Coercive Diplomacy, Sanctions and International Law [1 ed.] 9789004299894, 9789004299887

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Coercive Diplomacy, Sanctions and International Law

Coercive Diplomacy, Sanctions and International Law Edited by

Natalino Ronzitti

LEIDEN | BOSTON

Library of Congress Cataloging-in-Publication Data Names: Ronzitti, Natalino, editor. Title: Coercive diplomacy, sanctions and international law / Edited by Natalino Ronzitti. Description: Leiden : Brill Nijhoff, 2016. | Includes bibliographical references and index. Identifiers: LCCN 2016000264 (print) | LCCN 2016000344 (ebook) | ISBN 9789004299887 (hardback : alk. paper) | ISBN 9789004299894 (E-book) Subjects: LCSH: Sanctions (International law). | Economic sanctions. | International relations. Classification: LCC KZ6373 .C64 2016 (print) | LCC KZ6373 (ebook) | DDC 341.5/8--dc23 LC record available at http://lccn.loc.gov/2016000264

Want or need Open Access? Brill Open offers you the choice to make your research freely accessible online in exchange for a publication charge. Review your various options on brill.com/brill-open. Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill-typeface. isbn 978-90-04-29988-7 (hardback) isbn 978-90-04-29989-4 (e-book) Copyright 2016 by Koninklijke Brill nv, Leiden, The Netherlands. Koninklijke Brill nv incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi and Hotei Publishing. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill nv provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, ma 01923, usa. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner.

Contents Preface vii Table of Cases ix Table of Treaties, Legislation and Other Documents xvi List of Abbreviations xxIX List of Contributors xxxI 1 Sanctions as Instruments of Coercive Diplomacy: An International Law Perspective 1 Natalino Ronzitti 2 Compatibility and Legitimacy of Sanctions Regimes 33 Michael Bothe 3 Confronting the Implementation and Enforcement Challenges Involved in Imposing Economic Sanctions 43 Bryan R. Early 4 Sanctions Imposed by the European Union: Legal and Institutional Aspects 70 Marco Gestri 5 Practice Makes Perfect, Eventually? Unilateral State Sanctions and the Extraterritorial Effects of National Legislation 103 Charlotte Beaucillon 6 Sanctions against Non-State Actors 127 Nigel D. White 7 Sanctions and the Protection of Human Rights: The Role of Sanctions Committees 161 Thilo Marauhn and Ignaz Stegmiller 8 Sanctions and Individual Rights 171 Monica Lugato 9 International Legal Limits on the Ability of States to Lawfully Impose International Economic/Financial Sanctions 190 Daniel H. Joyner

vi 10

Contents

An Overview of International Sanctions’ Impact on Treaties and Contracts 207 Andrea Atteritano and Maria Beatrice Deli

11 un Sanctions Targeting Individuals and icc Proceedings: How to Achieve a Mutually Reinforcing Interaction 228 Marina Mancini 12

From Effective to Useful Sanctions: Lessons Learned from the Experience of the European Union 246 Francesco Giumelli

13

Western Economic and Political Sanctions as Instruments of Strategic Competition with Russia – Opportunities and Risks 270 Joachim Krause

14 Conclusion 287 Natalino Ronzitti Bibliography 295 Index 307

Preface The idea of a project on sanctions as an instrument of coercive diplomacy originated from a number of talks that I had with Joachim Krause (University of Kiel) in the fall of 2014. The project, conducted by the Istituto Affari Internazionali (iai) (Rome) in collaboration with the Institute for Security Policy at Kiel University (ispk), was very ambitious and aimed at exploring the role of sanctions from the point of view of both international relations and international law. It was deemed very timely, particularly in the field of nonproliferation: at that time the Iranian case was one of the central issues facing the international community. Other areas and actors of crisis, such as Libya, Syria and isil further proved the importance of the project. The annexation of Crimea by the Russian Federation and more generally the Ukrainian crisis pushed the eu and other States to take restrictive measures and Russia responded with the adoption of countersanctions against the eu. As the demand for a clarification on the content, effectiveness and legality of coercive diplomacy not amounting to the threat or use of force increased, I deemed it useful to accelerate the project by commissioning a number of papers by renowned experts in the fields of international law and international relations. They were presented and discussed at an international Conference which took place in Rome at the iai on 13 February 2015. The Conference was an occasion of discussion not only with eminent scholars but also with key players representing the major sectors of international society (institutions, diplomats, business, civil society, etc.). This book is not a simple collection of the proceedings of an international conference, but the product of research carried out by a number of high-level academics, to whom I owe my gratitude. The majority of chapters deal with the various aspects of sanctions and countermeasures from an international law perspective. A few chapters approach the subject from the point of view of international relations since the two disciplines are strictly interconnected when considering coercive diplomacy. I owe my gratitude also to all those who have made this publication possible. The research was generously funded by eni, whose grant was instrumental in convening the Conference in Rome together with the contribution by the Friedrich-Ebert-Stiftung. Moreover, the support of Compagnia di San Paolo (Torino) for the publication of this book should also be acknowledged. Last but not least I would like to thank several people, not only the authors of the chapters, but also Nicoletta Pirozzi for the time dedicated to the project in its initial stages, and Elisabetta Farroni, whose professionalism and dedication

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PREFACE

made the success of the Rome Conference possible. Anna Riddell helped in revising a number of chapters from a linguistic point of view. Many thanks are also due to Chiara Altafin, who worked as an editorial assistant in the final stages of preparation of the book and was responsible for the preparation of the bibliography and the tables. Thanks also to Federico Casolari for the index. Natalino Ronzitti

Rome, October 2015

Table of Cases International Courts

Permanent Court of International Justice



International Court of Justice



Permanent Court of Arbitration



International Criminal Court

The Case of the S.S. “Lotus” (France v. Turkey), Judgment of 7 September 1927, 1927 p.c.i.j. (ser. A) No. 10  110, 111, 123, 193

Case concerning Oil Platforms (Islamic Republic of Iran v. United States of America), Judgment of 6 November 2003, i.c.j. Reports 2003  36 Case concerning questions of interpretation and application of 1971 Montreal Conven­ tion  arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United States), Preliminary Objections, Judgment of 27 February 1998, i.c.j. Reports 1998  184, 186, 227 Case concerning the Gabcikovo-Nagymaros Project (Hungary v. Slovakia), Judgment of 25 September 1997, i.c.j. Reports 1997  13, 107, 214 Corfu Channel (United Kingdom of Great Britain and Northern Ireland v. Albania), Judgment of 9 April 1949, i.c.j. Reports 1949  6, 7 Fisheries Jurisdiction (United Kingdom v. Iceland), Judgment of 2 February 1973, i.c.j. Reports 1973  213, 214 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States), Judgment of 27 June 1986, i.c.j. Reports 1986  2, 6, 7, 8, 32, 36, 41, 186, 193, 194

Island of Palmas case (Netherlands v. United States of America), Award, 4 April 1928, ii r.i.a.a. 829  112

ICC-01/04-01/06-2, Chambre préliminaire i, Le Procureur c. Thomas Lubanga Dyilo, Mandat d’arrêt, 10 février 2006  232 ICC-01/04-01/06-8-US-Corr, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision concerning Pre-Trial Chamber i’s Decision of 10 February 2006 and the Incorporation of Documents into the Record of the Case against Mr Thomas Lubanga Dyilo, 24 February 2006  242 ICC-01/04-01/06-22-tEN, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Request to the Democratic Republic of the Congo for the Purpose of Obtaining the Identification, Tracing, Freezing and Seizure of Property and Assets Belonging to Mr Thomas Lubanga Dyilo, 9 March 2006  242

x

Table of Cases

ICC-01/04-01/06-62-tEN, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Request to States Parties to the Rome Statute for the Identification, Tracing and Freezing or Seizure of the Property and Assets of Mr Thomas Lubanga Dyilo, 31 March 2006  242 ICC-01/04-02/06-2, Chambre préliminaire i, Le Procureur c. Bosco Ntaganda, Mandat d’arrêt, 22 août 2006  232 ICC-02/05-01/07-2, Pre-Trial Chamber i, The Prosecutor v. Ahmad Muhammad Harun (“Ahmad Harun”) and Ali Muhammad Ali Abd-Al-Rahman (“Ali Kushayb”), Warrant of Arrest for Ahmad Harun, 27 April 2007  234 ICC-02/05-01/07-3-Corr, Pre-Trial Chamber i, The Prosecutor v. Ahmad Muhammad Harun (“Ahmad Harun”) and Ali Muhammad Ali Abd-Al-Rahman (“Ali Kushayb”), Warrant of Arrest for Ali Kushayb, 27 April 2007  234 ICC-01/04-01/07-1, Chambre préliminaire i, Le Procureur c. Germain Katanga, Mandat d’arrêt à l’encontre de Germain Katanga, 2 juillet 2007  232 ICC-01/04-02/07-1, Chambre préliminaire i, Le Procureur c. Mathieu Ngudjolo Chui, Mandat d’arrêt à l’encontre de Mathieu Ngudjolo Chui, 6 juillet 2007  232 ICC-01/04-01/07-7-tENG, The Prosecutor v. Germain Katanga, Request to the Democratic Republic of the Congo for the Purpose of Obtaining the Identification, Tracing, Freezing and Seizure of the Property and Assets of Germain Katanga, 6 July 2007  242 ICC-01/05-01/08-1, Chambre préliminaire iii, Le Procureur c. Jean-Pierre Bemba Gombo, Mandat d’arrêt à l’encontre de Jean-Pierre Bemba Gombo, 23 mai 2008  233 ICC-02/05-01/09-1, Pre-Trial Chamber i, The Prosecutor v. Omar Hassan Ahmad Al Bashir (“Omar Al Bashir”), Warrant of Arrest for Omar Hassan Ahmad Al Bashir, 4 March 2009  234 ICC-02/05-01/09-95, Pre-Trial Chamber i, The Prosecutor v. Omar Hassan Ahmad Al Bashir (“Omar Al Bashir”), Second Warrant of Arrest for Omar Hassan Ahmad Al Bashir, 12 July 2010  234 ICC-01/04-01/10-2, Chambre préliminaire i, Le Procureur c. Callixte Mbarushimana, Mandat d’arrêt à l’encontre de Callixte Mbarushimana, 28 septembre 2010  232 ICC-01/11-01/11-2, Pre-Trial Chamber i, Warrant of Arrest for Muammar Mohammed Abu Minyar Gaddafi, 27 June 2011  233 ICC-01/11-01/11-3, Pre-Trial Chamber i, Warrant of Arrest for Saif Al-Islam Gaddafi, 27 June 2011  233 ICC-01/11-01/11-4, Pre-Trial Chamber i, Warrant of Arrest for Abdullah Al-Senussi, 27 June 2011  233 ICC-02/11-01/11-1, Pre-Trial Chamber iii, Warrant of Arrest for Laurent Koudou Gbagbo, 23 November 2011  233 ICC-02/11-02/11-1, Pre-Trial Chamber iii, Warrant of Arrest for Charles Blé Goudé, 21 December 2011  233 ICC-02/11-01/12-1, Pre-Trial Chamber iii, Warrant of Arrest for Simone Gbagbo, 29 February 2012  233

Table Of Cases

xi

ICC-02/05-01/12-2, Pre-Trial Chamber i, The Prosecutor v. Abdel Raheem Muhammad Hussein, Warrant of Arrest for Abdel Raheem Muhammad Hussein, 1 March 2012  234 ICC-01/04-01/06-2901, Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision on Sentence pursuant to Article 76 of the Statute, 10 July 2012  239 ICC-01/04-01/12-1-Red, Pre-Trial Chamber ii, The Prosecutor v. Sylvestre Mudacumura, Decision on the Prosecutor’s Application under Article 58, 13 July 2012  232 ICC-01/04-02/06-36-Red, Pre-Trial Chamber ii, The Prosecutor v. Bosco Ntaganda, Decision on the Prosecutor’s Application under Article 58, 13 July 2012  232 ICC-01/04-01/06-2904, Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision Establishing the Principles and Procedures to be Applied to Reparations, 7 August 2012  240 ICC-01/05-01/13-1-Red2, Chambre préliminaire ii, Le Procureur c. Jean-Pierre Bemba Gombo, Aimé Kilolo Musamba, Jean-Jacques Mangenda Kebongo, Fidèle Babala Wandu et Narcisse Arido, Mandat d’arrêt à l’encontre de Jean-Pierre Bemba Gombo, Aimé Kilolo Musamba, Jean-Jacques Mangenda Kebongo, Fidèle Babala Wandu et Narcisse Arido, 20 novembre 2013  234 ICC-01/04-01/07-3484, Chambre de première instance ii, Décision relative à la peine (article 76 du Statut), 23 mai 2014  239 ICC-01/04-01/06-3122, Appeals Chamber, The Prosecutor v. Thomas Lubanga Dyilo, Judgment on the Appeals of the Prosecutor and Mr. Thomas Lubanga Dyilo against the “Decision on Sentence pursuant to Article 76 of the Statute”, 1 December 2014  239 ICC-01/04-01/06-3129, Appeals Chamber, The Prosecutor v. Thomas Lubanga Dyilo, Judgment on the Appeals against the “Decision Establishing the Principles and Procedures to Be Applied to Reparations” of 7 August 2012 with AMENDED Order for Reparations (Annex A) and Public Annexes 1 and 2, 3 March 2015  240



International Criminal Tribunal for the Former Yugoslavia



United Nations Human Rights Committee

Prosecutor v. Duško Tadić, Decision on the Defense Motion on Jurisdiction, Case No. IT-94-1, 10 August 1995  151

Nabil Sayadi and Patricia Vinck v. Belgium, Communication No. 1472/2006, 29 December 2008, 16 ihhr 427  138, 173

Regional Courts

Court of Justice of the European Union

A. Racke GmbH and Co. v. Hauptzollamt Mainz, Case C-162/96, Advocate General Jacobs, Opinion, e.c.r. I-3655 (1998)  213, 214

xii

Table of Cases

Berlusconi and Others, Joined Cases C-387/02, C-391/02 and C-403/02, Advocate General Kokott, Opinion, 14 October 2004  88 Jose Maria Sison v. Council of the European Union, T-341/07, Judgment of the Court of First Instance (Seventh Chamber), 30 September 2009  174 Yassin Abdullah Kadi v. Council of the European Union and Commission of the European Communities, T-315/01, Judgment of the Court of First Instance (Second Chamber, extended composition), 21 September 2005  175 Yusuf and Al-Barakaat International Foundation v. Council and Commission, T-306/01, Judgment of the Court of First Instance, 21 September 2005  175 Abdulbasit Abdulrahim v. Council and Commission, C-239/12 P, Judgment of the Court of Justice (Grand Chamber), 28 May 2013  173 Commission v. Greece, Case 68/88, Judgment of the Court of Justice, 21 September 1989  88 Commission and United Kingdom v. Yassin Abdullah Kadi, Joined Cases C-584/10 P, C-593/10 P and C-595/10 P, Judgment of the Court of Justice (Grand Chamber), 18 July 2013  173, 227 Council v. Fulmen and Mahmoudian, Case C-280/12 P, Judgment of the Court of Justice, 28 November 2013  97 Iran Transfo v. Council of the European Union, Case T-392/11, Judgment of the Court of Justice, 16 May 2013  172 Council v. Manufacturing Support & Procurement Kala Naft Co., Tehran, Case C-348/12 P, Judgment of the Court (Fifth Chamber), 28 November 2013  76, 81 European Parliament v. Council, Case C-130/10, Judgment of the Court of Justice, 19 July 2012  85, 86 Flaminio Costa v. e.n.e.l., Case 6/64, Judgment of the Court of Justice, 15 July 1964  87 Plaumann, Case 25–62, Judgment of the Court of Justice, 15 July 1963  96 The Queen, ex parte Centro-Com Srl v hm Treasury and Bank of England, Case C-124/95, Judgment of the Court, 14 January 1997  84 Yassin Abdullah Kadi and Al Barakaat International Foundation v. Council of the European Union and Commission of the European Communities, Joined Cases C-402/05 P and C-415/05 P, [2008] ecr I-6351, Judgment of the Court (Grand Chamber), 3 September 2008  138, 173 Bank Melli Iran v. Council, Case T‑390/08, Judgment of the General Court, 14 October 2009  98 Central Bank of Iran v. Council of the European Union, Case T-262/12, Judgment of the General Court (First Chamber), 18 September 2014  22

Table Of Cases

xiii

Europäisch-Iranische Handelsbank AG v. Council, Case T-434/11, Judgment of the General Court, 6 September 2013  92 Fulmen and Mahmoudian v. Council, Joined Cases T-439/10 and T-440/10, Judgment of the General Court, 21 March 2012  97 Iranian Offshore Engineering and Construction Co. v. Council, Case T-95/14, Judgement of the General Court (Seventh Chamber), 25 June 2015  174 nk Rosneft oao and Others v. Council of the European Union, Case T-715/14, Case before the General Court  90 nk Rosneft oao and Others v. Council of the European Union, Case T-69/15, Order of the General Court (Ninth Chamber) of 16 July 2015  90 Manufacturing Support & Procurement Kala Naft Co., Tehran v. Council of the European Union, Case T-509/10, Judgment of the General Court (Fourth Chamber), 25 April 2012  81, 96 Safa Nicu Sepahan v. Council, Case T-384/11, Judgment of the General Court, 25 November 2014  174 Yassin Abdullah Kadi v. Commission, Case T-85/09, Judgment of the General Court, 30 September 2010  173



European Court of Human Rights

Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the Former Yugoslav Republic of Macedonia, Application No. 60642/08, Judgment (Grand Chamber), 16 July 2014  41 Al-Jedda v. United Kingdom, Application No. 27021/08, Judgment (Grand Chamber), 7 July 2011  142 Al Dulimi and Montana Management Inc. v. Switzerland, (referred to the Grand Chamber 14 April 2014), 26 November 2013  174, 176, 177, 178, 181, 184 Al-Saadoon and Mufdhi v. United Kingdom, Application No. 61498/08, 2 March 2010  187 Issa and Others v. Turkey (Merits), Application No. 31821/96, Judgment, 16 November 2004, 41 e.h.r.r. 567 (2004)  201 Kopecky v. Slovakia, Application No. 44912/98, Judgment, 28 September 2004  41 Nada v. Switzerland, Application No. 10593/08, Judgment (Grand Chamber), 12 September 2012  142, 173, 174, 176, 180, 182 Strezo Trajkovski v. the Former Yugoslav Republic of Macedonia, Application No. 53320/99, Decision as to the Admissibility (Third Section), 7 March 2002  41 Vladimir Mikhaylovich Appolonov v. Russia, Application No. 67578/01, Decision (First Section), 29 August 2002  41 Zolotas v. Greece (No. 2), Application No. 66610/09, Judgment (First Section), 29 January 2013  41

xiv

Table of Cases

National Courts Canada

Abousfian Abdelrazik v. The Minister of Foreign Affairs and The Attorney General of Canada, Federal Court of Canada, Case No. T-727-08, Judgment of 4 June 2009, [2010] 1 f.c.r. 267, 2009 fc 580  173, 176, 177

France

Hajmaghani v. Giti Tajhiz Tec Co Ltd, Paris Appellate Court, Case No. 12/23757. Cour d’Appel de Paris, 22 May 1965, j.c.p. (1965) ii. 14274 bis  215

Hungary

Caviar case, Arbitration Court of the Chamber of Commerce and Industry of Budapest, Case No. vb 96074, Decision of 10 December 1996  222

Italy

Fincantieri – Cantieri Navali Italiani SpA and Oto Melara SpA vs. Ministry of Defence, Armament and Supply Directorate of Iraq, Republic of Iraq, Corte di Appello Genoa, 7 May 1994, xxi ybca 594 (1996)  219, 220

