Types of Embargoes with examples
- 2. Meaning of Embargoes An embargo (derived from Spanish) is the partial or complete prohibition of commerce and trade with a particular country or a group of countries. Embargoes also called as economic sanctions. Objective: i. For safety reasons. ii. To protect our own farmersor workersfrom foreign competition, or to pressureor punish another country . iii. For political reasons.
- 3. TYPES OF EMBARGOS OR ECONOMIC SANCTIONS: Financial sanctions Trade sanctions Trade sanctions products services Freezing of funds Export-import embargoes And other assets Prohibition of technical and financial aid Investments Prohibition of fulfillment of claims Transport Travel restrictions Insurance (Iran, Syria)
- 4. I. Financial sanctions – freezing of funds and other assets 1.Asset Freeze An asset freeze aims to prevent an individual or entity from gaining access to property or other assets it may hold under targeted country jurisdiction. An asset freeze applies only to property owned by named individuals or entities, and is often accompanied by other financial prohibitions.
- 5. 2.Financial Prohibitions or freezing of funds Financial prohibitions can prohibit any person in the sanctioned state from conducting financial transactions with specific persons in embargo country. Equally, they may only target specific types of financial transactions, or financial transactions with listed individuals or organizations. Exceptions may include transactions related to humanitarian aid; transactions required to move financial assets away from designated persons; financial transactions required under pre-existing contracts; and remittances between family members. The specific exemptions are listed in the regulations for each set of sanctions.
- 6. Example for financial sanction European Union imposed embargo on Russia on 12th September 2014 Finance prohibition : Capital transactions: EU prohibits loans to and trading or brokering of certain financial instrument of 5 major state owned Russian banks ,(main target Bank Rossiya ) 3 major defence companies and 3 major oil companies i.e., Rosneft, Transneft and Gazprom Neft, the oil unit of gas giant Gazprom.(But the gas industry, space technology and nuclear energy are excluded from sanctions.) ASSET freeze: 119 persons (24 of them added 12/9/14) and 23 entities subject to an asset freeze and a visa ban. Freezes and bans may also be imposed on those conducting transactions with Russia separatists.
- 7. II.Trade sanctions – products Export import embargo imposed on 1.Arms and Related Materials Embargo: An arms embargo aims to prevent weapons and military equipment from leaving or reaching a targeted country. It prohibits exporting and importing arms and related materials to and from the targeted country, and may also prohibit communicating technical data or financial transactions related to military activities.
- 8. For example: The EU has an import sanction against North Korea for arms and related material and for items that can contribute to North Korea’s nuclear-related, ballistic missile- related or other weapons of mass destruction-related programs. The above mentioned goods cannot be imported from North Korea. Imports of other goods from North Korea are allowed.
- 9. 2.Export/Import Restrictions on other products Export and import restrictions aim to hinder the economy, or specific sectors of the economy, of the targeted country. They typically prohibit buying, selling or shipping identified goods to or from the country. Exemptions may apply to food; medical supplies; goods used for public health purposes or disaster relief; or goods required under pre-existing contracts.
- 10. Example US has an import and export embargo against Cuba and Syria. No good can be imported to or from Cuba or Syria.
- 11. III.Trade sanctions – services •Prohibition of technical and financial aid •Investments •Prohibition of fulfillment of claims •Transport •Travel restrictions •Insurance (Iran, Syria)
- 12. Technical Assistance Prohibition Technical assistance prohibitions aim to prevent a country targeted by an arms embargo or an export ban from obtaining services and information related to the banned products. They typically prohibit providing technical data, training or other technical assistance. Prohibitions on technical assistance will usually affect dealings with all persons in the targeted country.
- 13. Example Canadian Embargo on Iran A prohibition on providing any technology to Iran in respect of any activity related to ballistic missiles capable of delivering nuclear weapons; uranium enrichment, reprocessing or heavy water-related activities, or to the development of nuclear weapon delivery systems (products listed in the International Atomic Energy Agency's Information Circulars INFCIRC/254/Rev.12/Part 1 and INFCIRC/254/Rev.9/Part 2 and UN Security Council document S/2015/254.