the preamble of Article XX
because it is a disguised restriction on international trade designed to protect the US
domestic fishing industry from a competitive disadvantage.
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■ That, it constitutes arbitrary discrimination among countries because importation of
shrimp was suddenly prohibited from certain nations unless they met standards that the
US and other countries were given years to meet.
■ That Article XX exceptions cannot be invoked to justify a measure which applies to
animals, plants and natural resources, located beyond the jurisdiction of the country
enacting the measure.
Contentions- United States
■ Section 609 meets the requirements of the preamble of Article XX. It is not an arbitrary
discrimination because Section 609 is applied in a manner that carefully ties the criteria
for certification to the particular conditions of each country exporting shrimp to the
United States. Nor is it a disguised restriction on trade because there is an international
consensus regarding sea turtle conservation and mandatory use of TEDs, which belies
any claim that the US measures are a disguised restriction on trade.
■ On the question of jurisdiction, the US considers sea turtles as a shared global
resource which does not fall exclusively within the complainants’ respective
jurisdictions. It submits that Article XX unambiguously covers all animals and natural
resources, without any limitation as to their location; and that the Montreal Protocol
provides a good example of nations seeking to protect life and health of humans, animals
and plants without regard to their location.
Panel’s finding and interpretation
The chapeau of Article XX, interpreted within its context and in the light of the object and
purpose of GATT and of the WTO Agreement, only allows Members to derogate from GATT
provisions so long as, in doing so, they do not undermine the WTO multilateral trading system.
When considering a measure under Article XX, the Panel must determine not only whether the
measure on its own undermines th e WTO multilateral trading system, but also whether such
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type of measure, if it were to be adopted by other Members, would threaten the security and
predictability of the multilateral trading system.
If an interpretation of the chapeau of Article XX were to be followed which would allow a
Member to adopt measures conditioning access to its market for a given product upon the
adoption by the exporting Members of certain policies, including conservation policies, GATT
1994 and the WTO Agreement could no longer serve as a multilateral framework for trade.
The US measure at issue constitutes unjustifiable discrimination between countries where the
same conditions prevail and thus is not within the scope of measures permitted under Article XX.
EXPORT RESTRICTIONS ON LOGS
To conserve spotted owls’ habitat, the United States regulated the cutting of forests. This in turn,
reduced the supply on the domestic logs market. In response, “the United States imposed a
permanent ban on exports of logs cut from federally owned forests and implemented export
restrictions on logs cut from state-owned forests.” From the beginning, the Forest Resource
Conservation and Shortage Relief Act of 1990, which took effect in August 1990, regulated the
export volume of state logs as follows:
A. States selling not more than 400 million board feet a year are permanently banned from
exporting logs cut from state-owned forests.
B. States selling more than 400 million board feet a year are, without exception, banned from
exporting three-quarters of all logs cut from state-owned forests.
The sole state satisfying the requirements stated in B above is the State of Washington, “ thus
only 25 percent of the logs cut from its state-owned forests were allowed for export.
Nevertheless, domestic lumber mills strongly requested to be allowed to maintain or even
increase the supply of logs cut from state-owned forests in order to achieve job security and other
objectives. In September 1992, the Secretary of Commerce published a notice that totally banned
the export of logs cut from state-owned forests from October of that year until the end of
1993.11“
11
https://www.meti.go.jp/english/report/downloadfiles/gCT0003e.pdf
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Further, the Forest Resource Conservation and Shortage Relief Act was amended in June 1993 to
totally ban exports from states satisfying the conditions of B above until the end of 1995 and to
ban exports from states selling more than the lesser of 400 million board feet or their annual
sales in January 1996.
Nevertheless, the Balanced Budget Down Payment Act enacted in January 1996 and the later
Omnibus Consolidated Rescissions and Appropriations Act of 1996 enacted in April extended
the total ban until October 1996.
The United States contends that its measures are implemented to protect spotted owls and related
forest resources and to relieve the resultant shortage of lumber. It reasoned that the restrictions
are permissible “to protect human, animal, or plant life or health” (Article XX (b)) as well as to
relieve a shortage of products consumed domestically (Article XI:2(a) and Article XX (j)), both
of which exempt certain quantitative restrictions from their ban.
It is unlikely that the above measures are necessary “or appropriate to protect the spotted owls’
habitat nor to relieve the shortage of products in the domestic market. Conservation of spotted
owls should be accomplished by restrictions on the cutting of forests rather than export
restrictions of logs. Although the Government imposes restrictions on log exports, it allows
domestic sales of logs without any restriction and promotes exports of lumber. Thus, these
restrictions should be characterized as quantitative restrictions implemented to protect domestic
lumber mills, and as a violation of Article XI that cannot be justified by Article XX. Japan
should continue to request that these measures should be brought into conformity with the WTO
Agreement.”