Netherlands

European Oil Company s.a. v. Sensor Nederland b.v., The Hague District Court, 17 September 1983  116, 118, 120, 122

Russia

Meat Yard llc v. Russian Agricultural Bank ojsc, Russian Federal Court, Case No. A21-8837/2012  222 Tekhnoline llc v. Roskarantinservice llc, Federal Commercial Court, Case No. A057583/2012  222, 223

Switzerland

D. c. Département fédéral de l’économie, Tribunal fédéral Suisse, Case No. 2A 785/2006, 23 January 2008  175 Nada c. Département fédéral de l’économie, Tribunal fédéral Suisse, Case No. 1A 45/2007, 14 November 2007  175



United Kingdom

AI-Kishtaini v. Shansal [2001] ewca Civ 264, Court of Appeal, 23 February 2001  218 Andrew Millar & Co Ltd v. Taylor & Co Ltd [1916] 1 KB 402  218

Table Of Cases

xv

dvb Bank se (dvb) and others v. Shere Shipping Company Ltd and others [2013] ewhc 2321 (Comm), Queen’s Bench Division, Commercial Court, 31 July 2013  218 Her Majesty’s Treasury v. Mohammed Jabar Ahmed and others (fc); Her Majesty’s Treasury v. Mohammed al-Ghabra (fc); R (on the application of Hani El Sayed Sabaei Youssef ) v. Her Majesty’s Treasury, [2010] uksc 2, Supreme Court, 27 January 2010  173, 174 Melli Bank plc v. Holbud Ltd [2013] ewhc 1506 (Comm.), Court of Chancery, 16 October 2013  218 R (on the application of Al-Jedda) (fc) v. Secretary of State for Defence, House of Lords, 12 December 2007  175 Soeximex sas v. Agrocorp International Pte Ltd [2011] ewhc 2743 (Comm), High Court, 31 October 2011  223



United States

Dresser industries Inc. and Dresser (France) s.a. v. Malcolm Baldridge, Secretary United States Department of Commerce, et al., District Court for the District of Columbia, 549 F. Supp. 108 (1982), Civ. A. No. 82–2385, 13 September 1982  116 Kiobel v. Royal Dutch Petroleum Co., Supreme Court, 133 S. Ct. 1659 (2013)  126 u.s. v. Aluminium C° of America, Circuit Court of Appeals, 2nd Cir, 148  F. 2d 416, 12 March 1945  119

Table of Treaties, Legislation, and Other Documents Treaties 1936 Additional Protocol Relative to Non-Intervention, 23 December 1936  3 1944 Articles of Agreement of the International Monetary Fund, 22 July 1944 Art. viii (2)(a)  37 Art. viii 3  37 1944 Convention on International Civil Aviation, 7 December 1944  39 1945 Charter of the United Nations, 26 June 1945  see index 1947 General Agreement on Tariffs and Trade, 30 October 1947  2, 23, 25, 35, 36 Art. I  35 1948 Charter of the Organization of American States, 30 April 1948 Art. 19  5 Art. 20  2, 5 1950 Convention for the Protection of Human Rights and Fundamental Freedoms, 4 November 1950  176 1952 Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, 20 March 1952 Art. 1  38, 41 1959  Treaty between Pakistan and the Federal Republic of Germany for the Promotion and Protection of Investments, 25 November 1959  209 1966 International Covenant on Civil and Political Rights, 16 December 1966 Art. 1 (2)  27 Art. 4  137 Art. 6 (1)  202 Art. 12 (2)  39 1966 International Covenant on Economic, Social and Cultural Rights, 16 December 1966 Art. 11 (1)  202 Art. 11 (2)  202 Art. 12  202 1968 Treaty on the Non-Proliferation of Nuclear Weapons, 1 July 1968  26 1969 American Convention on Human Rights “Pact of San José, Costa Rica”, 22 November 1969 Art. 21  38 1969 Vienna Convention on the Law of Treaties, 23 May 1969 Art. 31  186 Art. 32  185, 186

Table Of Treaties, Legislation, And Other Documents

xvii

Art. 61  212, 213 Art. 62  212, 213, 214 Art. 54  212 Art. 64  211, 212 1971 Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, 23 September 1971  186 1977 Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Armed Conflicts (Protocol I), 8 June 1977 Art. 54  202 Art. 69  202 Art. 70  202 1980 United Nations Convention on Contracts for the International Sale of Goods, 11 April 1980 Art. 79 (1)  221, 222 1982 United Nations Convention on the Law of the Sea, 10 December 1982 Art. 17  38 1989 Convention on the Rights of the Child, 20 November 1989 Art. 6 (1)  202 Art. 27 (1)  202 1990 Treaty on Conventional Armed Forces in Europe, 19 November 1990  283 1992 Treaty on European Union, 7 February 1992  80 1992 North American Free Trade Agreement, 17 December 1992 Art. 2102  23, 24, 25 1994 General Agreement on Tariffs and Trade 1994, Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994 Art. XI  35 Art. XX  35 Art. XXI  23, 33, 35, 36, 37 1994 General Agreement on Trade in Services, Annex 1B to the Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994  24, 33, 37 Art. i  37 Art. ii  37 Art. xiv-bis  23, 24, 33, 37 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1C to the Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994 Art. 73  23, 24 1994 Understanding on Rules and Procedures Governing the Settlement of Disputes, Annex 2 to the Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994 Art. 23  36

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1994  The Energy Charter Treaty, 17 December 1994 Art. 24 (3)  23, 25 1998  Rome Statute of the International Criminal Court, 17 July 1998 Art. 1  228 Art. 5  239 Art. 13 (b)  229 Art. 14  229 Art. 15  229 Art. 57 (3)(e)  241, 244 Art. 58 (1)  231 Art. 58 (7)  236 Art. 75 (2)  239 Art. 75 (5)  239, 244 Art. 77 (2)  239 Art. 79 (2)  239 Art. 89 (1)  236 Art. 93 (1)(k)  242 Art. 93 (9)(b)  243 Art. 109 (1)  239, 244 2000 Constitutive Act of the African Union, 11 July 2000 Art. 3 (g)(h)  138 Art. 4 (9)  5 2004 Relationship Agreement between the United Nations and the International Criminal Court, 4 October 2004 Art. 3  230 Art. 5  230 Art. 18  230 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, 2 December 2004 Art. 21 21 Charter of Fundamental Rights of the European Union (proclaimed on 7 December 2000, adopted on 12 December 2007)  183 Art. 51 (1)  86 2007 Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, 13 December 2007  86, 183, 253 Treaty on the Functioning of the European Union (Consolidated version, 26 October 2012) Art. 75  85 Art. 83 (1)  90 Art. 83 (2)  90, 91 Art. 215  73, 83, 85, 86, 87, 91, 95, 100, 141

Table Of Treaties, Legislation, And Other Documents Art. 238 (4)  82 Art. 258  94 Art. 259  94 Art. 260  94 Art. 263  95, 96, 101 Art. 275 (2)  96 Art. 288  87 Art. 291  87 Art. 296  97 Art. 346  83 Treaty on European Union (Consolidated version, 26 October 2012) Art. 2  183 Art. 3 (5)  74, 138 Art. 6 (1)  183 Art. 21  80, 183 Art. 26 (1)  80 Art. 26 (2)  81 Art. 28  80 Art. 29  76, 80, 81, 83, 100 Art. 30  80 Art. 31  80 Art. 31 (1)  82, 83 Art. 31 (2)  82 Art. 32  71 Art. 34 (2)  81 Art. 39  80



United Nations

sc Res 232 (1966), 16 December 1966  132 sc Res 418 (1977), 4 November 1977  131 sc Res 841 (1993), 16 June 1993  131 sc Res 917 (1994), 6 May 1994  16 sc Res1267 (1999), 15 October 1999  141, 146, 155, 156, 178 sc Res 1333 (2000), 19 December 2000  140, 156 sc Res 1572 (2004), 15 November 2004  154 sc Res 1591 (2005), 29 March 2005  154 sc Res 1593 (2005), 31 March 2005  229 sc Res 1596 (2005), 3 May 2005  240, 241 sc Res 1643 (2005), 15 December 2005  240

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sc Res 1698 (2006), 31 July 2006  230 sc Res 1727 (2006) 15 December 2006  237, 240 sc Res 1737 (2006), 23 December 2006  18, 34, 154 sc Res 1747 (2007), 24 March 2007  18, 34 sc Res 1782 (2007), 29 October 2007  237, 240 sc Res 1803 (2008), 3 March 2008  18, 34 sc Res 1807 (2008), 31 March 2008  230, 237, 240 sc Res 1835 (2008), 27 September 2008  18 sc Res 1842 (2008), 29 October 2008  237, 240 sc Res 1844 (2008), 20 November 2008  154, 164, 241 sc Res 1893 (2009), 29 October 2009  237, 240 sc Res 1929 (2010), 9 June 2010  18, 34 sc Res 1946 (2010), 15 October 2010  237, 240 sc Res 1988 (2011), 17 June 2011  157, 236 sc Res 1989 (2011), 17 June 2011  157, 168, 177, 236 sc Res 1970 (2011), 26 February 2011  130, 229, 230, 233, 236, 238, 240, 241, 243 sc Res 1973 (2011), 17 March 2011  16, 212, 241 sc Res 1975 (2011), 30 March 2011  230, 237, 240 sc Res 1980 (2011), 28 April 2011  237, 240 sc Res 2045 (2012), 26 April 2012  237, 240 sc Res 2048 (2012), 18 May 2012  154, 236 sc Res 2049 (2012), 7 June 2012  34 sc Res 2101 (2013), 25 April 2013  237, 240 sc Res 2134 (2014), 28 January 2014  137, 230, 234, 236, 237, 240, 241 sc Res 2140 (2014), 26 February 2014  154, 164, 236, 241 sc Res 2153 (2014), 29 April 2014  237, 240 sc Res 2174 (2014), 27 August 2014  230 sc Res 2196 (2015), 22 January 2015  237, 240 sc Res 2198 (2015), 29 January 2015  237, 240 sc Res 2206 (2015), 3 March 2015  154, 163, 236, 241 sc Res 2213 (2015), 27 March 2015  130 sc Res 2219 (2015), 28 April 2015  237, 240 u.n. Doc. S/2006/997, Report of the Informal Working Group of the Security Council on General Issues of Sanctions, 22 December 2006  129, 145, 169 u.n. Doc. S/2011/808, Letter dated 29 December 2011 from the Chair of the Security Council Committee established pursuant to resolution 1572 (2004) concerning Côte d’Ivoire addressed to the President of the Security Council, Annex  237 u.n.  Doc. S/2012/860, Letter dated 20 November 2012 from the Permanent Representatives of Costa Rica, Jordan and Liechtenstein to the United Nations addressed to the President of the Security Council  245

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u.n. Doc. S/2014/725, Briefing by the Ombudsperson at the Security Council’s Open Debate on ‘Working Methods of the Security Council’, ‘Enhancing Due Process in Sanctions Regimes’, 23 October 2014  158 u.n. Doc. S/2014/793, Letter dated 5 November 2014 from the Permanent Representative of Australia to the United Nations addressed to the Secretary-General  18 sc Meeting Records, u.n. Doc. S/pv.6849 (Resumption 1), 6849th Meeting, 17 October 2012  235, 245 sc Meeting Records, u.n. Doc. S/pv.6974, 6974th Meeting, 5 June 2013  235 sc Meeting Records, u.n. Doc. S/pv.7080, 7080th Meeting, 11 December 2013  235 sc Meeting Records, u.n. Doc. S/pv.7199, 7199th Meeting, 17 June 2014  235 sc Meeting Records, u.n. Doc. S/PV.7285 (Resumption 1), 7285th Meeting, 23 October 2014  235, 238, 245 sc Meeting Records, u.n. Doc. S/PV.7323, 25 November 2014  11 sc  Committee established pursuant to Resolution 1533 (2004) concerning the Democratic Republic of the Congo, Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 6 August 2010  238 sc  Committee established pursuant to Resolution 1970 (2011) concerning Libya, Provisional Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 25 March 2011 and revised on 25 October 2011  238 sc Committee established pursuant to Resolution 1591 (2005) concerning the Sudan, Guidelines of the Committee for the Conduct of Its Work, as revised and adopted on 23 December 2013  235 sc Committee established pursuant to Resolution 2127 (2013) concerning the Central African Republic, Guidelines of the Committee for the Conduct of Its Work, as revised and adopted on 19 February 2014  238 sc Committee established pursuant to Resolution 1572 (2004) concerning Côte d’Ivoire, Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 13 June 2005 and revised on 1 July 2014  237, 238 1948 ga Res 217A (iii), 10 December 1948  202 1965 ga Res 2131 (xx), 21 December 1965  4 1970 ga Res 2625 (xxv), 24 October 1970  3, 4, 5, 7, 8, 197 1974 ga Res 3281 (xxix), 12 December 1974  4, 197 1974 ga Res 3314 (xxix), 14 December 1974 14 1981 ga Res 36/103, 9 December 1981  4 1987 ga Res 42/22, 18 November 1987  5 1987 ga Res 42/173, 11 December 1987  3 1992 ga Res 47/19, 24 November 1992  124 2012 ga Res 67/170, 20 December 2012  13

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2014 ga Res 68/276, 24 June 2014  179, 181 2014 ga Res 69/5, 28 October 2014 124 hrc Res A/HRC/27/L.2, 26 September 2014  13 hrc Res A/HRC/AC/13/CRP2, 30 July 2014  14 cescr, General Comment No. 8 (1997), The relationship between economic sanctions and respect for economic, social and cultural rights, un Doc. E/C.12/1997/8, 12 December 1997  172 Report of the Secretary-General’s High-level Panel on Threats, Challenges and Change, ‘A more secure world: our shared responsibility’, u.n. Doc. A/59/565, 2 December 2004  129 Report of the Secretary-General, ‘Human rights and unilateral coercive measures’, u.n. Doc. A/68/211, 23 July 2013  14 ilc, Draft Articles on the Law of Treaties, with commentaries, Article 58, u.n. Doc. A/6309/Rev.1 (1966)  213 ilc, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, u.n. Doc. A/RES/56/83 (2001)  34, 200, 216 Art. 17......................................216 Art. 18......................................216 Art. 21 (1)...................................17 Art. 22.......................................107 Art. 48.............................28, 29, 40 Art. 49................12, 40, 75, 139, 292 Art. 50...........................26, 139, 292 Art. 51...........................40, 139, 292 Art. 52...............................139, 292 Art. 53...............................139, 292 Art. 54..........28, 29, 75, 139, 144, 292 Art. 57...............................75, 216 ilc, Fragmentation of International Law: Difficulties arising from the Diversification and Expansion of International Law, Report of the Study Group of the Interna­ tional Law Commission, finalized by M. Koskenniemi, A/CN.4/L.682, 13 April 2006  187 ilc, Annex E – Extraterritorial jurisdiction, Report of the International Law Commission to the United Nations General Assembly, u.n. Doc. A/61/10, 3 November 2006  125

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European Union

Council Regulation (ec) No. 539/2001 of 15 March 2001, listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement  84 Council Regulation (ec) No. 2580/2001 of 27 December 2001, on specific restrictive measures directed against certain persons and entities with a view to combating terrorism  133 Council Regulation (ec) No. 881/2000 of 27 May 2002, imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (ec) No. 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan  133 Council Regulation (eu) No. 194/2008 of 25 February 2008, renewing and strengthening the restrictive measures in respect of Burma/Myanmar and repealing Regulation (ec) No. 817/2006  224 Council Regulation (eu) No. 45/2014 of 20 January 2014, amending Regulation (eu) No. 204/2011 concerning restrictive measures in view of the situation in Libya  223 Council Regulation (eu) No. 692/2014 of 23 June 2014, concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol  88 Council Regulation No. 1351/2014 of 18 December 2014, amending Regulation (eu) No. 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol  62 Council Decision 2010/232/CFSP of 26 April 2010, renewing restrictive measures against Burma/Myanmar  261 Council Decision 2010/413/CFSP of 26 July 2010, concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP  34 Council Decision 2010/573/CFSP of 27 September 2010, concerning restrictive mea­sures against the leadership of the Transnistrian region of the Republic of Moldova  84 Council Decision 2011/72/CFSP of 31 January 2011, concerning restrictive mea­sures directed against certain persons and entities in view of the situation in Tunisia  260 Council Decision 2011/172/CFSP of 21 March 2011, concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt  260 Council Decision 2014/145/CFSP of 17 March 2014, concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine  133, 224, 278

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Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine  81, 85 Council Implementing Decision 2015/383/CFSP of 6 March 2015, implementing Decision 2013/255/CFSP concerning restrictive measures against Syria  77 Council Decision (cfsp) 2015/521 of 26 March 2015  261 Council Decision (cfsp) 2015/971 of 22 June 2015, amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, oj L 157, 23 June 2015  81 Council Common Position 2001/931/CFSP of 28 December 2001 on the application of specific measures to combat terrorism  133 Council Common Position 2002/145/CFSP of 21 February 2002, concerning restrictive measures against Zimbabwe  133 Council Common Position of 27 May 2002 concerning restrictive measures against Usama bin Laden, members of the Al-Qaida organisation and the Taliban and other individuals, groups, undertakings and entities associated with them and repealing Common Positions 96/746/CFSP, 1999/727/CFSP, 2001/154/CFSP and 2001/771/CFSP  156 Council Common Position 2003/280/CFSP of 16 April 2003, in support of the effective implementation of the mandate of the icty  265 Council Common Position 2007/750/CFSP of 19 November 2007, amending Common Position 2006/318/CFSP renewing restrictive measures against Burma/ Myanmar  258 Council Document 15579/03, Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy, 8 December 2003  11, 72 Council Document 5603/04, Establishment of a Sanctions formation of the Foreign Relations Counsellors Working Party (RELEX/Sanctions), 22 January 2004  72 Council Document 10198/1/04, Basic Principles on the Use of Restrictive Measures (Sanctions), 7 June 2004  11, 72 Council Document 15114/05, Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy, 2 December 2005  72 Council Document 11679/07, eu Best Practices for the effective implementation of restrictive measures, 9 July 2007  11 Council Document 17464/09, Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy, 15 December 2009  72

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Council Document 11205/12, Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy, 15 June 2012  72 Council Document 9068/13, Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy – new elements, 30 April 2013  72 Council Document 10254/15, Restrictive measures (Sanctions) – Update of the eu Best Practices for the effective implementation of restrictive measures, 24 June 2015  73 Common Military List of the European Union, adopted by the Council on 11 March 2013, oj 2014 C 107, 9 April 2014  84 Council Conclusions, euco 11/15, Brussels, 20 March 2015  81 High Representative of the Union for Foreign Affairs and Security Policy, ‘Declaration by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Implementing Decision 2015/383/CFSP implementing Council Decision 2013/255/CFSP concerning restrictive measures against Syria’, 10 April 2015, Press Release 169/2015  77 Commission of the European Communities, Comments on the u.s. regulations concerning trade with the ussr, 21 i.l.m. (1982)  117, 121 European Commission, Communication of 20 September 2011, Towards an eu Criminal Policy: Ensuring the effective implementation of eu policies through criminal law, com(2011) 573 final  91 European Commission Notice of 16 December 2014, Commission Guidance note on the implementation of certain provisions of Regulation (eu) No. 833/2014, C(2014) 9950 final  95 European Commission, Restrictive Measures in force (Art. 215 tfeu), (Regulations based on Article 215 tfeu and Decisions adopted in the framework of the Common Foreign and Security Policy), updated 30.9.2015  73 European Parliament Resolution of 4 September 2008 on the evaluation of eu sanctions as part of the eu’s actions and policies in the area of human rights (2008/2031(INI))  86 European Parliament, Recommendation to the Council of 2 February 2012 on a consistent policy towards regimes against which the eu applies restrictive measures, when their leaders exercise their personal and commercial interests within eu borders (2011/2187(INI))  78, 86 European Parliament Resolution of 11 March 2015 on the 2014 Progress Report on Serbia (2014/2949(RSP))  78

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osce

Helsinki Final Act of csce, 1 August 1975  3, 6, 7



National Legislation

Cyprus

Criminal Code, Article 136 (‘Disobedience to statutory duty’) and Article 137 (‘Disobedience of lawful orders’)  89

Italy

Law of 14 December 2001, n. 431, Gazzetta Ufficiale della Repubblica italiana n. 290 of 14 December 2001  95 Legislative Decree of 22 June 2007, Gazzetta Ufficiale della Repubblica italiana, n. 172 of 26 July 2007  95 Ministerial Decree of 20 October 2010, n. 203, Gazzetta Ufficiale della Repubblica itali­ ana, n. 28 of 7 December 2010  95

Slovenia

Act Relating to Restrictive Measures Introduced or Implemented in Compliance with Legal Instruments and Decisions adopted within International Organi­sations, Uradni list rs, No. 127/2006, ZOUPAMO  89



United States

Trading with the Enemy Act of 1917 (also known as the Trading with the Enemy Act), Pub. L. 65–91, 6 October 1917, 40 Stat. L. 411, 12 u.s.c. §§ 95a–95b and 50 U.S.C. App. §§ 1–44  115 Treasury Public Circular No. 18, 30 March 1942, 7 fr 2503, 1 April 1942.  113 Export Administration Amendments Act 1977, Pub. L. 95–52, 22 June 1977, 91 Stat. 235  115 International Emergency Economic Powers Act (ieepa), Title ii of Pub. L. 95–223, 28 December 1977, 91 Stat. 1626, 50 U.S.C. § 1701 et seq.  52, 54, 55, 135 National Emergencies Act, Act concerning the Powers of the President in Time of War, Pub. L. 95–223, 28 December 1977, 50 u.s.c. § 1601 et seq.  113 Ex, Pub. L. 96-72, 29 September 1979, 93 Stat. 503, 50 App U.S.C. § 2401 et seq.  113, 114 Cuban Pub. L. 102–484, 23 October 1992, 106 Stat. 2575, 22 U.S.C. §§ 6001-10  117, 118 Iran and Libya Sanctions Act (ilsa), Pub. L. 104–172, Enacted – Signed by the President on 5 August 1996  110 Stat. 1541  52

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Iran Sanctions Act of 1996 (isa), as Amended, 50 u.s.c. § 1701 note  34, 143 Cuban Liberty and Democratic Solidarity (Libertad) Act of 12 March 1996, Pub. L. 104–114, Title 22, 110 Stat. 785, 22 u.s.c. § 6021  119, 143, 159 Foreign Trade Antitrust Improvements Act of 1982 (ftaia) (limiting the scope of the Sherman Act and the Federal Trade Commission Act), 15 u.s.c. § 6a (2012)  120 Venezuela Defense of Human Rights and Civil Society Act of 2014, Pub. L. 113–278, (2013–2014), S.2142  135 Cuban Assets Control Regulations, 31 c.f.r. Part 515  114 Foreign Assets Control Regulations, 31 c.f.r. Part 500  114 Iranian Transactions Regulations, Treasury Department, 31 c.f.r. Part 560  116 Transactions Control Regulations, 31 c.f.r.Part 505  114 Regulations of the Trade Department, fr 47, No. 2, 1982  115 Regulations of the Trade Department, fr 47, No. 3, 1982  115 Nicaragua Trade Control Regulations, fr 50, No. 91, 1985  116 Amendment of Oil and Gas Controls to the ussr, 15 c.f.r. Parts 376, 379, 385  119 Executive Order 12543 – Prohibiting trade and certain transactions involving Libya, 51 fr 873, 3 c.f.r., 7 January 1986  116 Executive Order 12544 – Blocking Libyan Government property in the United States or held by u.s. persons, 51 fr 1235, 3 c.f.r., 8 January 1986  116 Executive Order 12722 – Blocking Iraqi Government Property And Prohibiting Transactions With Iraq, 55 fr 31803, 3 August 1990  134 Executive Order 12957 – Prohibiting u.s. involvement with petroleum development in Iran, 15 March 1995  116 Executive Order 12959 – pursuant to the International Emergency Economic Powers Act (“ieepa”) as well as the isdca, substantially tightening sanctions against Iran, 6 May 1995  116 Executive Order 13047 – Prohibiting New Investment in Burma, 20 May 1997  116 Executive Order 13059 – Prohibiting Certain Transactions With Respect to Iran, 19 August 1997  116 Executive Order 13067 – Blocking Sudanese Government Property and Prohibiting Transactions With Sudan, 62 fr 59989, 3 November 1997  116, 134 Executive Order 13219 – Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans, 68 fr 34777, 29 June 2001  134 Executive Order 13288 – Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe, 68 fr 11457, 10 March 2003  134 Executive Order 13310 – Blocking Property of the Government of Burma and Prohibiting Certain Transactions, 68 fr 44853, 30 July 2003  134

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Executive Order 13338 – Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria, 69 fr 26751, 13 May 2004  134 Executive Order 13413 – Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo, 71 fr 64105, 31 October 2006  134 Executive Order 13396 – Blocking of Property of Certain Persons Contributing to the conflict in Côte d’Ivoire, 71 fr 7389, 10 February 2006  134 Executive Order 13405 – Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus, 71 fr 35485, 20 June 2006  134 Executive Order 13441 – Blocking Property Of Persons Undermining The Sovereignty Of Lebanon Or Its Democratic Processes And Institutions, 72 fr 43499, 3 August 2007  134 Executive Order 13466 – Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals, 73 fr 36787, 27 June 2008  134 Executive Order 13536 – Blocking Property of Certain Persons Contributing to the Conflict in Somalia, 13 April 2010  134 Executive Order 13566 – Blocking Property and Prohibiting Certain Transactions Related to Libya, 76 fr 11315, 25 February 2011  134 Executive Order 13611 – Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen, 77 fr 29533, 16 May 2012  134 Executive Order 13606 – Blocking the Property and Suspending Entry Into the United States of Certain Persons With Respect to Grave Human Rights Abuses by the Governments of Iran and Syria via Information Technology, 22 April 2012  52 Executive Order 13660 – Blocking Property of Certain Persons Contributing to the Situation in Ukraine, 79 fr 13493, 6 March 2014  134 Executive Order 13664 – Blocking Property of Certain Persons with Respect to South Sudan, 79 fr 19283, 3 April 2014  134



Institut de Droit International

Resolution, ‘Obligations Erga Omnes in International Law’, 71 (ii) aidi 287 (Krakov, 2005)  29

List of Abbreviations au African Union bits Bilateral Investment Treaties cfe-Treaty Treaty on Conventional Armed Forces in Europe cfsp Common Foreign and Security Policy cisg Convention on Contracts for the International Sale of Goods cjeu Court of Justice of the European Union csce Conference on Security and Cooperation in Europe darsiwa Draft Articles on Responsibility of States for Internationally Wrongful Acts ECtHR European Court of Human Rights eeas European External Action Service eu, e.u. European Union fcn Treaties of Friendship, Commerce and Navigation ga General Assembly gats General Agreement on Trade in Services gatt General Agreement on Tariffs and Trade hr High Representative of the Union for Foreign Affairs and Security Policy icc International Criminal Court iccp International Covenant on Civil and Political Rights icescr International Covenant on Economic, Social and Cultural Rights icj International Court of Justice icty International Criminal Tribunal for the Former Yugoslavia ieepa International Emergency Economic Powers Act iias International Investment Agreements ilc International Law Commission nafta North American Free Trade Agreement nsas Non-State Actors oas Organization of American States osce Organization for Security and Co-operation in Europe rcadi Recueil des Cours de l’Académie de Droit International de La Haye sc Security Council teu Treaty on European Union tfeu Treaty on the Functioning of the European Union tnp Treaty on the Non-Proliferation of Nuclear Weapons trips Agreement on Trade-Related Aspects of Intellectual Property Rights udhr Universal Declaration of Human Rights uk, u.k. United Kingdom

xxx un, u.n. un sc unita us, u.s. vclt wmd wto

List Of Abbreviations United Nations United Nations Security Council National Union for the Total Independence of Angola United States of America Vienna Convention on the Law of Treaties Weapons of Mass Destruction World Trade Organization

List of Contributors Andrea Atteritano Counsel in the Litigation & Arbitration Practice, Hogan Lovells, and luiss University, Rome. Charlotte Beaucillon Associate Professor of Public Law, Sorbonne Research Centre in International and European Law (iredies) – Sorbonne Law School, University Paris 1 Panthéon-Sorbonne. Michael Bothe Professor Emeritus, University of Frankfurt. Maria Beatrice Deli Associate Professor, luiss University, Rome, and Università degli Studi del Molise. Bryan R. Early Associate Professor of Political Science, Director of the Center for Policy Research, and Director of the Project on International Security, Commerce, and Economic Statecraft, University at Albany, State University of New York. Marco Gestri Professor of eu and International Law, University of Modena and Reggio Emilia, and Adjunct Professor of International Law, The Johns Hopkins University, sais Europe. Francesco Giumelli Assistant Professor, Department of International Relations and International Organization (irio), University of Groningen. Daniel H. Joyner Professor of Law, University of Alabama School of Law. Joachim Krause Professor of Political Science, Chair for International Relations, University of Kiel.

xxxii

List Of Contributors

Monica Lugato Professor of International Law, lumsa University, Rome. Marina Mancini Associate Professor of International Law, Mediterranean University of Reggio Calabria, and Adjunct Professor of International Criminal Law, luiss University. Thilo Marauhn Professor of Public Law, International Law and European Law, Justus-LiebigUniversität Gießen. Natalino Ronzitti Professor Emeritus of International Law, luiss University, and Member of the Institut de Droit International, and Scientific Advisor of the Istituto Affari Internazionali (iai). Ignaz Stegmiller Coordinator for International Programs of the Faculty of Law, Franz von Liszt Institute for International and Comparative Law. Nigel D. White Professor of Public International Law and Head of School, School of Law, University of Nottingham, uk.

chapter 1

Sanctions as Instruments of Coercive Diplomacy: An International Law Perspective Natalino Ronzitti Abstract Coercive diplomacy may assume various manifestations ranging from threat or use of force to economic pressure and retorsions. While the law on use of force is well settled at least in theory, the lawfulness of other forms of coercion is more difficult to conceptualize and the principle of non-intervention as a limit to coercion is not easy to grasp. This Chapter argues that only the Security Council is entitled to impose sanctions, while States individually or collectively may only resort to countermeasures against an international wrongdoer. The relations between sanctions and countermeasures have not yet been fully clarified notwithstanding the work done by the ilc. A contentious point is still how to limit sanctions and countermeasures from the perspective of human rights/humanitarian law. Weaker States subject to countermeasures are unable to effectively counter them. More powerful subjects react by resorting to counter-sanctions which are often detrimental for the economy of those States resorting to countermeasures.

Keywords coercion – non-intervention – sanctions – countermeasures – counter-sanctions

1 Coercion Coercion may assume various forms that have in common the will of a State to force another State into taking a particular action. 1.1 Military Military coercion implemented through the threat or use of force is illegal unless exerted in self-defence or mandated by the un sc. In both instances there are limits placed upon coercion as it must be exercised only to repel an armed attack and restore the sovereignty of the aggrieved State or within the

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_002

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limit mandated by the sc. Examples of the threat to use force are more controversial. While there are instances that fall squarely within the prohibition of Article 2 (4) of the un Charter, others are less certain. An ultimatum is a clear example of the former, while the detention and posture of a notable quantity of weapons and missiles is an example of the latter. The icj stated that the detention of a considerable quantity of weapons or the nuclear posture contained within the limits necessary to dissuade the potential adversary to resort to nuclear weapons are not a violation of Article 2 (4).1 Other examples of controversial threats include military exercises in disputed waters, showing the flag therein or exercising the right of passage or transit in contested international straits. 1.2 Economic Economic coercion is even more controversial. Barry E. Carter, quoting Lowenfeld, affirms that the term can be defined broadly to include the use, or threat to use, “measures of an economic – as contrasted with diplomatic or military – character taken to induce [a target State] to change some policy or practices or even its governmental structure”.2 Tom Farer gives an even more encompassing definition, labelling economic coercion as: “[…] efforts to project influence across frontiers by denying or conditioning access to a country’s resources, raw materials, semi- or finished products, capital, technology, services or consumer” and gives as examples of coercion the threat not to apply the most favoured nation clause under the gatt (1947 and 1994), while the non-concession of any aid or assistance would not exceed the threshold of coercion.3 A modern example of economic coercion might be represented by using malware, not amounting to a cyber attack, for disrupting the financial system of a foreign State, even though it has been argued that it may qualify as a cyberattack amounting to the use of force prohibited under Article 2 (4) of the un Charter. There are a number of treaties or un declarations banning economic coercion, without giving any definition. The constitutive instrument of the oas contains a provision outlawing economic coercion. According to Article 20 of the oas Charter “No State may use or encourage the use of coercive measures 1 Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion of 8 July 1996, i.c.j. Reports 1996, pp. 246–247; Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Judgment of 27 June 1986, i.c.j. Reports 1986, p. 135. 2 B.E. Carter, ‘Economic Coercion’, Max Planck Encyclopedia of Public International Law (2009). 3 T. Farer, ‘Political and Economic Coercion in Contemporary International Law’, 79 ajil (1985), p. 405 ff.

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3

of an economic or political character in order to force the sovereign will of another State and obtain from it advantages of any kind”. Other instruments include the ga Declaration on Friendly Relations (2625-xxv), the ga Resolution 42/173 on Economic Measures as a Means of Political and Economic Coercion against Developing Countries of 1987 and the Helsinki Final Act of 1975 (Principle vi) of the csce. 1.3 Political The notion of political intervention and the delimitation of its legality are even more difficult to define. There is a danger prohibiting diplomacy or any form of intercourse between States. The offer of good offices or mediation for dispute-settlement are forms of intervention that are not prohibited under international law. The same is true for representations as to human rights implementation or treatment of minorities in a foreign State. However, political pressure accompanied by a threat to use force is not permitted. The conclusion is that political intervention is not prohibited unless dictatorial, but there is a grey area in which the legality of actions is doubtful, for instance hostile propaganda or financing opposition parties or corrupting State officials in order to obtain a change of government. 2

The Principle of Non-Intervention

The principle of non-intervention finds its origins on the American continent and arose due to the need of the Latin-American State to cope with intrusive actions by the us which could not be defined as war. Offut for instance recalls that between 1813 and 1927 the us intervened more than 60 times in order to protect their citizens.4 Even the European Powers intervened in the American continent, for instance Germany, Great Britain and Italy blocked the coast of Venezuela in order to recover their credits (1902–1903). At diplomatic level, the first manifestation of the policy of non-intervention may be traced in the Additional Protocol on Non-Intervention of 23 December 1936 dealing with inter-American relations, which states: The High Contracting Parties declare inadmissible the intervention of any one of them directly or indirectly, and for whatever reason, in the internal or external affairs of the Parties. 4 M. Offut, The Protection of Citizens Abroad by the United States (Baltimore: The John Hopkins Press, 1928), p. 12 ff.

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However the Protocol did not define the term ‘intervention’. After the entry into force of the un Charter, the threat and use of force have been definitively outlawed with the consequence that it is not strictly necessary to codify the principle of non-intervention vis-à-vis those actions that encompass the threat or use of armed force. The practical relevance of the principle of non-intervention is thus confined to those actions which do not involve the threat or use of force by which a State tries to influence the conduct of another State. Even though the icj, as we shall see, has affirmed that conduct involving a manifestation of a policy of force constitutes a violation of both Article 2 (4) of the un Charter and the Principle of non-intervention. It is difficult to individuate the category of actions that do not constitute threat or use of force but are nonetheless a violation of the principle of nonintervention. As already noted simple interferences such as a proposal of devolving a controversy to judicial or arbitral settlement, a protest or a request to abide by international law are not intervention. The same is true for a criticism to the form of government. Otherwise diplomacy and foreign policy would be prohibited. The tendency to dilute the principle of non-intervention by Latin American and Afro-Asian States is aimed at rendering illegal conduct and actions which fall within the normal activity of foreign relations (for instance a criticism raised vis-à-vis a foreign State) or the establishment of military alliances. In this connection ga Resolution 36/103 (Declaration on the Inadmissibility of Intervention and Interference in the Internal Affairs of States) sets out the prohibition on strengthening existing military blocs or creating new ones. The Resolution was adopted with the contrary vote or the abstention of Western countries. It is not an easy task to enumerate the actions constituting intervention. Article 2 (7) of the un Charter, defining domestic jurisdiction, is not of any help since it regulates the relations between the un and the member States and not those among the States themselves. One therefore has to take into consideration a number of ga Resolutions as well other regional treaties or declarations. As far as ga Resolutions are concerned, reference should be made to Resolutions 2131 (xx), 2625 (xxv) and 36/103 which are dedicated to the principle of non-intervention.5 In addition Article 32 of Resolution 3281 (xxix) on the Charter of Economic Rights and Duties of States and paragraphs 7–8 of 5 The list also includes ga Res. 3171 (xxviii) on Permanent Sovereignty over National Resources, 17 December 1973, u.n. Doc. A/RES/3171, which emphasize the duty to refrain from military, political, economic or any other form of coercion aimed against the territorial integrity of any State and the exercise of its national jurisdiction.

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Resolution 42/22 on the Declaration on the Enhancement of the Effectiveness of the Principle of Refraining from the Threat or Use of Force in International Relations (18 November 1987) should be quoted. According to the above Resolutions and in particular according to Resolution 2625 (xxv) the following actions constitute a violation of the principle of non-intervention: – “armed intervention and all other forms of interference or attempted threats against the personality of the State or against its political, economic and cultural elements”; – “organize, assist, foment, finance incite or tolerate subversive activities toward the violent overthrow of the regime of another State”; – “interfere in civil strife in another State”; – “the use of force to deprive peoples of their national identity”; – “to 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 and to secure from it advantages of any kind”. It is easy to deduct from the above enumeration that coercion is a necessary ingredient of the notion of prohibited intervention and that only this kind of action may constitute a violation of the principle of non-intervention. The second category of instruments regulating intervention is regional treaties and declarations. The Charter of the Organization of American States contains two provisions: According to Article 19: No State or group of States has the right to intervene, directly or indirectly, for any reason whatever, in the internal or external affairs of any other State. The foregoing principle prohibits not only armed force but also any other form of interference or attempted threat against the personality of the State or against its political, economic, and cultural elements. Article 20, already quoted, affirms that: No State may use or encourage the use of coercive measures of an economic or political character in order to force the sovereign will of another State and obtain from it advantages of any kind. Article 4 (9) of the Constitutive Act of the African Union establishes the “noninterference by any member State in the internal affairs of another State”.