MEASURES RELATING TO BRAZIL’S IMPORT OF RECYCLED TIRES
In 2004, Brazil introduced restrictions on the import, sale, transportation and storage, etc., of
used tires, and prohibited the import of recycled tires, “since it was considered that the storage of
used tires was creating a breeding ground for disease carrying mosquitoes, leading to the
incidence of malaria and dengue and resulting in a serious negative impact on the life and health
of its citizens. In response to this, the EC claimed that prohibiting the import or restriction of
used or recycled tires was an infringement” of GATT Article XI:1, and initiated WTO dispute-
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settlement procedures. The panel acknowledged the EC’s claim and judged the measures an
infringement of GATT Article XI. Since Brazil did not appeal this issue to the Appellate Body, it
was resolved at panel level. In this case, in addition to the infringement of GATT Article XI,
whether or not the infringement was justified under GATT Article XX(b) was also disputed. The
Appellate Body ruled that the measure was not justified under GATT Article XX (b), stating that
the import prohibitions/restrictions were “arbitrarily or unjustifiably discriminatory” (GATT XX
introduction) due to the fact that some exceptions had been allowed (such as the import of used
and recycled tires from MERCOSUR countries, etc.)12
ARMS EMBRGO
An arms embargo is a restriction or a set of sanctions that applies either solely to weaponry or
also to "dual-use technology." An arms embargo may serve one or more purposes:
to signal disapproval of the behavior of a certain actor
to maintain neutrality in an ongoing conflict
as a peace mechanism that is part of a peace process to resolve an armed conflict13
to limit the ability of an actor to inflict violence on others
to weaken a country's military capabilities before a foreign intervention.
The United States imposed economic sanctions against Iran following the Iranian Revolution in
1979. However, to secure the release of American hostages, several senior Reagan
administration officials secretly facilitated the sale of arms to Iran in the 1980s in a scandal
called the Iran–Contra affair. In 1995, the US expanded sanctions to include firms dealing with
the Iranian government.14
In March 2007, UN Security Council Resolution 1747 tightened the sanctions imposed on Iran in
connection with the Iranian nuclear program. The sanctions were lifted on 16 January 2016.
In September 2020, US Secretary of State Mike Pompeo announced the imposition of an arms
embargo on the Iranian Ministry of Defence and Armed Forces Logistics and other entities
12
ibid
13
"Remarks of SRSG Ghassan Salamé to the United Nations Security Council on the situation in Libya 29 July 2019".
14
" How 5 nations have reacted to sanctions: Iran" by Ariel Zirulnick Sanction Qaddafi
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involved in Iran's nuclear program, including the government of the disputed Venezuelan
President Nicolás Maduro for providing weapons to Iran.
On 18 October 2020, Iran announced that the United Nations conventional arms embargo
imposed on the country in 2007 had expired. The embargo had barred Iran from purchasing
arms, including tanks and fighter jets, from foreign nations. The embargo was lifted as per the
conditions under Iran’s 2015 nuclear deal with world leaders, despite US objections.
The United States and the European Union stopped exporting arms to China after 1989 after the
violent suppression of protests in Tiananmen Square. In 2004 and 2005, there was some debate
in the EU over whether to lift the embargo.15
INDIA’S IMPORT EMBARGO ON DEFENCE EQUIPMENT
In a major reform initiative to boost the domestic defense industry, Defense Minister Rajnath
Singh today announced restrictions on import of 101 weapons and military platforms including
artillery guns, assault rifles and transport aircraft.
He said the ministry has prepared a list of 101 items for which the embargo on imports is
planned to be progressively implemented between 2020 and 2024.
The list of 101 embargoed items comprises some high technology weapon systems like artillery
guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs),
radars and many other items.