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For regional instruments not having treaty value the csce Helsinki Final Act (1975) should be quoted. The principle of non-intervention is regulated in Chapter vi of the Declaration of Principles which states: The participating States will refrain from any intervention, direct or indirect, individual or collective, in the internal or external affairs falling within the domestic jurisdiction of another participating State, regardless of their mutual relations. They will accordingly refrain from any form of armed intervention or threat of such intervention against another participating State. They will likewise in all circumstances refrain from any other act of military, or of political, economic or other coercion designed to subordinate to their own interest the exercise by another participating State of the rights inherent in its sovereignty and thus to secure advantages of any kind. Accordingly, they will, inter alia, refrain from direct or indirect assistance to terrorist activities, or to subversive or other activities directed towards the violent overthrow of the regime of another participating State. Therefore from the documents referred to, one may draw this preliminary conclusion: (1) Intervention implies coercion; (2) The coercion, to constitute intervention, should be unlawful. The former element is mentioned in all the above quoted documents. The latter comes from an interpretation of the system of international law, for not all conducts corresponding to coercion are unlawful, but only those violating a norm of international law. Unlawful sanctions or unlawful countermeasures may constitute a kind of prohibited intervention. 3

The Principle of Non-Intervention in the Case-Law of the icj

The icj has dealt with the principle of non-intervention mainly in three cases: The Corfu Channel Case (1949), Nicaragua v. United States (1986) and drc v. Uganda (2005). In all three judgments the principle of non-intervention is intermingled with that of the prohibition of threat and use of force.

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In the first case the Court had to adjudicate a case arising from the uk entering Albanian territorial waters to sweep for mines in order to procure the evidence to submit to the Court. In a well-known passage the Court stated: The Court cannot accept such a line of defence. The Court can only regard the alleged right of intervention as the manifestation of a policy of force, such as has, in the past, given rise to most serious abuses and such as cannot, whatever be the present defects in international organization, find a place in international law. Intervention is perhaps still less admissible in the particular form it would take here; for, from the nature of things, it would be reserved for the most powerful States, and might easily lead to perverting the administration of international justice itself.6 This passage was recalled by the Court in its judgment in Nicaragua v. United States. First of all the Court pointed out that the principle of non-intervention belongs to customary international law. To prove the customary nature of the principle, the Court quoted ga Resolution 2625 (xxv) on friendly relations and the principle of non-intervention embodied in Chapter vi of the Helsinki Final Act (1975). The Court, however, did not totally identify the principle of nonintervention with the provisions embodied in the two instruments and was obliged to admit that one of the fundamental problems is defining the precise content of the principle under consideration. To this end the Court specified the nature of the action constituting intervention and its content. Concerning the first point, the Court affirmed that coercion is an essential element of the prohibition of non-intervention. Regarding the second the Court, after having affirmed that the principle forbids direct or indirect intervention in the internal or external affairs of a State, underlines that the action to be forbidden should embody items that the principle of sovereignty leaves to the choice of States, such as the economic, political, social and cultural system and the formulation of foreign policy. It is notable that the Court did not affirm a total autonomy of the principle of non-intervention and the prohibition of the threat or use of force, in the sense of forbidding a distinct category of actions. The Court specified that there are actions which constitute a prohibition on non-intervention as well of the use of force in international relations.

6 Corfu Channel (United Kingdom of Great Britain and Northern Ireland v. Albania), Judgment of 9 April 1949, i.c.j. Reports 1949, p. 35.

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The most quoted passage is the following: Notwithstanding the multiplicity of declarations by States accepting the principle of non-intervention, there remain two questions: first, what is the exact content of the principle so accepted, and secondly, is the practice sufficiently in conformity with it for this to be a rule of customary international law? As regards the first problem – that of the content of the principle of non-intervention – the Court will define only those aspects of the principle which appear to be relevant to the resolution of the dispute. In this respect it notes that, in view of the generally accepted formulations, the principle forbids al1 States or groups of States to intervene directly or indirectly in internal or external affairs of other States. A prohibited intervention must accordingly be one bearing on matters in which each State is permitted, by the principle of State sovereignty, to decide freely. One of these is the choice of a political, economic, social and cultural system, and the formulation of foreign policy. Intervention is wrongful when it uses methods of coercion in regard to such choices, which must remain free ones. The element of coercion, which defines, and indeed forms the very essence of, prohibited intervention, is particularly obvious in the case of an intervention which uses force, either in the direct form of military action, or in the indirect form of support for subversive or terrorist armed activities within another State. As noted above (paragraph 191), General Assembly Resolution 2625 (xxv) equates assistance of this kind with the use of force by the assisting State when the acts committed in another State “involve a threat or use of force”. These forms of action are therefore wrongful in the light of both the principle of non-use of force, and that of non-intervention.7 Even in the case drc v. Uganda the two principles were jointly considered. The Court finding was that Uganda, having occupied a border region of the drc and giving its financial and military support to the irregular forces operating in that State, violated the principle of non-use of force and of non-intervention. It was stated: The Court considers that the obligations arising under the principles of non-use of force and non-intervention were violated by Uganda even if the objectives of Uganda were not to overthrow President Kabila, and were directed to securing towns and airports for reason of its perceived 7 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Judgment of 27 June 1986, i.c.j. Reports 1986, p. 106.

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security needs, and in support of the parallel activity of those engaged in civil war.8 One might conclude that the principle of non-intervention and that on nonuse of force or threat should therefore be kept separated even though sometimes they overlap each other. This means that there are actions which are not a violation of the threat or use of force, but are nevertheless a violation of the non-intervention principle. For instance sometimes some forms of economic coercion are, in today’s integrated world economy, more dangerous than a minor violation of the principle of non-use of force.9 4

Sanctions, Countermeasures and Retorsions

There is no accepted definition of sanctions and this term is controversial and even labelled as ‘imprecise’ by the ilc, which points out that Article 41 of the un Charter refers to ‘measures’ and not to ‘sanctions’. However, sanction is the term currently employed to indicate those measures taken by the sc under Article 41 against a State to remedy a situation falling under Article 39 and implying a threat to peace, a violation of peace or an act of aggression. Sanctions do not necessarily imply that the target State has committed an international wrong, even though this is usually the case. The sc, when determining that a situation amounts to a threat to peace, gives a political judgment and often does not affirm that a State is responsible for having committed a violation of international law. Sanctions are adopted by the United Nations which, according to some authorities, is the only competent organization to act. The measures which can be taken under Article 41 are contained in a list which is not exhaustive and includes: 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 enlargement of the notion of threat to peace has also had as a consequence the widening of subjects to be targeted to include not only States, but also non-State actors and even individuals.10 8 9

10

Case Concerning Armed Activities Case in the Territory of the Congo (Democratic Republic of Congo v. Uganda), Judgment of 19 December 2005, i.c.j. Reports 2005, p. 227, para. 163. Remarks by Marco Roscini at the iai Conference of 13 February 2015 (Report edited by C. Franco, on Coercive Diplomacy, Sanctions and International law, on the website of the Istituto Affari Internazionali). A. Pellet, A. Miron, ‘Sanctions’, Max Planck Encyclopedia of Public International Law (2011). See also R. Wolfrum, ‘Judicial Control of Security Council Decisions (uno)’, Annuaire de l’Institut de droit international, Session de Tokyo, Vol. 75, 2013, pp. 72–75.

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Sanctions may also include the suspension or the expulsion of a member State from the organization to which it belongs and this extreme measure is envisaged not only by the un, but also by other regional organizations and has been concretely implemented by the League of Arab States, African Union and the Organization of American States. Sanctions are therefore politically motivated and are not adopted for commercial reasons. On the contrary, they may imply economic sacrifices by States adopting sanctions. If sanctions are taken through obligatory measures, they share the strength coming from Article 103 of the un Charter and prevail over conflicting obligations of the State implementing a sanction. This is of importance for treaties entered into by the implementing State, for instance a treaty of commerce. Sanctions are subjects to the limits of jus cogens. The practice shows that other limits derive from human rights/humanitarian law and recently the content of sanctions has been adapted in order to take such principles into consideration. The implementation of sanctions may be frustrated by conflicting principles of constitutional law or by fundamental principles contained in the constitutive instrument of an international organization, for instance in the Treaty of the eu.11 These issues will be the object of other Chapters. Since the adoption of sanctions against Southern Rhodesia (1966), the sc has established numerous sanctions regimes: 25 sanctions regimes in total, of which 15 were still in force at the end of 2014. Another feature of modern sanctions is their transformation from comprehensive to targeted sanctions and their application to a wide range of situations. As was pointed out by Australia in its concept paper to introduce the discussion on sanctions at the meeting of sc of 25 November 2014: The Security Council has been able to apply them to a broader range of activity and more diverse kinds of threats to international peace and security. From the original focus on inter-or intra-State conflict, the Council now uses sanctions to counter international terrorism, for the protection of civilians and the prevention of human rights atrocities, to thwart the proliferation of weapons of mass destruction and their

11

Even non-implementation as a kind of countermeasure against the illegality of the sc resolution imposing sanctions has been conceived: see A. Tzanakopoulos, ‘The Countermeasures of Disobedience: Implementing the Responsibility of International Organizations’ in M. Ragazzi (ed.), Responsibility of International Organizations: Essays in Memory of Sir Ian Brownlie (Leiden/Boston: Brill, 2013), pp. 361–372.

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delivery systems and to counter the financing of conflict through the exploitation of natural resources or criminal activities.12 Sanctions may be progressively applied and should be lifted as soon as their political objective is reached. In principle they should be measures of a temporary nature. The eu prefers to employ the term ‘restrictive measures’ leaving sanctions within parenthesis. According to the eu the aim of restrictive measures is “… to bring about a change in policy or activity by the target country, part of country, government entities or individuals”.13 Therefore they do not have a punitive character, but are imposed in order to reach a concrete goal, i.e. a change of policy. Countermeasures differ from sanctions since they are a form of self-help and can be resorted to only if the targeted State has committed an internationally wrongful act. The countermeasure may consist in a violation of the same norm infringed by the targeted State or of another provision of international law. They were in the past labelled as peacetime reprisals to distinguish them from belligerent reprisals. Reprisals have a punitive character and may also include measures of armed force (in peacetime), a feature now prohibited under international law. Punitive economic sanctions not justifiable as countermeasures are an infringement of international law.14 Alland gives the following definition of countermeasures: Countermeasures are pacific unilateral reactions which are intrinsically unlawful, which are adopted by one or more States against another State, 12

Security Council Meeting Records, ‘General issues concerning sanctions’, u.n. Doc. S/PV.7323, 25 November 2014. 13 Europa, eeas, Common and Foreign Security Policy, Sanctions Policy. See also: Council of the European Union, ‘Basic Principles on the Use of Restrictive Measures (Sanctions)’, 10198/1/04, Brussels, 7 June 2004; Council of the European Union, the ‘eu Best Practices for the effective implementation of restrictive measures’, 11679/07, Brussels, 9 July 2007; Council of the European Union, ‘Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy’, 15579/03, Brussels, 3 December 2003. See also the Chapter 4 by Marco Gestri in this volume. 14 This is the opinion by N.D. White and A. Abass, ‘Countermeasures and Sanctions’ in M.D. Evans, International Law (4th ed., Oxford: Oxford University Press, 2014), p. 551. They cite the examples of the Arab oil embargo (1973–1974) and the u.s. embargo against Cuba, respectively motivated by supporting the Palestinians and undermining the Communist regime.

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when the former considers that the latter has committed an internationally wrongful act which could justify such a reaction.15 The ilc Draft Articles on State Responsibility defines the object and limits of countermeasures in the following way (Article 49): 1. 2. 3.

An injured State may only take countermeasures against a State which is responsible for an internationally wrongful act in order to induce that State to comply with its obligations under Part Two. Countermeasures are limited to the non-performance for the time being of international obligations of the State taking the measures towards the responsible State. Countermeasures shall, as far as possible, be taken in such a way as to permit the resumption of performance of the obligations in question.

Even though countermeasures may give rise to opposite countermeasures by the targeted State, they are not inconsistent with Article 2 (3) of the un Charter and the obligation to settle international disputes by peaceful means and cannot be considered as a means of endangering international peace and security.16 There is no doubt of the unilateral nature of countermeasures, which are a typical tool of a decentralized legal order. They are adopted on the assumption that the targeted State has committed an international wrong and it is for the State adopting the countermeasure to judge whether a wrong has been committed, without the need of having recourse to an international tribunal or other third party mechanism competent to ascertain if a wrong has really been committed.17 That said, it should be pointed out that countermeasures are submitted to a number of procedural requirements, namely the call upon the responsible State to comply with its obligation and the notification of the decision to take a countermeasure as well as an offer to negotiate. A State is however entitled, in case of urgency, to adopt countermeasures to preserve its rights. In this case these procedural elements are dispensed with. As has been rightly pointed out, urgent countermeasures may be needed in order to impede the target State from nullifying 15 16

17

D. Alland, ‘The Definition of Countermeasures’ in J. Crawford, A. Pellet, S. Olleson (eds.), The Law of International Responsibility (Oxford: Oxford University Press, 2010), p. 1135. C. Tomuschat, ‘Article 2 (3)’ in B. Simma, D.-E. Khan, G. Nolte, A. Paulus (eds.), The Charter of the United Nations. A Commentary (3rd ed., Oxford: Oxford University Press, 2012), Vol. i, pp. 196–197. D. Alland, op. cit., p. 1129.

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the substance of the countermeasures, for instance by withdrawing its assets from the banks of the injured State.18 As was pointed out by the icj in its judgment on the Gabcikovo-Nagymaros Project (Hungary/Slovakia), the purpose of countermeasures “must be to induce the wrongdoer to comply with its obligations under international law, and that the measure must therefore be reversible”.19 This means that countermeasures should be terminated once that the wrongdoer has stopped its wrongful conduct and has complied with its obligation to repair.20 Countermeasures differ from retorsions. Unlike the former, the latter consist of “acts which are not incompatible with the international obligations of the States taking them towards the target State”. In its Commentary ilc gives the following definition: […] ‘unfriendly’ conduct which is not inconsistent with any international obligation of the State engaging in it even though it may be a response to an internationally wrongful act. Acts of retorsion may include the prohibition of or limitations upon normal diplomatic relations or other contacts, embargoes of various kinds or withdrawal of voluntary aid programmes. The adoption of unilateral measures has been condemned by developing countries. Usually they do not distinguish between lawful countermeasures and other unilateral measures. The rejection of unilateral measures and their qualification as acts contrary to international law has been affirmed by the non-aligned movement, as can be inferred by the Final Document of the Conference of the non-aligned movement held in Algiers in 2014 and also by Resolution 27/21 of the Human Rights Council adopted on 26 September 2014 with the negative vote of the Western countries.21 The Resolution also condemns measures of extraterritorial legislation. ga Resolution 67/170 of 18 19 20

21

Y. Iwasawa and N. Iwatsuki, ‘Procedural Conditions’ in J. Crawford, A. Pellet, S. Olleson (eds.), op. cit., p. 1154. Case concerning the Gabcikovo-Nagymaros Project (Hungary v. Slovakia), Judgment of 25 September 1997, i.c.j. Reports 1997, pp. 56–57. M. Kamto, ‘The Time Factor in the Application of Countermeasures’ in J. Crawford, A. Pellet, S. Olleson (eds.), op. cit., pp. 1174–1176. Countermeasures may also be suspended in order to allow the target State to redress its wrong and comply with international law. They may be resumed if the wrongdoer persists in its unlawful conduct. u.n. Doc. A/HRC/27/L.2, 26 September 2014. The Resolution was introduced by Iran on behalf of the Non-aligned Movement and was adopted with 31 votes for, 14 against and 2 abstaining. The hrc has taken the lead against sanctions and the issue has been the

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20 December 2012 on Human Rights and Unilateral Coercive Measures is also worth recalling. The Resolution calls upon States to cease to adopt or implement any unilateral coercive measure not in accordance with international law, international humanitarian law, the un Charter and other principles of international law. The Resolution also put particular emphasis on unilateral measures with extraterritorial effects and on the legitimacy to counteract with appropriate administrative or legislative measures. As a follow-up to Resolution 170, the Secretary General prepared a Report collecting information from the member States and their views. Until now the information collected has been very poor.22 5

The Legitimization of Coercion

The present paragraph is dedicated to assessing instances of permissible / nonpermissible coercion. 5.1 Self-Defence Economic coercion cannot lawfully give rise to the exercise of (armed) selfdefence for two reasons: firstly, economic coercion is not prohibited under Article 2 (4) of the un Charter and self-defence may be triggered only if a breach of that Article is committed; secondly, self-defence is available if a classical violation of Article 2 (4) is committed, i.e. an armed attack. On this point Article 51 of the un Charter is unequivocal in allowing self-defence only if an armed attack has occurred. During the Arab oil boycott of 1973 an armed intervention against the Arab producers and in particular against Saudi Arabia was considered. The us President Ford and the then Secretary of State H. Kissinger did not rule out an armed response, but this option was not pursued. Julius Stone, for his part, while affirming that economic coercion cannot be considered as armed aggression according to the definition given by ga Resolution 3314 (xxix), said that “self-defence against it may be licit even, in appropriate cases, to the point of use of armed force”.23 This opinion was rejected by other

22 23

object of a preliminary report by a committee devoted to studying the phenomenon. See u.n. Doc. A/HRC/AC/13/CRP2, 30 July 2014. u.n. Doc. A/68/211, 23 July 2013. J. Stone, Conflict through Consensus. United Nations Approaches to Aggression (Baltimore: The Johns Hopkins University Press, 1977), p. 100. See also the discussion within the ilc to the Ago Report on international responsibility in P. Malanczuk, ‘Countermeasures and self-defence as circumstances precluding wrongfulness in the International Law

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scholars, for instance by T. Farer.24 One could assume that Stone’s opinion was linked to the particular fact of history represented by the oil boycott and nowadays opinions on self-defence focus on the time when an armed attack is occurring and on the possibility of preventive self-defence. However, these opinions have in common that the violation triggering an armed response is an armed attack and not an act of economic coercion, however severe it might be. It is thus expedient to conclude that economic coercion, in so far as it is a violation of international law, may trigger only countermeasures and not an armed response. 5.2 un sc Chapter vii Resolutions While the notion of countermeasures is linked to a violation of a norm of international law, the idea of sanction is linked to a situation which might or may not constitute a violation of international law. Sanctions are taken by the unsc not only in case of aggression, but also in case of a threat to peace or a violation thereof. The last two situations do not necessarily presuppose a violation of international law. Sanctions are adopted under Article 41 and have become a common feature since the end of cold war. They are usually included in an obligatory decision, even if the possibility of a recommendation is not ruled out. The competence of the General Assembly – which by definition can pass only hortatory measures – to recommend sanctions is disputed.25 Measures taken by the sc range from the severance or limitation of economic relations to the interruption of diplomatic relations. Possible measures are indicated in Article 41 in a non-exhaustive list. The characteristics and limitations of sanctions are assessed in other Chapters and will not be commented upon here; suffice it to say that sanctions cannot contain military measures such as blockades or other measures envisaged by Article 42. This notwithstanding the sc

24

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Commission’s draft Articles on State responsibility’ in B. Simma, M. Spinedi (eds.), United Nations Codification of State Responsibility (New York: Oceana Publications, 1987), pp. 270–271. Lowe and Tzanakopoulos argue that certain extreme peacetime measures of economic warfare may set in motion the right of self-defence (‘Economic Warfare’, Max Planck Encyclopedia of Public International Law, para. 41). T.J. Farer, ‘Political and Economic Aggression in Contemporary International Law,’ in A. Cassese (ed.) The Current Legal Regulation of the Use of Force (Dordrecht/Boston, MA/Lancaster: Martinus Nijhoff Publishers, 1986), pp. 127–129. For an affirmative stance see A.F. Lowenfeld, International Economic Law (2nd ed., Oxford University Press, 2008), pp. 869–870, who argues, quoting Article 11 of the un Charter, that the ga may adopt sanctions provided that the sc is not acting. For the contrary view, see B. Conforti, Le Nazioni Unite (9th ed., Padova: cedam, 2012), pp. 332–333. As a matter of fact, the ga has enacted several recommendations on sanctions, mainly before the end of the cold war.

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may authorize States to use force for their implementation, for instance visiting and boarding foreign vessels on the high seas in order to check if they transport a prohibit cargo. This has happened in a limited number of cases, the latest is Resolution 1973 (2011) on Libya which authorized member States to inspect foreign vessels on the high seas even without their consent.26 Sanctions are not implemented directly by the sc, but by member States. This is the most delicate problem, as often countries circumvent sanctions and/or do not have appropriate implementing legislation. For this reason it has become a common feature to establish sanction committees to monitor sanctions implementation. 5.3 Regional Organizations Regional organizations are often the protagonists of sanctions, not only for implementing measures decided by the sc, but also for taking sanctions on their own. The practice is very common, for instance the oas has decided sanctions against Cuba and other Latin American States. Other regional organizations which have resorted to sanctions are the League of Arab States, the au and ecowas. As already mentioned the eu prefers to employ the term restrictive measures instead of sanctions. The main question is whether a regional organization under Chapter viii of the un Charter is obliged to seek the authorization of the sc in order to adopt sanctions. The majority of scholars, after a perusal of the Charter drafting history and a systemic interpretation of its relevant provisions, are of the opinion that regional organizations only need sc authorization under Article 53 of the un Charter for those measures that imply the use of force. In other words measures falling under Article 41 of the un Charter do not need to be authorized by the sc, while measures falling under Article 42 do. For instance the Cuban quarantine of the sixties would have needed the authorization by the sc, the oas alone was not entitled to authorize the us to take such forceful measure against Cuba. Sanctions against the Dominican Republic (1960) and Cuba (1962) were correctly taken without sc authorization even though the Soviet Union argued it should have been sought. Sanctions decided by ecowas (1992) in the form of an arms embargo were taken without any sc authorization. These sanctions were thereafter endorsed by the sc and imposed on all ­members of the international community. The examples continue, and the 26

See also paragraph 10 of the sc Res. 917 (1994) on Haiti, calling upon member States “to halt outward as well as inward maritime shipping in order to inspect and verify their cargo and destinations”. The Haiti case is sometimes wrongly qualified as blockade (see for instance A.F. Lowenfeld, op. cit., p. 862) instead of a maritime interdiction.

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conclusion according to which non-military sanctions do not need to be authorized by the sc is thus based on practice.27 The sc may utilize a regional arrangement for implementing non-military action, and even render measures of this kind decided by a regional organization obligatory, through an appropriate resolution.28 The question arises whether a regional organization has the same power conferred to the sc under Article 41 in imposing sanctions or whether its restrictive measures should be based on a different rationale. Much depends on the constitutive instrument. If it provides, for instance, the suspension or the expulsion of a member State for the persistent violation of its provisions, the regional organization is authorized to do so. The same is true if the constitutive instrument gives the organs of the organization the power to impose sanctions on member States for a conduct not in keeping with the regional organization. The rationale in these cases is the consent given a priori by States with the conclusion of the constitutive instrument of the organization. In all other cases, for instance measures to be taken against third States or against member States if they are not contemplated by the constitutive instruments, the organization is only allowed to take restrictive measures if they might qualify as retorsions or countermeasures, since regional organizations do not share a general power of sanctions such as that envisaged by Article 41 of the un Charter.29 They are however entitled to take countermeasures, as proven by Article 21 (1) of the ilc Draft Articles on responsibility of international organizations (2009).30 27

28 29 30

C. Walter, ‘Commentary to Article 53’ in Simma et al., cit. vol. ii, pp. 1482–1487. See also A.F. Lowenfeld, op. cit., p. 883; U. Villani, ‘Les rapports entre l’ONU et les organizations régionales dans le domaine du maintien de la paix’, Recueil des Cours, 290 (2001), pp. 360–364; A. Orakhelashvili, ‘The Impact of Unilateral eu Economic Sanctions on the un Collective Security Framework: The Cases of Iran and Syria’ in Ali Z. Marossi, Marisa R. Bassett (eds.), Economic Sanctions under International Law. Unilateralism, Multi­ lateralism, Legitimacy, and Consequences (The Hague, Dordrecht: Asser Press, Springer, 2015), pp. 18–19. C. Walter, op. cit., p. 1497. Cf. U. Villani, op. cit., pp. 364–366. See F. Dopagne, ‘Sanctions and countermeasures by international organizations. Diverging lessons for the idea of autonomy’ in R. Collins and N.D. White (eds.), International Organizations and the Idea of Autonomy (London: Routledge, 2011), pp. 180–181, who points out that international organizations share a general power to resort to countermeasures against third States. The Chapter does not deal with the problem of countermeasures taken by member States against international organizations. On this point see

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5.4 Coalition of Willing/Individual State The situation of the individual State vis-à-vis sanctions has been already illustrated. The individual State lacks a general power to impose sanctions and its restrictive measures should qualify as retorsions or countermeasures in order to be lawful. The same is true for a Coalition of Willing, since the number of participating States cannot render lawful a measure that is unlawful if it were imposed by an individual State. 6

Autonomous Sanctions Adopted in Addition to Those of the sc

May a State (or a regional organization) adopt sanctions in addition to those decided by the sc? This has happened several times. For instance, in 1990 the sc adopted Resolution 661–1990 against Iraq which was implemented with additional measures taken by Western countries. The same occurred with the sanctions against the former Yugoslavia and the restrictive measures taken by the eu were far more severe than those decided by the sc. Similarly with Iran and Resolutions 1737–2006, 1747–2007, 1803–2008, 1835–2008, 1929–2010, these were supplemented by additional restrictive measures decided by Western countries, mainly when the sc could not agree on specific measures that the eu and us were willing to adopt. The policy of adopting unilateral sanctions outside the framework of the sc was severely criticized by a number of countries during the meeting of the sc devoted to a general discussion on sanctions on 25 November 2014. Argentina, China and the Russian Federation stated that the adoption of unilateral sanctions, including extraterritorial legislation of domestic trade laws, was contrary to the Charter of the United Nations and to international law, since sanctions fall under the exclusive competence of the un sc and such unilateralism was not in keeping with multilateralism that should be followed in taking restrictive measures.31 The Guidelines established by the eu specify that restrictive measures taken the by eu for implementing sc Resolutions may be more severe than those established by the un. In reviewing the legal principles for adopting eu restrictive measures, the Guidelines affirm:

31

S. Vezzani, ‘Countermeasures by Member States Against International Organizations’ in M. Ragazzi (ed.), op. cit., pp. 373–385. u.n. Doc. S/2014/793, 6 November 2014.

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Certain restrictive measures are imposed by the Council in implementation of Resolutions adopted by the un Security Council under Chapter vii of the un Charter. In the case of measures implementing un sc Resolutions, the eu legal instruments will need to adhere to those Resolutions. However, it is understood that the eu may decide to apply measures that are more restrictive.32 The following situations may be envisaged: (a) The un Resolution is a mere recommendation (even though nowadays sanctions usually are a matter of an obligatory decision): in this case States are not obliged but are allowed to implement the conduct which has been recommended and thus they may take the restrictive measures recommended, which may become obligatory for members if a regional organization so decides; (b) The restrictive measures go beyond those measures which have been decided/recommended by the sc. In this case such additional measures may be taken only if they amount to countermeasures, i.e. as a reaction to conduct contrary to international law by the target State, since States are not allowed to take restrictive measures independently from a violation of a norm of international law, unlike the sc that is entitled to decide sanctions if there is a threat to peace even if no norm of international law has been violated. Measures of retorsion are of course always admissible. Another limit comes from the principle of proportionality, as the cumulative effect of sc sanctions and additional restrictive measures may result in a violation of that principle; (c) In between there are situations which are difficult to classify: for instance the restrictive measure taken by States is a form of implementation of the Resolution more severe in respect to the conduct of other member countries; (d) Lifting sanctions by the sc may also come into consideration. If sanctions are terminated, States cannot continue with their implementation. On this point the eu Guidelines specify: It is…important to repeal restrictive measures swiftly in response to un decisions on this point. Where the eu applies restrictive measures in 32

Council of the European Union, ‘Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy’, Brussels, 15 December 2009, pesc 1746.

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implementation of Security Council Resolutions only, it is not proper for the implementing legal instruments to remain in place when the Security Council has decided the measures should be lifted. Where necessary, the legislative instruments can be repealed with retroactive effect; it is desirable that this period is kept as short as possible. It has been argued that States (or regional organizations) cannot maintain any restrictive measures when the sc has terminated sanctions, but they also cannot impose measures more restrictive and severe than those decided by the sc.33 The reason is that such measures could be at variance with Article 24 of the un Charter that entrusts the sc with the principle function of maintaining peace and international security. The author agrees with this view as regards the termination of sanctions, but imposing the duty on States not to adopt sanctions more severe than those decided by the sc will curtail their freedom and the right to take countermeasures if a violation of international law has been committed. Obviously the wording of the sc Resolution is important, since it may leave room for additional measures by member States. This is a question of interpretation. The other situation occurs when the sc cannot take sanctions since the Resolution is vetoed by a permanent member. It is to be conceded that in this case States are allowed to take restrictive measures provided that they qualify as countermeasures. It is obvious that States cannot unilaterally decide to stop sanctions if they are ordered (and not merely recommended) by the Security Council. The conduct of the uk and us in lifting sanctions against Rhodesia attracted the criticism of the General Assembly and a number of countries including the Soviet Union.34 It is open to question whether a State should stop countermeasures if sanctions have been terminated or suspended by the sc. The question should be answered in the negative, since the right to take countermeasures is derived by general international law and it is not made conditional upon a decision of the sc, as it is (in theory) with self-defence which may be exercised until the sc has taken the measures necessary to maintain peace and international security.35 It may also happen that the sc lifts sanctions in relations to a particular conduct of the targeted State, but that States maintain sanctions/countermeasures for a different category of international wrongs imputed to the same country. 33 34 35

U. Villani, op. cit., pp. 167–168. See A.F. Lowenfeld, op. cit., pp. 864–865. Remarks by M. Roscini, op. cit.

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For instance, as affirmed by the us Secretary of State John Kerry in a press conference in Vienna immediately after the conclusion of the agreement with Iran on nuclear assets (14 July 2015), un sanctions will be terminated once Iran has implemented the deal, but the us will not terminate their sanctions related to terrorism, human rights and ballistic missiles. 7

Sanctions and Sovereign Immunity

International law gives sovereign immunity to a number of assets which are State property. Sanctions and countermeasures often freeze this kind of property. The practice of freezing the property of central banks is well known and has been applied both by sc Resolutions and by restrictive measures taken by individual countries (alone or in conjunction with their allies). Are these measures lawful or inconsistent with the principle of sovereign immunity? The answer is simple for sanctions adopted by the sc, even supposing that the freezing of sovereign assets is contrary to international law, because Article 103 of the un Charter dictates that they prevail over any conflicting obligation deriving from conventional law. Can the same be said for restrictive measures adopted without a sc Resolution? International law exempts State activities that are considered acta jure imperii from foreign jurisdiction. It is even more restrictive as far measures of pre-judgment attachment and post-adjustment attachment are concerned. Article 21 of the un Convention on Jurisdictional Immunities of States and Their Property (2004), which is mostly regarded as declaratory of customary international law, does not allow measures of constraints against property, including any bank account, which is used or intended to be used in performance of the function of the diplomatic mission of the foreign State or its consular posts (Article 21, 1 a) and property of the central bank or other monetary authority of the State (Article 21, 1 c), along with other property that is not usually the object of a freezing order (for instance property forming part of the cultural heritage of the State). It has been held that freezing measures related to State property, such as those taken by eu against the assets of the Iranian Central Bank, are illegal in so far as they exceed the sanctions delivered under the sc Resolution. Reference has been made to the 2004 Convention to corroborate that opinion.36 36

P.-E. Dupont, ‘Countermeasures and Collective Security: The case of eu Sanctions Against Iran’, 17 Journal of Conflict and Security Law (2012), p. 314. Cf. also E. Castellarin, ‘Le gel des avoirs d’une banque centrale étrangère comme réaction décentralisée à un fait

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However, the principle of immunity of jurisdiction and freezing of assets are located on different stages. Immunity from jurisdiction is a procedural norm that bars a court from judging a State when sovereign activities or property are concerned, as was stated by the icj in Germany v Italy.37 On the other hand, restrictive measures are the product of State legislation or executive orders that impede the owner from disposing of his property. For that reason they are not commensurable and the principle of sovereign immunity cannot preclude the freedom of State to freeze foreign assets as a countermeasure for violations of international law. However, supposing that the principle of immunity of execution covers not only acts of constraints that are the continuation of a judgment, but also measures autonomously dictated by the legislative or the executive branch, and that the freezing violates the principle of sovereign immunity, one can always assume that the violation is justified as a countermeasure against the wrongdoer.38 In its judgment on the Central Bank of Iran v. Council of the eu, the eu Court annulled the Council Regulation concerning restrictive measures against the Central Bank of Iran because it the Bank’s activities in circumventing sanctions were not proven.39 The Court did not rely on the principle of sovereign immunity. 8

Economic Sanctions and Multilateral Trade Agreements: The Security Exception

It is open to question whether multilateral trade agreements constitute an impediment to the adoption of economic sanctions by member States. Usually this category of agreements contains a clause, called a ‘security exception’, allowing the parties to adopt sanctions for foreign policy reasons, even if they are not specifically authorized by the body administering the agreement. A security exception is contained in the following treaties:

37 38

39

internationalement illicite: rétorsion ou contre-mesure?’, 25 Hague Yearbook of Inter­ national Law (2012), pp. 173–198. Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), Judgment of 3 February 2012, i.c.j. Reports 2012, p. 98. J.-M. Thouvenin, ‘Gel des fonds des banques centrales et immunité d’exécution’ in A. Peters, E. Lagrange, S. Oeter, Ch. Tomuschat (eds.), Immunities in the Age of Global Constitutionalism (Leiden/Boston, 2014), at 213–216. Case T-262/12, Judgment of the General Court, First Chamber, 18 September 2014.

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1) Article xxi gatt, Article xiv-bis gats, Article 73 trips Agreement; 2) nafta, Article 2102 (National Security); 3) Energy Charter Treaty, Article 24 (3). Article xxi of the gatt under the wto system repeats verbatim the same provision contained in the gatt 1947. It allows the adoption of unilateral measures and reads as follows:40 Security Exceptions Nothing in this Agreement shall be construed (a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests (i) relating to fissionable materials or the materials from which they are derived; (ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; (iii) taken in time of war or other emergency in international relations; or (c) to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. The least controversial clause is that of part (c) since it allows the parties to implement measures decided by the sc under Article 41 of the un Charter. The only problem arises if the implementing measures exceed the un Resolution. Because of Article 103 of the un Charter the obligations contained in the Resolution prevail over any other obligation contracted by member States. Resolutions under Article 41 are usually taken in the form of an obligatory act. However, according to the prevailing doctrine, the same conclusion may be reached if sanctions are recommended and not mandated by the sc. This is difficult to understand since Article xxi (c) refers to “obligations” and not to 40

For a detailed comment, see G.-D. Balan, ‘The United States Sanctions Against Iran: What Role to the wto Security Exceptions?’, 18 jcsl (2013), pp. 365–393.

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hortatory measures which may be recommended by the sc and even by the ga. Problems arise for the other category of security exceptions. Article xxi limits the operation of the clause in two ways: the interest invoked should be “essential”, otherwise it would be too easy to claim that the situation involves the security of the State; the measure adopted should be related to the items mentioned by the Article (for instance military items or fissionable material) or taken in a situation therein described. Even in this latter case the margin for interpretation is broad, as it relates not only to “war”, but also to undefined notions such as an “other emergency in international relations”. Practice shows that States invoking a security exception claim that they are taking a political decision not to allow themselves to be subjected to the control of the bodies entitled to assess conformity with the gatt rules. It has been observed that “there is no consensus on whether the validity of invoking national security exceptions for taking trade sanctions may be inquired and ruled on”,41 with the consequence that they seem to fall outside the dsu system and the mechanism of prohibition of countermeasures unless authorized under the wto machinery.42 The security exception embodied in Article xxi is repeated verbatim in Article xiv-bis of gats and Article 73 of trips. According to the Reuter News Agency (24 April 2014), a Russia memo was circulated within the wto affirming the illegality of the eu and us trade restrictions for the annexation of Ukraine, namely gats rules. Russia reserved subsequent action that could be counteracted by recourse to provisions on security exceptions. The validity of the claim of security exception is not made dependent upon the legitimacy of the situation on which the exception is based. For instance a security exception may be invoked even if the claimant State acted unlawfully and thus created a state of war or a situation of emergency. The nafta security exception is also labelled in general terms. Article 2102, entitled National Security, reads:

41

42

R.M. Planck Brumback, ‘Constructing an Effective Dispute Settlement System: Relevant Experiences in the gatt and wto’, Occasional Paper prepared for the Belo Horizonte Meeting, May 1997, p. 21. In 1996 the us adopted unilateral sanctions against Cuba, Iran and Libya with extraterritorial effects hitting European companies. The eu requested the establishment of a Panel according to the wto system. The eu request prompted a bilateral negotiation and a political settlement was reached (Balan, op. cit., pp. 368–369).

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1. Subject to Articles 607 (Energy) and 1018 (Government Procurement), nothing in this Agreement shall be construed: (a) to require any Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests; (b) to prevent any Party from taking any actions that it considers necessary for the protection of its essential security interests (i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment, (ii) taken in time of war or other emergency in international relations, or (iii) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or (c) to prevent any Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. According to Laird, it is for the government invoking the national security exception to decide what constitutes “an essential security interest” and “there is no, in fact, judicial review of the decision”, with the consequence that there is “complete discretion” for the State party.43 Lowenfeld, who goes back to the provision drafting history of the gatt 1947, gives a more balanced view. He recognizes that the clause has never been submitted to international scrutiny. However it has never been invoked to gain commercial advantage and has been used only for adopting measures falling under definition of sanctions, i.e. restrictive measures for pursuing foreign policy objectives.44 The same consideration applies to the Energy Charter Treaty, which in Article 24 (3) sets out its security exception in the following manner: 43

I. Laird, ‘The Emergency Exception and the State of Necessity’ in F. Ortino, L. Liberti, A. Sheppard, H. Warner, Investment Treaty Law, Current Issues (London: British Institute of International and Comparative Law, 2007) p. 247. 44 A.F. Lowenfeld, op. cit., pp. 916–918. Cf. however P. Picone, A. Ligustro, Diritto dell’Organizzazione Mondiale del Commercio (Padova: cedam, 2002), p. 337.

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(3) The provisions of this Treaty other than those referred to in paragraph (1) shall not be construed to prevent any Contracting Party from taking any measure which it considers necessary: (a) for the protection of its essential security interests including those (i) relating to the supply of Energy Materials and Products to a military establishment; or (ii) taken in time of war, armed conflict or other emergency in international relations; (b) relating to the implementation of national policies respecting the nonproliferation of nuclear weapons or other nuclear explosive devices or needed to fulfil its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons, the Nuclear Suppliers Guidelines, and other international nuclear non-proliferation obligations or understandings; or (c) for the maintenance of public order. Such measure shall not constitute a disguised restriction on Transit. 9

The Limits of Countermeasures

There are a number of obligations to be respected by the State resorting to countermeasures. Some of them, for instance proportionality, will be dealt with in other Chapters. Here the focus is on Article 50 on the Draft Articles on State Responsibility which sets out the following conditions. Note that they impose obligations on States and are not in principle applicable to sanctions adopted by the sc. The obligations are worded in the following terms. Countermeasures should not affect: 1. 2. 3. 4. 5.

the prohibition on threat and use of force enshrined in Article 2 (4) of the un Charter: the protection of fundamental human rights; the obligations of a humanitarian character prohibiting reprisals; other obligations of peremptory international law; moreover the provision establishes the enduring obligation related to the settlement of disputes as well those deriving from the law on diplomatic and consular immunities.