The import embargo will come into effect on these items in a phased manner. The deadline has
been set for December 202516
In the aftermath of the COVID-19 crisis, there has been a surge in global demand for medicines,
medical supplies and personal protection equipment. Maintaining sufficient stock of foodstuffs to
15
http://www.sldinfo.com/the-eu-arms-embargo-repeal-debate/
16
https://www.livemint.com/news/india/from-guns-to-missiles-complete-list-of-101-defence-items-banned-for-
import-by-india-11596955073172.html
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contain inflation and ensure food security has also become a national priority. However, the twin
effect of enforced lockdowns and restrictions to international transport, have disrupted global
supply chains. Countries are, thus, faced with the prospect of a looming shortfall in essential
supplies. As such, several states and trade blocs have enforced export prohibitions and
restrictions to stabilize domestic supplies of essential goods, and control their domestic prices.17
US embargo on exporting Covid vaccine
The US’s Defense Production Act (DPA), invoked this February, allows the US President to
order US based manufacturers to prioritize the supply of output—in this case, the supply of
Covid-19 vaccines and protective equipment—to the American domestic market. One immediate
consequence is that the DPA has been used to restrict the vaccine sales of US based medical
suppliers Pfizer-BioNTech, Moderna and Johnson & Johnson’s unit Janssen to the American
market. This decision by the Biden Administration will impact medical companies and vaccine
rollouts across the world, with India affected as well.
TRADE EMBARGOES AND ECONOMIES
At times, trade embargoes work because they can contribute to more peace and stability, and
they can even prevent the debilitation of human rights violations, terrorism, aggression and
nuclear threat. However, “long term restrictions can be quite damaging and aggravate poverty
and the standard of living for civilians. Owing to the sheer level of economic isolation and threat
to trading relationships, the effects of trade embargoes can be especially damaging to the
business, trade and commerce of a country, impacting a country’s GDP as well.18“
As a result of the negative effects of trade embargoes, domestic industries and producers often
suffer a decline in their export markets and revenues, “thereby threatening jobs and livelihoods.
Countries that tend to overspecialize in certain commodities, goods and services may be most
affected by these constraints as key sectors of the economy may be adversely impacted. Given
17
https://www.orfonline.org/expert-speak/covid19-export-bans-trade-rules-international-cooperation/
18
https://borgenproject.org/the-problems-with-trade-embargoes/
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their level of development, poorer countries are often restricted to producing goods in the
primary industry that may have relatively lower returns.”
Unintended Consequence
Trade embargoes may lead to grave economic and geopolitical problems like retaliation, such as
the Russian counter-embargo after the 2014 EU Energy embargo during the Russian annexation
of Crimea. This can result in an escalation in trade and price wars in the long run. Incidentally,
the U.S. and China may now also be on the verge of a major trade war due to the new imposition
of trade barriers, most recently on steel and China’s HUWEI chip sales.
Due to deficiencies in the country’s power to export goods and services during an embargo, its
trade balance will also tend to suffer to a great degree. “For instance, a U.N. arms embargo has
been placed on North Korea concerning all armaments and related goods. Since December 2017,
trade restraints have also been placed on key industries like oil and agriculture. This has created
issues for the North Korean economy, but it has done little to deter the government from nuclear
testing.19“
According to the IMF, there is significant evidence that countries with open economies are more
likely to achieve higher levels of economic growth. “With new levels of trade liberalization and
globalization, expanding economies are benefitting from massive inflows of capital and
investment from stakeholder groups around the world. Moreover, in recent years, burgeoning
and fast-paced economies like China are graduating to an open trade policy so that they can
bolster trading ties with other key trading players.”
In the year 2014, members of the World Trade Organization (WTO) agreed to sign the Trade
Facilitation Agreement (TFA). In order to ensure greater ease, competitiveness, and efficiency in
trade in the future, trade facilitation measures are now being implemented so that weak
19
ibid
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bureaucracy and productivity issues may be addressed. TFA will also aid developing
economies to boost their exports and have greater access to markets.
CONCLUSION
The most common reason for some setting into place a embargo is because they no longer feel
that the country they are trading with is a safe place to trade with, this means they are usually
setting this trade action into place because they feel it will help with their nations security.
However, another advantage to embargos is it forces the other country to change its ways
especially if they are doing something which is ethically wrong or something that hurts one of
there main trade partners. As I have said before America embargoed Cuba because they had
Russian missiles on their island and because they did this it meant that Cuba had to remove the
missiles from there country otherwise America would no longer trade with them. Another
advantage to embargos is that if this was to happen both countries may have rival industries and
this will no longer be a problem because the countries can’t rival against each allowing both
industries grow in both countries because they don’t have to compete with each other as directly
anymore. The biggest and most major issues with a embargo is once its in place the smaller
country will suffer huge losses and this will cause huge amounts of economic problems and most
likely collapse and this means that you are punishing people who live there
Trade embargos can work under the right circumstances, “but they are not always as effective as
one would hope. Furthermore, they can have unexpected consequences. Given the vast scope and
potential of free trade and development in a dynamically changing world, eliminating barriers
and encouraging greater economic integration may provide a more effective way to address
important social and economic issues and have profoundly positive impacts in the long term.”
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