For the purpose of this paper the obligation to protect fundamental human rights is of particular relevance since it may set limitations on more extreme

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forms of economic coercion. During the work of the International Law Commi­ssion on State Responsibility an attempt to insert a provision on extreme forms of economic coercion was done by the Special Rapporteur Arangio Ruiz who proposed such an obligation under Article 14 (2) dealing with prohibited countermeasures. Extreme forms of economic coercion against the territorial integrity or political independence of a State stood alone or as a specified type of prohibited countermeasures consisting the threat or use of force. The proposal was not accepted however.45 The example of the total interruption of trade relations and communications, without a decision by the sc, was quoted. In effect such measures fall under the exemplification contained in Article 41 of the un Charter. However, State practice shows that the adoption of measures of this kind has been justified to counteract serious violations of international law committed by the target State. The interruption of trade relations and communications fall under the law of countermeasures in so far as they consist in a violation of treaties linking the State resorting to such measures and the target State. Otherwise they are simple retorsions. The final text of prohibited countermeasures includes actions which are contrary to the protection of fundamental human rights. May extreme forms of economic coercion cause a human rights violation? The ilc Commentary brings elements of clarification, recalling the General Comment No. 8 (1997) of the Committee on economic social and cultural rights. It is stated: It is essential to distinguish between the basic objective of applying political and economic pressure upon the governing elite of a country to persuade them to conform to international law, and the collateral infliction of suffering upon the most vulnerable groups within the targeted country. Moreover the Commentary quotes the last part of Article 1 (2) of the 1966 Covenant on Civil and Political Rights, where it is stated that “in no case 45

See Charles Leben who argues that Arangio Ruiz proposal is not completely dead but “may be more or less reintegrated” if Article 49 (1) is taken into account together with the principle of proportionality (C. Leben, ‘Obligations Relating to the Use of Force and Arising from Peremptory Norms of International Law’ in J. Crawford et al., op. cit., p. 1203). According to another and similar view, “economic and political countermeasures may be illegal if they are aimed at coercing a State to subordinate the exercise of its sovereign rights or its independence” (L. Boisson de Chazournes, ‘Other Non-Derogable Obligations’, ibid., p. 1213).

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may a people be deprived of its own means of subsistence”. One may assume that extreme form of coercion resulting in spreading famine within the civilian population and depriving it of elementary means of subsistence is a kind of collective punishment prohibited under customary international law.46 10

Countermeasures by Third States

Often restrictive measures are adopted by States which are not directly injured by the wrongdoer, for instance in case of serious violations of human rights or a violation of the territorial integrity of a foreign State. No problem arises if such measures are taken by the sc under Article 41 of the un Charter. What if they are taken by States individually or collectively? As we shall see there is no definite answer. The ilc Draft Articles on State Responsibility contains a provision which is an example of constructive ambiguity (Article 54), for it entitles States, which are not directly injured by the wrongdoer, but that nevertheless have a right to invoke the responsibility of another State, to take “lawful measures” (and not countermeasures) against the wrongdoer. This may happen when a norm establishing obligations toward the community of States as whole is violated (for instance the prohibition of genocide) or when a norm setting out a collective interest of a group of States (for instance a violation of the 1966 Covenant on Civil and Political Rights) is infringed. The expression “lawful measures” was employed since there was no agreement in establishing whether States not directly injured were entitled to take countermeasures or, on the contrary, if the sc was the only competent authority in this matter. The state of art is well illustrated by the ilc Commentary. It was held that according to the State practice […] the current state of international law on countermeasures taken in the general or collective interest is uncertain. State practice is sparse and involves a limited number of States. At present, there appears to be no clearly recognized entitlement of States referred to in article 48 to take countermeasures in the collective interest. Consequently, it is not appropriate to include in the present articles a provision concerning the question whether other States, identified in article 48, are permitted to take 46

See Chapter 9 by Daniel H. Joyner in this volume. One of the most popular arguments of Developing Countries is that general sanctions/countermeasures are ‘a collective punishment’ against the population of the targeted country.

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countermeasures in order to induce the responsible State to comply with its obligations. Instead, chapter ii includes a saving clause which reserves the position and leaves the resolution of the matter to the further development of international law. […] Article 54 accordingly provides that the chapter on countermeasures does not prejudice the right of any State, entitled under Article 48, paragraph 1, to invoke the responsibility of another State, to take lawful measures against the responsible State to ensure cessation of the breach and reparation in the interest of the injured State or the beneficiaries of the obligation breached. The article speaks of “lawful measures” rather than “countermeasures” so as not to prejudice any position concerning measures taken by States other than the injured State in response to breaches of obligations for the protection of the collective interest or those owed to the international community as a whole. However this finding has been assessed as not in keeping with reality for, as may be drawn from the examples quoted by ilc itself, the instances of measures taken by States not directly affected are numerous and have become more frequent according to recent State practice.47 The Institut de droit international has taken a clear stance in its Krakow Resolution on Obligations Erga Omnes in International Law. Article 5 affirms the right of States not specifically affected “[…] to take non-forcible countermeasures under conditions analogous to those applying to a State specifically affected by the breach”. Supposing that a State not directly injured may take a countermeasure, the other point is whether such a State may take a countermeasure in case of any violation of an obligation establishing a collective interest or owed toward the international community as a whole or only if the breach consists of a serious violation. It has been held that while the State directly injured may take a countermeasure in case of any violation whatsoever, a State not directly injured may resort to countermeasures only if there is a serious violation of such category of obligations (i.e. obligations owed toward the international community).48

47

48

A. Pellet and A. Miron, op. cit. See also L.-A. Sicilianos ‘Countermeasures in Response to the International Community Owed to the International Community’ in J. Crawford et al., op. cit., pp. 1147–1148. Contra Thouvenin, op. cit., at 218–219. G. Gaja, ‘The Protection of General Interests in the International Community’, 364 Recueil des Cours (2014), p. 131.

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Countersanctions by the Target State

Is a State entitled to react to restrictive measures imposed against it? The phenomenon of reacting against sanctions (restrictive measures) with countersanctions is practiced by the target States and has become particularly relevant with the Russian Federation and the restrictive measures imposed by Western countries. Russia reacted with restrictive measures against Western countries affirming that their policy was contrary to international law and thus their conduct was unlawful.49 The practice of reactions and counter-reactions is not new. For instance if a State is reacting in self-defence the target State does not stay inert and responds with forceful measures. The same happens with reprisals in wartime. The target State resorts to counter-reprisals on the assumption that reprisals launched against it are unlawful. As to the admissibility of countersanctions one has to distinguish between sanctions imposed by the sc and countermeasures taken by States individually or collectively. As to sanctions imposed by the sc, the starting point is that they are obligatory for all un members. Article 48 of the un Charter says that decisions by the sc should be implemented by all un members (or some of them as decided by the sc). Reacting with countersanctions to sanctions imposed by the sc is a kind of non-compliance with the sc obligatory resolutions. Therefore countersanctions should be regarded as unlawful. The situation is different for countermeasures taken by States individually or collectively. The question here is whether a countermeasure is lawfully taken if the target State is not abiding by international law. If yes, the target State resorting to countersanctions commits an international wrong. If not, the target State may resort to countersanctions that in this case would amount to countermeasures since they are taken in reaction to an international wrong. To avoid such a consequence the only possibility is to have recourse to a mechanism entitled to verify whether a violation of international law has been committed and decide the content of countermeasure to be taken. The wto system is endowed with such a mechanism. However it seems that the wto is the exception and not the rule. Because of the decentralized nature of the international community it is improbable that States would accept a 49

See, for instance, the Executive Order 560 of 6 August 2014, by President Putin, On Applying Certain Special Economic Measures to Ensure the Security of the Russian Federation, available at government.ru/en/docs/14392.

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compulsory mechanism to check the evidentiary standard. This is possible in the framework of a self-contained regime or in the context of a bit, containing an arbitration clause on dispute-settlement. A party might claim that the countermeasure was unlawful since no wrongful act has been committed. Counter-reactions in the form of retorsions are legitimate since they do not constitute a violation of norms of international law. 12 Conclusion The aim of this Chapter was to assess the legal standing of the different forms of coercion and to rationalize in legal terms the nature and limits of restrictive measures adopted by States and international organizations, which are erroneously assembled under the same category and labelled as sanctions. The findings are the following: – While military coercion offers several examples of its illegality stretching from the threat to the use of armed force, illegality of economic coercion is more difficult to define and should encompass a violation of international treaties. Instances of economic coercion integrating a violation of a norm of customary international law are harder to discern, even more so for political coercion, unless it substantiates a form of threat to armed force. – Economic pressures that are mere retorsions (unfriendly acts) and do not violate any provisions of international law cannot trigger any international responsibility and do not entitle the target State to react with countermeasures. – Sanctions are a kind of economic coercion that are within the competence of the un sc and may be adopted independently from the commission of an internationally wrongful act. As a rule, they are embodied in an obligatory decision taken under Article 41 of the un Charter, which member States are bound to implement. Sanctions may also be recommended by the sc. Sanctions are typical of a centralized system such as the one envisaged by the un. – States, individually or in coalition among themselves, are not entitled to adopt sanctions independently from a Resolution of the sc. They may only adopt restrictive measures in the form of countermeasures to react against an international wrong committed by the target State. Additional measures supplementing those decided by the sc may be taken only if they qualify as countermeasures.

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– Countermeasures have limits established by customary international law. They may be adopted by the State victim of an international wrong and are typical of a system not institutionalized and where the State to State relations are still the paradigm of the international community. It is controversial whether States not directly affected may resort to countermeasures in case of a violation of erga omnes obligations. However there is an overwhelming body of practice substantiating the view that even States not directly affected may resort to countermeasures, independently of a sc Resolution, if the violation of an erga omnes obligation is of particular gravity. This is a step toward getting over of the current legal order which is essentially based on bilateral relations. – The target State is lawfully entitled to counteract with restrictive measures if the countermeasures are illegitimate, for instance if it has not committed any wrongful act. Retorsions are always permissible. – Unlike the un, regional organizations are not endowed with a general power to adopt sanctions. Therefore either they implement sanctions decided by the sc or adopt restrictive measures in the form of countermeasures. – Usually there is no judicial review scrutinizing the lawfulness of sanctions. For the security exception under trade agreements this is in principle possible, but in practice does not happen. Judicial review is confined to sanctions and countermeasures against individuals and entities. bits may provide arbitration clauses and in this case a judicial review is not excluded. Instances of judicial review may happen if a case is brought before the icj, as happened with Nicaragua and its claim that the us violated the fnc treaty between the two States.50 – Unlike countermeasures that are subject to limits of human rights and humanitarian law according Article 50 of the ilc, there is no express provision of this kind for sanctions. Their human rights/humanitarian law limits are a matter of interpretation.

50

Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Judgment of 27 June 1986, i.c.j. Reports 1986, at 125–142.

chapter 2

Compatibility and Legitimacy of Sanctions Regimes Michael Bothe Abstract For the purpose of this paper, ‘sanction’ is defined as a measure taken by one international actor (the sanctioner) against another subject of international law (the sanctionee) in order to make the sanctionee desist from a behaviour considered by the sanctioner to be politically unacceptable or illegal. These measures usually consist of withholding or withdrawing certain advantages the sanctionee would otherwise enjoy. Sanctions in this sense are legally unproblematic where the sanctionee is not legally entitled to the advantage in question (retorsion). Examples are the severance of diplomatic relations, the interruption of transport (air and sea) communications or travel restrictions for individuals unless there is a treaty right covering these communications. Among members of the wto, restrictions in trade of commodities or services may only be imposed to the extent permitted by the exception clauses of Art. xxi gatt or Art. xiv-bis gats. Advantages covered by treaties may, as a matter of principle, only be withheld or withdrawn by relying on treaty exception clauses or on countermeasures. If private persons are affected by sanctions, their fundamental rights must be respected.

Keywords sanction – countermeasure – retorsion – gatt/gats – freedom of commerce and navigation – property rights

1 Introduction Sanctions are measures taken by an international actor (the sanctioner, a State or an international organization) in reaction to an undesirable, most often allegedly illegal behaviour of another actor (the sanctionee) for the purpose of making the sanctionee desist from that behaviour. Usually, such measures consist of a value deprivation, i.e. the denial or withdrawal of certain advantages which the sanctionee would otherwise expect or claims to be entitled to.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_003

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There are two types of ‘sanctions’ which follow completely different rules: enforcement measures imposed by the Security Council and so-called autonomous sanctions, i.e. measures unilaterally decided by individual States, groups of States or regional organizations.1 The former category is based on Articles 39, 41, 25 un Charter. It raises questions of the interpretation of these provisions, of the scope of discretion which the Security Council possesses, and of the limitation of its powers, in particular those based on human rights law. The Security Council may use these powers by authorizing States, groups of States or regional organizations to adopt certain sanctions.2 As the case of Iran shows, both types of sanctions may exist side by side.3 2

Specific Legal Yardsticks

This paper concentrates on the latter category, autonomous sanctions. The first question concerning the compatibility or legitimacy of autonomous sanctions is whether the sanctionee has political or similar reasons to expect such advantages or is legally entitled to receive them. The rules concerning legitimacy of sanctions differ in these two cases. If the sanctionee is legally entitled to the advantage withdrawn or withheld, the ensuing question is whether there is any rule allowing for exceptions to such entitlement. The rules on state responsibility4 concerning reprisals (in traditional terminology) or countermeasures (modern terminology) are only one possibility among others for such exception. If advantages to which the sanctionee has no legal right are withdrawn or withheld, the sanction might constitute an unfriendly act, but it is not unlawful (retorsion).5

1 For the historic development, see B.E. Carter, ‘Economic Sanctions’, Max Planck Encyclopedia of Public International Law (2012), para. 8 et seq. 2 A. Pellet and A. Miron, ‘Sanctions’, Max Planck Encyclopedia of Public International Law (2013), para. 10 et seq.; on “autonomous sanctions”, ibid., para. 62 et seq. 3 The Security Council decided on sanctions against Iran in Resolutions 1737 (2006), 1747 (2007), 1803 (2008), 1929 (2010), 2049 (2012). For u.s. sanctions see the Iran Sanctions Act 1996, as amended, 50 u.s.c., para. 1701; for eu sanctions see Council decision 2010/413/CFSP, 26 July 2010. The eu Council decision clearly distinguishes between measures which implement the sanctions decided by the Security Council and those which go beyond them. 4 Formulated by the International Law Commission in the Articles on the Responsibility of States for internationally wrongful acts (ars), Annex to General Assembly Resolution 56/83 of 12 December 2001. 5 T. Giegerich, ‘Retorsion’, Max Planck Encyclopedia of Public International Law (2011).

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The question of the lawfulness of sanctions can thus only be answered by looking at legal norms, or as the case may be, particular legal regimes regarding the expected advantages which are denied or withdrawn by the sanctioner. In this respect, it is necessary to address specific types of sanctions separately. Whether the general rules on countermeasures apply is also a question of the regime applicable to each type of measure. A non-exhaustive list of typical measures employed as sanctions is the following: 2.1 Ban or Restrictions on Trade in Commodities A typical sanction is a ban or restriction on imports or exports,6 depending on what hurts the sanctionee and is therefore able to induce it to cease the undesirable behaviour. It is often limited to certain commodities, e.g. a ban on oil imports from a certain oil exporting country or a ban on the export of weapons or of luxury goods to the sanctionee country. There is no rule of general (customary) international law forbidding such restrictions. There is no general right of commercial intercourse. Sanctions of this type present legal problems only if they fall under a relevant treaty. Yet more than 90% of international merchandise trade is covered by the regulatory regime of the gatt. Such restrictions violate, first, the most favoured nation rule (mfn, Article i gatt) as the restrictions do not apply to other States and the sanctionee is thus treated less favorably than others. Such restrictions also violate the prohibition of quantitative restrictions (Art. xi gatt). A total ban is the most rigorous form of quantitative restrictions.7 Such deviations from the prohibitions of the gatt are allowed if they fall under the exceptions provided for in Arts. xx or xxi. Art. xx is not relevant in the present context. The said restrictions may, however, constitute action which a Contracting Party “considers necessary” for the protection of its essential security interests (Art. xxi (b) gatt).8 The provision has been quite often invoked.9 Its interpretation presents a number of problems, in particular whether the State invoking the exception possesses a margin of discretion or appreciation as to what is necessary for the protection of essential security interests.10 6 7 8 9 10

B.E. Carter, op.cit., supra note 1. B.E. Carter, op. cit., supra note 1, para. 25, H.-K. Ress, Das Handelsembargo (Berlin: Springer, 2000), p. 26. For details see Chapter 1 in this volume, by Natalino Ronzitti. For a review of the practice see M.J. Hahn, Die einseitige Aussetzung von gatt-Verpflichtungen als Repressalie (Berlin: Springer, 1996), p. 319 et seq. M.J. Hahn, op. cit., supra note 9, at 302 et seq.; H.-K. Ress, op. cit., supra note 7, p. 26 et seq.

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Whether restrictive measures not covered by this exception can never­ theless be lawful ‘countermeasures’ or ‘reprisals’ is doubtful. If the gatt is ­considered to be a “self-contained regime”,11 reliance on the general rules on countermeasures to justify any exception to the rules on freedom of commerce would not be possible. The fact that the gatt possesses its own highly developed dispute settlement system constitutes a decisive argument for its exclusive character.12 This is at least in part confirmed by Article 23 wto Dispute Settlement Understanding. As already indicated, prohibition of arms trade (arms embargoes) is an important practice, used both by the Security Council and by States employing autonomous sanctions. Arms trade also falls under the gatt regime,13 where the exception clause of Art. xxi is relevant. Certain important sanctionees are not (or have not been at relevant times) Contracting Parties to the gatt, e.g. Libya, Sudan, Somalia, Syria, Iraq, Iran, Belarus.14 Sanctions against these States are not subject to gatt restraints. Except in the case of particular treaty rights, they are thus not unlawful. The said restrictions may also violate bilateral treaties. The typical treaty on friendship, commerce and navigation (fcn treaty)15 of the United States contains a clause prescribing that there will be freedom of commerce between the parties. Trade restrictions of course violate such a clause. The treaties, however, usually contain a clause allowing a party to take measures “necessary” to protect its essential security interests. The International Court of Justice has insisted on an objective interpretation of the clause, leaving no discretion to the State as to what is necessary.16 According to the Court, the clause could not be invoked to cover a use of force which did not fulfil the requirements of necessary and proportionate self-defence. Whether other forms of restraining trade for the sake of sanctioning behaviour considered as security risk would be covered by this exception clause is doubtful. In the Nicaragua case, the

11 12 13 14 15 16

See Hahn, op. cit., supra note 9, at 158 et seq. M.J. Hahn, op. cit., supra note 9, at 172 et seq. M. Bothe, ‘Weapons of Mass Destruction, Counter-Proliferation’, Max Planck Encyclopedia of Public International Law (2011), para. 48. Most of these countries are observers, but in that capacity, they are not bound by the treaty. See Chapter 10 by Andrea Atteritano and Maria Beatrice Deli in this volume. Military and paramilitary activities in and around Nicaragua (Nicaragua v. United States of America), Judgment of 27 June 1986, i.c.j. Reports 1986, para. 282; Case concerning oil platforms (Islamic Republic of Iran v. United States of America), Judgment of 6 November 2003, i.c.j. Reports 2003, para. 43 et seq., 73, 78.

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Court held that a trade embargo was not covered as the facts before the Court did not suffice to show that it was “necessary”. The examples show that the rules concerning countermeasures play a limited role in justifying restrictions on the import or export of goods. The essential point is whether such restriction is subject to treaty prohibition or, where this is the case, is covered by a corresponding exception clause. 2.2 Financial Transactions, Access to the Financial Market Another typical kind of sanctions relates to financial transactions. They take different forms. A very simple, but not very effective one is the simple prohibition of transborder financial transfers. Another and very common one is the prohibition of access by persons or enterprises belonging to the sanctionee to assets situated on the territory of the sanctioner. A typical example is the freezing of assets. Yet another possibility is barring enterprises of the sanctionee from access to the capital market. This can be done by preventing persons or enterprises of the sanctioner from buying or selling bonds or equity of enterprises belonging to the sanctionee. Finally, financial business operations by enterprises belonging to the sanctionee may be restricted on the territory of the sanctioner. The legal questions triggered by each of these measures vary. Restrictions on money transfers fall under the regulatory regime of the imf. According to Art. viii (2)(a) of the Articles of Agreement of the imf, members shall avoid restrictions on current payments. Such restrictions may at least not be discriminatory (Art. viii (3)) unless approved by the Fund. As the restrictions imposed as sanctions distinguish between the sanctionee and other countries, they are discriminatory and thus, subject to the imf approval, unlawful. There does not seem to be any practice to that effect. The imf is always involved in discussion about sanctions and their economic effects. Yet it appears that the imf tries to address negative economic effects of sanctions through consultations. The imf has special procedures for exchange control measures imposed for reasons of national security.17 Activities restrained by a sanctions regime of the kind described constitute as a rule financial services which fall under the gats as defined by Art. i gats and Sec. 5 of the Annex on Financial Services. For the reasons already indicated concerning trade in commodities, they violate the most favoured nation rule enshrined in Art. ii gats. The exceptions for security reasons allowed by Art. xiv-bis gats correspond grosso modo to those envisaged by Art. xxi gatt. 17

R. Leckow, N. Rendak and M. Strauss, ‘Currency Controls’, Max Planck Encyclopedia of Public International Law (2014), para. 14.

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Some of the financial sanctions mentioned above, in particular the freezing of assets, raise for two reasons problems concerning protection of private property. There is, on the one hand, the law relating to the treatment of aliens which comprises the protection of foreign property, on the other the protection of property as a human rights issue. As to the first aspect, the protection of foreign property is a rule of customary law, and financial claims like bank accounts are covered.18 As to the human rights problem, the universal human rights covenants do not contain a provision on the protection of private property, but the European Convention on Human Rights (Additional Protocol)19 and the American Convention on Human Rights20 do. The question then arises whether sanctions may constitute a valid limitation of the right guaranteed under the Protocol additional to the echr or under the acHr.21 These questions of the protection of property may also arise under bilateral investment treaties or treaties of friendship, commerce and navigation. What has been said concerning trade in commodities applies mutatis mutandis to trade in financial services. 2.3 Interruption of Communication Another typical sanction is the interruption of air and sea traffic. There is no general customary right of access to another State’s ports or airports. As to sea traffic, the right of innocent passage for ships through territorial waters (Article 17 unclos) does not cover a right to call on a port of the coastal State.22 Thus, closing a State’s ports to ships flying the flag of a sanctionee is not unlawful. It is a case of retorsion.23 As to air traffic, the situation of treaty law is complex,24 and not all States are parties to all relevant treaties. The basic rule remains that the right of overflight for a plane registered in another country depends on prior agreement

18

U. Kriebaum and A. Reinisch, ‘Property, Right to, International Protection’, Max Planck Encyclopedia of Public International Law, para. 17; H.-K. Ress, op. cit., supra note 7, 22 et seq. 19 First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms, 20 March 1952, Article 1. 20 American Convention on Human Rights, 29 November 1969, Article 21. 21 See infra Section 2.7. 22 A.J. Hoffmann, ‘Navigation, Freedom of’, Max Planck Encyclopedia of Public International Law, para. 7. 23 Giegerich, op. cit., supra note 5, para. 10. 24 L. Thomas, ‘Chicago Convention’, Max Planck Encyclopedia of Public International Law, para. 6.

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which is subject to the discretion of the State in question.25 The Chicago Convention26 and additional agreements27 establish a differentiated regu­ lation for overflight and flight into the territory of a State party for scheduled or non-scheduled commercial air services,28 which may be supplemented by bilateral or regional agreements (for instance so-called open skies agree­ ments).29 Restrictions not in conformity with these agreements may be justified as countermeasures. Where there is no right of overflight or flight into a territory, restrictions are simply retorsions.30 2.4 Freedom of Movement of Persons Measures affecting the movement of persons usually relate to the entry of targeted persons, mainly persons belonging to the sanctionee, into the territory of the sanctioner. They include the prohibition of entry, the introduction of visa requirements and visa denial. There is a human right to leave a country (Article 12 (2) iccpr), but there is no corresponding right to enter a country, except for the case of non-refoulement of refugees which is not relevant in the present context. There is no multilateral regime providing for a right of entry. Denial of entry of certain persons may be an unfriendly act towards their country of origin, but is not unlawful under general international law. Reliance on countermeasures is thus not necessary in order to justify a prohibition of entry. The situation will be different where a bilateral investment or commercial treaty provides for a right of entry under certain conditions. In this case, provisions on safeguarding security interests will become relevant. 2.5 Severing or Restricting Diplomatic or Consular Relations Severing diplomatic or consular relations or reducing the size of embassies is an often used form of sanction. As there is no right to diplomatic or consular intercourse, such a measure is not unlawful, it is a typical case of retorsion.31 25 26 27 28 29

30 31

J. Wouters and B. Demeyere, ‘Overflight’, Max Planck Encyclopedia of Public International Law, para. 1. Convention on International Civil Aviation, 7 December 1944. International Air Services Agreement, 7 December 1944, 84 unts 389; International Air Transport Agreement, 7 December 1944, 171 unts 387. A right of overflight for non-scheduled services is granted by Article 5 of the Chicago Convention. L. Thomas, ‘Air Law’, Max Planck Encyclopedia of Public International Law, para. 23. For the right of overflight as a confidence building measure J. Wouters and B. Demeyere, op. cit., supra note 25, para. 18. T. Giegerich, op. cit., supra note 5, para. 10. T. Giegerich op. cit., supra note 5, para. 10.

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2.6 Interstate Contracts As an exceptional measure, the implementation of interstate contracts, e.g. contracts between governments for the delivery of military material (up to entire weapons systems and battleships), may be suspended or otherwise discontinued. This will as a rule be a violation of the contract, a disregard for the rule ‘pacta sunt servanda’. It is in this respect that the rules of international law on State responsibility and countermeasures32 really become relevant. If the sanctioner is injured by an unlawful act of the sanctionee, the sanctioner may lawfully refrain from performing an international legal obligation, subject to the principle of proportionality (Article 49, 51 darsiwa). Where the act or activity triggering the sanctions constitutes the violation of an obligation erga omnes, the responsibility of the State in question, i.e. the sanctionee, may be invoked by any other State, but the reaction of the noninjured State is limited to requesting assurances of non-repetition and compensation of damages for the benefit of the injured State (Article 48(2) darsiwa). Reactions by a State which is not injured going beyond these limitations are not lawful. In particular, they may not include the non-performance of an international obligation. 2.7 Private Transborder Contracts Many sanctions regimes affect contracts concluded or to be concluded between private persons or enterprises situated in the sanctioner and in the sanctionee country.33 The conclusion of new contracts or the implementation of existing contracts may be prohibited or otherwise restrained. As to legal norms restraining the imposition of sanctions of this kind, two distinctions must be made: First, the relationship between the two States, a matter of international law, must be distinguished from the relationship between the State and the private individual or enterprise concerned, a question of national law subject to inter­ national guarantees. Secondly, the distinction between contracts already concluded and contracts to be concluded is essential. In the relationship between the States in question, such prohibition may amount to a restraint on trade in commodities or in services, already discussed. In relation to the affected individuals or enterprises, this is primarily a question of property rights which may be protected by national constitutional law or international human rights law, in some cases also by bilateral investment guarantee treaties. 32 See supra note 4. 33 For details see Chapter 10 by Andrea Atteritano and Maria Beatrice Deli in this volume.

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The guarantee of property rights is enshrined in Article 1 of the Protocol Additional to the echr. States may not deprive any natural or legal person “of his possessions”. Such “possessions” may include contractual rights having a pecuniary value. The European Court of Human rights has consistently held bank deposits to constitute “property” in this sense.34 On the other hand, expectations of future benefits only amount to “possession” if they have a firm basis in law, i.e. ­constitute legitimate expectations.35 Thus, a prohibition of implementing a valid contract would violate the guarantee, but the prohibition of concluding contracts in the future only in exceptional circumstances. To the extent that a prohibition constitutes a deprivation of possessions in the sense of Article 1, it must be asked whether the measure falls under the exception clauses of that provision, namely a measure taken in the public interest in conformity with national and international law (Article 1 (1)) or a control of the use of property (Article 1 (2). Under certain circumstances, the Court holds, the freezing of a bank account can be a lawful limitation of a property right according to Article 1 (1) 2nd sentence.36 A similar question arises under Article 21 achr, namely whether this a limitation of use imposed for reasons of “the interest of society”. 2.8 Conclusion It has been shown that legal restraints on sanctions as a means of coercive diplomacy depend on the type of measure taken in a particular case. Each sanctions regime must be analyzed with great caution. But it has also been shown that a wide variety of sanctions is lawful under various relevant legal regimes, even without relying on the general rules regarding countermeasures. 3

Intervention and the Limits of National Jurisdiction

Whether the principle of non-intervention imposes an additional general restraint on the freedom to adopt sanctions is debatable. In its Nicaragua 34

ECtHR (Grand Chamber), Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the Former Yugoslav Republic of Macedonia, Application No. 60642/08, Judgment of 16 July 2014, para. 80; ECtHR, Trajkovski v. The Former Yugoslav Republic of Macedonia, Application No. 53320/99, Decision of 7 March 2002; Appolonov v. Russia, Application 67578/01, Decision of 29 August 2002; ECtHR, Zolotas v. Greece, Application No. 66610/09, Judgment of 29 January 2013, para. 47. 35 ECtHR, Kopecky v. Slovakia, Application No. 44912/98, Judgment of 28 September 2004, para. 35, 45 et seq. 36 ECtHR, Trajovski v. The Former Yugoslav Republic of Macedonia, supra note 34.

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judgment, the icj has been somewhat reluctant to derive from that principle a prohibition of certain means of economic pressure.37 There is an additional problem raised in particular by u.s. sanctions legislation triggered by the fact that this legislation often covers transactions between third States and their nationals. It must then be asked whether the limits which international law imposes on the territorial scope of national jurisdiction are overstepped.38 As a matter of principle, the jurisdiction of States is limited to their territory. Outside the State’s territory, jurisdiction may only be exercised if there are particular circumstances constituting a link with the State, e.g. the nationality of the addressee of a regulation or the protection principle. The u.s. practice, in particular the law called Helms-Burton Act concerning sanctions against Cuba,39 is often criticized for overstepping that limitation. The legal assessment depends of course on the details of such legislation. 37 38 39

For details, see Chapter 1 by Natalino Ronzitti in this volume. See H.-K. Ress, op. cit., supra note 7, p. 29 et seq. H.-K. Ress, op. cit., supra note 7, p. 34 et seq.

chapter 3

Confronting the Implementation and Enforcement Challenges Involved in Imposing Economic Sanctions Bryan R. Early Abstract This chapter examines the practical challenges associated with the implementation and enforcement of economic sanctions. It develops a conceptual framework that distinguishes between sanctions violations on the basis of whether they were unintentional or deliberate and whether they occurred within the jurisdiction of the sanctions or outside of it. After discussing the specific characteristics of each category of violation, the chapter presents implementation and enforcement strategies that governments can employ to make their sanctioning efforts more effective. These strategies focus on improving the implementation of sanctions to minimize unintentional sanctions violations, closing sanctions loopholes and maximizing the scope of their jurisdiction, and investing in the detection and punishment of deliberate, illegal sanctions violations. The chapter also discusses the challenges posed by third-party sanctionsbusting and how governments can try to mitigate the often intractable problems it poses to sanctioning efforts. The chapter draws on insights from sanctioning efforts undertaken by the United States and European Union to provide numerous policyrelevant insights that can aid governments in adopting more effective economic sanctions.

Keywords economic sanctions – policy implementation – sanctions busting – sanctions busters – United States – European Union

1 Introduction Economic sanctions are easy to adopt, but difficult to implement policies. Imposing effective sanctions requires drafting well-crafted sanctions policies that are capable of imposing sufficient costs upon a target actor to force

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_004

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concessions. Policymakers often try to strike a careful balance in imposing sanctions costly enough to affect the target’s behavior but that do not also significantly harm their own countries’ economic interests. They frequently err, though, by expecting that their sanctions will be more effective than they actually are. Implementation and enforcement challenges are a major reason for this. Imposing sanctions requires governments to find effective ways of informing the parties subject to sanctions of what commercial transactions are no longer allowed, convince those parties to stop engaging in them, and then prevent third-party actors from undercutting whatever sanctions they have imposed. Governments thus face a number of domestic and international obstacles to employing effective sanctions policies. As such, economic sanctions that appear strong on paper often end up being far weaker in practice due to implementation and enforcement problems. This study offers a conceptual explanation of the implementation and enforcement challenges that governments face in imposing sanctions and presents a number of strategies for overcoming them. Addressing the problems associated with the implementation and enforcement of sanctions is of crucial importance given the widespread usage of these policies by the United States, European Union (eu), and United Nations (un). The United States and eu have emerged as the two leading international actors that rely on economic sanctions the most. Problematically, though, scholarly analyses have repeatedly shown that economic sanctions have a poor track record of success.1 Despite this knowledge, policymakers keep using sanctions anyway. Since policymakers remain committed to using sanctions, it is imperative to understand how sanctioning efforts can be made more effective. While a large body of scholarship has sought uncover the key factors correlated with the success of sanctioning efforts, a much smaller number of works have explored the practical impediments to enforcing them and fewer still have examined the challenges involved in implementing them.2 Adopting 1 G.C. Hufbauer, J.J. Schott, K.A. Elliott and B. Oegg, ‘Economic sanctions Reconsidered’, 3nd ed., Washington D.C.: Peterson Institute for International Economics, 2007; N. Bapat and T. Clifton Morgan, ‘Multilateral versus Unilateral Sanctions Reconsidered: A Test Using New Data’, 53:4 International Studies Quarterly (2009), pp. 1468–2478. 2 See, for example: J. Dashti-Gibson, P. Davis and B. Radcliff, ‘On the Determinants of the Success of Economic Sanctions: An Empirical Analysis’, 41:2 American Journal of Political Science (1997), pp. 608–618; A.C. Drury, ‘Revisiting economic sanctions reconsidered’, 35:4 Journal of Peace Researc (1998), pp. 497–509; D.W. Drezner, The sanctions paradox: Economic Statecraft and International Relations (Cambridge: Cambridge University Press, 1999); D.W. Drezner, ‘Bargaining, Enforcement and Multilateral Sanctions: When Is Cooperation Counter­productive?’, 54:1 International Organization (2000), pp. 73–102; W.H. Kaempfer and

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effective sanctions requires governments to make significant investments in the implementation of their sanctions, in detecting, investigating, and punishing violations, and in seeking to prevent third-parties from actively undercutting their sanctions. If a government fails to even convince its own constituents to abide by sanctions policies, it may not even matter if there are third parties willing to actively sanctions-bust on a target State’s behalf. Yet even when sanctions are effectively implemented, target States can still often find third parties willing to help them circumvent sanctions. Sanctions policies can thus fail as a result of problems with either their implementation or enforcement. This chapter offers a framework for understanding the implementation and enforcement challenges associated with imposing sanctions and offers a number of strategies for overcoming them. It begins by explaining the challenges that governments face in convincing businesses to comply with their sanctions policies and also in preventing third-party actors from undercutting them. A conceptual framework is presented for distinguishing between unintentional versus deliberate sanctions violations and those actors that undercut sanctioning efforts from within the sanctions’ jurisdiction versus outside of it. It is argued that governments can reduce the amount of unintentional violations that occur by improving their sanctions implementation strategies. It is also argued that policymakers should seek to maximize the scope of their sanctions’ jurisdiction in order to limit the ways parties can legally undercut sanctioning efforts. This allows enforcement efforts to focus on the prevention of deliberate, illegal violations, which governments are much better equipped to address, than sanctions-busting conducted by third-party actors outside the scope of their sanctions’ jurisdiction. While the strategies discussed in this chapter can help make it harder and costlier for target States to circumvent sanctions, there are few good options for preventing third-party sanctionsbusting altogether. For many States, though, adopting more effective implementation and enforcement practices could significantly increase the chances of their sanctions being effective. A.D. Lowenberg, ‘Unilateral Vs. Multilateral Sanctions: A Public Choice Perspective’, 43 International Studies Quarterly (1999), pp. 37–58; T.C. Morgan and N. Bapat, ‘Imposing Sanctions: States, Firms, and Economic Coercion’, 5:4 International Studies Review (2003), pp.  65–79; S.H. Allen, ‘The Determinants of Economic Sanctions Success and Failure’, 31:2 International Interactions (2005), pp. 117–138; G.C. Hufbauer, J.J. Schott, K.A. Elliott and B.  Oegg (eds.), Economic Sanctions Reconsidered, cit.; B.R. Early, ‘Unmasking the Black Knights: Sanctions Busters and Their Effects on Sanctions Success’, 7:4 Foreign Policy Analysis (2011), pp. 381–402.

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Implementation and Enforcement Challenges to the Effectiveness of Economic Sanctions

By some estimates, economic sanctions only succeed approximately a quarter to a third of the time they are imposed.3 Economic sanctions can be undermined both internally and externally. Internal challenges to the effectiveness of sanctions policies come from citizens of the States imposing sanctions. In such cases, citizens continue to engage in commercial relationships with sanctioned parties in violation of the sanctions policies that their governments adopted. External violations occur when third-party actors engage in sanctions-busting activities that involve increasing the amount of commerce or foreign aid they conduct with a target State. Sanctions-busting trade and investment with target States tends to be conducted by profitseeking individuals and firms, while sanctions-busting aid tends to be given by politically-motivated governments.4 Individuals and firms from States imposing sanctions can add to the problem of external violations by exploiting loopholes or weaknesses within their home countries’ sanctions policies to work through third-party intermediaries to continue their commercial relationships with sanctioned parties. Such activities may violate the spirit of sanctioning efforts, even if they do not legally violate the sanctions policies. Governments face numerous challenges in obtaining compliance from their own constituents and in preventing sanctions busting commerce. Most international trade is conducted directly by individuals and firms, whose activities are subject to regulation by the countries they operate in and do business with. Many firms not only do business internationally but are also multinational in character. The international transactions that firms engage in have also become increasingly complex, involving multiple actors involved in the manufacture of products, the brokering of deals, the financing and insurance of deals, the transportation of products, and the services provided to end-users. Such transactions often involve activities in numerous different countries and citizens of multiple nationalities. Just the physical transportation of goods from a s­ upplier 3 G.C. Hufbauer, J.J. Schott, K.A. Elliott and B. Oegg, ‘Economic sanctions Reconsidered’, cit.; N. Bapat and T. Clifton Morgan, ‘Multilateral versus Unilateral Sanctions Reconsidered: A Test Using New Data’, cit., p. 1082. 4 D. Lektzian and G. Biglaiser, ‘Investment, Opportunity, and Risk: Do u.s. Sanctions Deter or Encourage Global Investment?’, 57:1 International Studies Quarterly (2013), pp. 65–78; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail (Stanford: Stanford University Press, 2015).

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to end-user often involves ships and vehicles registered to multiple c­ ountries, with multinational crews, and can involve being transited and transshipped through numerous countries en route to the goods’ destination. For businesses, just understanding the full scope of all the potential policies and laws that should regulate their international transactions can be a challenging endeavor. Governments face challenges in monitoring the behavior of not only their own citizens, who might be conducting a significant share of their activities abroad, but also a multitude of foreign actors and transactions that may be subject to their jurisdiction as well. The more international commerce that a country conducts, the more challenging it becomes to monitor and regulate such commerce effectively. The disruptive character of economic sanctions makes them even harder regulatory policies to implement and enforce. Economic sanctions, especially those that are trade or financially oriented, seek to restrict profitable commercial relationships that constituents have established with sanctioned actors. Such policies force firms to forsake profitable commercial relationships with partners that they may have long-standing, deep-seated relations with. Com­ plying with sanctions can also be very costly for some businesses, jeopardizing firms’ profitability and individuals’ livelihoods. Many business sectors are thus hostile towards sanctions policies – lobbying policymakers against their adoption, publically criticizing such policies, and finding ways of resisting or circumventing them. Some of the methods of circumventing sanctions may be legal, such as exploiting loopholes or gaps in the sanctions’ coverage, while other methods may be illegal. The stakes are often high enough to make the risks and potential costs of illegally violating sanctions an attractive option for at least some parties. Whereas governments that impose sanctions face challenges in gaining the compliance of their constituents, the challenges involved in gaining the compliance of foreign individuals and firms are even greater. Informing foreign businesses of sanctions policies can be difficult due to language barriers and foreigners’ lack of familiarity with a country’s laws and policies. While the internet and e-governance has mitigated the challenges to obtaining this information, companies often have to be proactive about learning what their legal obligations are. The fact that single international transactions may involve the legal jurisdictions of multiple countries – and some very indirectly – complicates these challenges. For example, numerous large European-based financial institutions ran afoul of u.s. sanctions by facilitating sanctions-busting transactions. Specifically, it was alleged that a number of European banks helped finance sanctions-busting transactions using assets and wire transfers

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that fell under the jurisdiction of u.s. law.5 Many of these violations went on for years without detection. Monitoring foreign actors that may be subject, at least in part, to a government’s sanctions policies is often far harder than gaining domestic compliance. Investigating and prosecuting violations conducted by foreign actors is also far more difficult. The management and oversight of economic sanctions can be complicated, sometimes involving layers of different sanctions policies and multiple government actors. In the United States, both Congress and the President can authorize sanctions and a host of different agencies might be involved in the imple­mentation of sanctions. Looking just at the u.s. sanctions imposed against Iran, the u.s. Government has distinct sanctions policies imposed against the country for the purposes of democratization, human rights, anti-terrorism, and nonproliferation. These various sanctions policies are administered by multiple agencies, including the u.s. Department of Commerce, u.s. Department of State, and u.s. Department of Treasury and multiple law enforcement bodies can be involved in investigating violations. In the case of the eu, restrictive measures adopted under the framework of the Common Foreign and Security Policy (cfsp) sometimes require additional legal implementation by Member States and nearly all policies require direct enforcement at the national-level. As these examples illustrate, the implementation of sanctions can be an administratively complex process that entails coordination and buy-in from a multitude of actors. In many cases, foreign individuals and businesses that undercut a sender State’s sanctions fall completely outside of its jurisdiction and the sanctionsbusting transactions they conduct are perfectly legal in third-party States. Indeed, the governments of third-party States may even encourage the development of commercial relationships with sanctioned States for political and economic reasons.6 The more effective a government is at imposing 5 Steptoe and Johnson llp, ‘uk and Japanese Banks Settle us Sanctions and Money Laundering Violations’ Newsletters (21 December 2012), available at http://www.steptoe .com/publications-newsletter-703.html; F. Coppola, ‘bnp Paribas: Sanctions, Fines and Politics’, Forbes (31  May 2014), available at http://www.forbes.com/sites/francescoppola/ 2014/05/31/bnp-paribas-sanctions-fines-and-politics/; ‘French Bank Pleads Guilty to Criminal Violations of u.s. Sanctions Laws’, 108:4 American Journal of International Law (2014), pp. 826–831. 6 See: B.R. Early, ‘Sleeping with Your Friends’ Enemies: An Explanation of Sanctions-Busting Trade’, 53:1 International Studies Quarterly (2009); B.R. Early, ‘Alliances and Trade with Sanctioned States: A Study of u.s. Economic Sanctions, 1950-2000’, Journal of Conflict

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sanctions that disrupt a target State’s commerce, the worse the target’s terms of trade with the rest of the world becomes and the more profitable it is for third parties to do business with it.7 As such, there are almost always third parties that have incentives to step-in and replace the commerce lost or disrupted as a result of sanctions. Research has found that trade-based sanctions busting is one of the leading causes of why sanctioning efforts fail. When target States receive the support of trade-based sanctions busters, it mitigates the adverse economic effects that sanctions inflict. Having the support of even a single major sanctions-busting State has been found to dramatically decrease the likelihood of sanctioning efforts being successful.8 Major sanctions busters are relatively rare, however. Looking at the trade relationships that target States had with other third-party States, only about 2% of the yearly observations involve extensive sanctionsbusting relationships.9 On a case-to-case basis and over time, though, the number of States engaging in extensive sanctions busting on a target State’s behalf can vary widely. Figure  1 provides a proportional breakdown of the countries that have been most involved in trade-based sanctions-busting world-wide. It uses data from a global study that examined sanctions-busting behavior in a 164 sanctions episodes from 1950–2002.10 As the figure reveals, a relatively small number of States are responsible for the lion’s share of the sanctions-busting that takes place. Trade-based sanctions busters tend to be countries with large, open economies, democratic regimes, and that share pre-existing political Resolution (2012); B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit. 7 W.H. Kaempfer and A.D. Lowenberg, ‘Unilateral Vs. Multilateral Sanctions: A Public Choice Perspective’, 43 International Studies Quarterly (1999); D. Drezner, ‘Bargaining, Enforcement and Multilateral Sanctions: When Is Cooperation Counterprodu­ctive?’, cit. 8 B.R. Early, ‘Unmasking the Black Knights: Sanctions Busters and Their Effects on Sanctions Success’, cit.; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit. 9 This estimate relies on sanctions sanctions-busting figures drawn from B.R. Early and R. Spice, ‘Economic Sanctions, International Institutions, and Sanctions Busters: When Does Institutionalized Cooperation Help Sanctioning Efforts?’, 11.3 Foreign Policy Analysis (2015), pp. 339–360. 10 This data relies on a list of sanctions drawn from Hufbauer et al. (2007) and data on the identities of major sanctions-busting States from B.R. Early and R. Spice, ‘Economic Sanctions, International Institutions, and Sanctions Busters: When Does Institutionalized Cooperation Help Sanctioning Efforts?’, cit.

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Early Soviet Union / Russia 2%

Rest of the World 39%

China 4% United Kingdom 6% Italy 6%

France 6%

Japan 10%

Germany 14%

Figure 1

United States of America 13%

Distribution of the total number of sanctions-busting observations among the leading sanctions busters, 1950–2002.

and economic ties to the States being sanctioned.11 France, Germany,12 Japan, Italy, and the United Kingdom are all leading sanctions busters and the United States is second on the list. This might surprise some, as the United States has also been the country most strident in seeking to prevent other States from undercutting its own sanctions. It is also notable that 96 out of the 199 States included in the data set never engaged in extensive sanctionsbusting. These findings indicate that many of the States most actively engage in sanctions-busting activities are economically powerful, militarily powerful, or both. To summarize, economic sanctions are policies that face substantial challenges in gaining compliance from domestic and foreign parties that are subject to the sanctions’ jurisdiction and also face threats to their effectiveness from third-party sanctions busting. Implementing economic sanctions can also be an administratively complex and politically challenging endeavor. Governments that succeed in effectively implementing sanctions will face subsequent challenges from third-parties seeking to profit from the 11

12

See: B.R. Early, ‘Sleeping with Your Friends’ Enemies: An Explanation of Sanctions-Busting Trade’, cit.; B.R. Early, ‘Alliances and Trade with Sanctioned States: A Study of u.s. Economic Sanctions, 1950–2000’, cit.; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit. The figures combine the totals of the Federal Republic of Germany and post-unification Germany.

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commercial opportunities created by the sanctions. While sanctions busting represents a pernicious threat to the success of sanctioning efforts, sanctions that are not effectively implemented have even fewer prospects for success. 3

Conceptualizing Enforcement Challenges: Unintentional and Deliberate Sanctions Violations

Economic sanctions policies face threats from domestic and foreign parties that are subject to their sanctions and from foreign parties that have no legal obligation to abide by the sanctions. The policy instruments and strategies that governments have to affect the behavior of those parties subject to their sanctions are quite distinct from the tools States can use against those that are not. In developing strategies to make sanctions more effective, it is useful to distinguish between those violations that are unintentional versus those that are deliberate. Unintentional violations are those that occur because the parties subject to sanctions obligations are either unaware that sanctions have made certain transactions illegal or parties do not understand how to properly comply with sanctions laws. Deliberate violations occur when parties understand what they are doing legally violates sanctions policies but do so anyway. The total pool of sanctions violators that a sanctioning government must identify is divided between unintentional and deliberate violators. It is important to note that parties may find legal methods of circumventing sanctions that may violate the spirit in which the sanctions were imposed but do not violate the law. Understanding which loopholes or gaps that businesses are using can lead to the adoption of improved, strengthened sanctions policies that address those deficiencies. Sanctions-busting conducted by third-party firms also falls under the deliberate category, but affecting such parties’ behavior requires political instead of legal remedies. Table 1 presents a schema for categorizing the types of violators that undercut sanctioning efforts broken down by whether the violations were unintentional or deliberate and whether parties are directly subject to the sanctions’ jurisdiction. 3.1 Unintentional Violations by Parties Subject to Sanctions As a category, unintentional violations are rooted in the informational and technical challenges required to comply with sanctions policies. Economic sanctions can be adopted through numerous different legal mechanisms, such as executive orders/decrees, legislation, or administrative determinations. u.s. presidents, for instance, can invoke the authority granted to them under the

52 Table 1

Early Categories of economic sanctions violators

Parties Within Sanctions’ Jurisdiction

Parties Outside of Sanctions’ Jurisdiction

Unintentional Violations

• Parties that will comply if they understand the obligations

Deliberate Violations

• Parties that conduct illegal sanctions-busting activities

• Third-party firms conducting businesses as usual • Parties that legally circumvent sanctions • Active third-party sanctions busters

International Emergency Economic Powers Act (ieepa) to authorize economic sanctions against another country via an executive order. For example, President Obama issued Executive Order 13606 in 2012 that placed restrictions on doing business with accused human rights violators in Syria and Iran. The u.s. Congress can also pass sanctions legislation, as it did in the case of the Iran-Libya Sanctions Act in 1996. Finally, some government agencies are granted the authority to designate that specific parties are subject to sanctions restrictions. In the United States, individuals can be placed on a list of ‘Specially Designated Nationals’ (sdns) subject to sanctions restrictions based on determinations made by authorities such as the Secretary of the Treasury. Some sanctions fully prohibit all transactions with certain States, government agencies, firms, or individuals. Others only prohibit certain types of transactions or require parties to obtain a license from the government to engage in certain types of transactions. Finally, some sanctions policies require companies to verify that their foreign transactions are not indirectly contributing to the violation of sanctions by third-party actors. Companies that do business in the United States or with u.s. partners thus confront a bewildering array of specific sanctions policies that emanate from different authorities – many of which differ in form and scope, are subject to different requirements, and have different compliance requirements. Moreover, these requirements are subject to periodic updates and changes. Unintentional violations are the result of individuals and firms not being aware of specific sanctions policies that their commercial transactions may be violating, not understanding the requirements to comply, or not sufficiently investing to ensure that their activities are not violating sanctions. While larger

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corporations may have dedicated compliance officers, many small and mediumsized companies may not have dedicated staff in those areas. Some companies may also lack staff members with the legal and technical knowledge to understand compliance obligations. Firms may also have limited abilities to investigate who their customers are and what sanctions-related risks may be involved in doing business with them. Especially when sanctions originate from different agencies and involve global lists of sanctioned entities, even firms that make good faith efforts to understand sanctions obligations may not be able to keep track of them. Sanctions implementation strategies that assume all affected businesses keep abreast of new developments and understand how to comply with sanctions may leave a large pool of constituents in the dark about their compliance obligations. Depending upon how sanctions policies are drafted, parties are often still held legally accountable for unintentional violations. For example, the online payments company PayPal recently reached a settlement with u.s. Department of Treasury’s Office of Foreign Assets Control (ofac) over ‘486 apparent violations’ of u.s. sanctions. The apparent violations were alleged to have involved individuals on the sdns list and transactions subject to sanctions involving Cuba, Iran, and Sudan.13 As part of the settlement agreement, it was noted that PayPal did not have an effective system for screening whether its financial transactions involved individuals or entities on the United States’ list of sdns until 2013.14 At least in one case, though, it was reported that company staffers ignored information that indicated that one of its users was black-listed for his involvement in illicit proliferation activities.15 Failing to adopt procedures that ensured compliance with u.s. sanctions allowed the company’s users to exploit the firm’s services in sanctions-busting transactions.16 Importantly, most of the parties within this category would comply with sanctions obligations if they were aware of them and understood the proper means of complying of them. The size of this pool of violators will vary based upon the effectiveness of governmental outreach efforts and culture of regulatory compliance that exists within a given country. If governments fail to 13

14 15 16

ofac, u.s. Department of Treasury, ‘Settlement Agreement with PayPal’, mul-762365 (25 March 2015), Washington, dc: u.s. Department of Treasury, pp. 2–3, available at http:// www.treasury.gov/resource-center/sanctions/CivPen/Documents/20150325_paypal _settlement.pdf. ofac, ibid., p. 1. ofac, ibid., p. 3. Under the terms of the settlement with the u.s. Government, PayPal “didn’t admit or deny the allegations”, see L. Ensign, ‘Business News: PayPal to Pay Sanctions Fine’, Wall Street Journal (26 March 2015).

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promote new sanctions policies or provide guidance for parties seeking to comply, the pool of unintentional violators may be quite large. Depending upon the culture of corporate compliance within countries,17 firms may have devoted comparatively smaller or larger resources towards ensuring their business activities comply with government policies. For governments seeking to obtain compliance with their sanctions, aggregate attitudes towards compliance serve as a detriment or boon to obtaining compliance with sanctions. 3.2 Deliberate, Illegal Violations This category of sanctions violator is aware of the requirements imposed by sanctions but intentionally chooses not to comply with them. As noted above, economic sanctions can force businesses to give up lucrative business relationships and jeopardize their profitability and even survival. Under such circumstances, individuals and firms may be willing to risk violating sanctions in order to continue doing business with sanctioned entities. As well, some opportunistic parties may be attracted to doing business with sanctioned entities given that those commercial activities can be very lucrative. Government officials that investigate violations may sometimes face difficulties in ascertaining whether they were deliberate in nature. Smoking-gun evidence that the parties involved were aware that their activities were illegal can be difficult to obtain. Often times, though, sanctions violations also involve related crimes, such as: fraud, forgery, bribery, and money laundering. Inves­tigating sanctions violations often uncovers a much broader suit of criminal behaviors and administrative violations than just the violation of sanctions policies alone. Several recent cases involving u.s. sanctions violations illustrate what deliberate violations look like. In a recently settled case, the u.s. Government imposed a $232,708,356 fine on Schlumberger Oilfield Holdings Ltd. for violating sanctions imposed under ieepa against both Iran and Sudan. In this case, the u.s. firm was charged with facilitating sanctions-busting transactions being conducted by third-party actors. Investigations uncovered that the company not only orchestrated violations of u.s. sanctions abroad from u.s.-based offices but also “took steps to disguise those business dealings”.18 In individual 17

18

For example, for a governmental perspective on compliance cultures, see B. Snyder, ‘Compliance is Culture, Not Just a Policy’, Remarks Prepared for the International Chamber of Commerce / United States Council of International Business Joint Antitrust Compliance Workshop (New York, 9 September 2014), available at http://www.justice.gov/atr/public/ speeches/308494.pdf. u.s. Department of Justice, Office of Public Affairs, ‘Schlumberger Oilfield Holdings Ltd.  Agrees to Plead Guilty and Pay Over $232.7 Million for Violating us Sanctions by

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criminal charges filed against Li Fangwei in 2014, u.s. prosecutors alleged the Chinese national engaged in millions of dollars-worth of prohibited transactions with Iran. Li was allegedly involved in assisting Iran in acquiring sanctioned goods and technologies for its ballistic missile program, relying on a vast network of front companies to conduct illicit transactions. The set of federal charges leveled against Li include “conspiring to commit wire fraud and bank fraud, a money laundering conspiracy, two separate violations of ieepa, and two separate substantive counts of wire fraud” in connection with the alleged violations. The u.s. Government went so far as to place a $5 million bounty on information or assistance leading to Li’s arrest.19 Detecting deliberate violations requires governments to make significant investments in monitoring potentially illicit transactions and in conducting what are often complicated and resource-intensive investigations due to their international nature. Governments often have limited resources to devote towards monitoring and enforcing sanctions policies and those resources can be spread thin if governments have multiple, ongoing sanctions initiatives. Lackluster monitoring and enforcement can provide risk-acceptant firms with incentives to violate sanctions policies if they think the chances of being caught are low and/or the punishments for violations are weak.20 Widespread noncompliance can also discourage firms that would prefer to comply to violate sanctions policies because abiding by them places them at a competitive disadvantage relative to non-compliant firms. Sanctions violations can thus be  contagious. For the multitude of European banks involved in facilitating sanctions-busting transactions that undercut u.s. sanctions in places like Iran and Syria, elements of this dynamic appeared to be at play – at least until u.s. policymakers became very aggressive in investigating and seeking to punish financial-related sanctions violations starting in 2009.21

19

20 21

Facilitating Trade with Iran and Sudan’, Justice News (25 March 2015), available at http:// www.justice.gov/opa/pr/schlumberger-oilfield-holdings-ltd-agrees-plead-guilty-and -pay-over-2327-million-violating-us. u.s. Department of Justice, u.s. Attorney’s Office, ‘Li Fangwei Charged In Manhattan Federal Court With Using A Web Of Front Companies To Evade u.s. Sanctions’, Press Release (29 April 2014), available at http://www.justice.gov/usao-sdny/pr/li-fangwei -charged-manhattan-federal-court-using-web-front-companies-evade-us-sanctions; J.  Morley, ‘Tehran’s Chinese Missile Man’, The Dailey Beast (9 June 2014), available at http://www.thedailybeast.com/articles/2014/06/09/tehran-s-chinese-missile-man.html. T.C. Morgan and N. Bapat, ‘Imposing Sanctions: States, Firms, and Economic Coercion’, 5:4 International Studies Review (2003), p. 76. For an extensive list of parties subject to settlements and fines issued by the u.s. Treasury’s Office of Foreign Asset Control related to sanctions violations, see: ‘ofac Settlement

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3.3 Deliberate but Legal Violations There are two types of behaviors that constitute deliberate but legal activities that undercut sanctioning efforts. This includes the actions of parties subject to sanctions that have found legal methods of circumventing sanctions and third-party actors that are not directly subject to the jurisdiction of sanctions. Conceptually, it might be considered a misnomer to categorize these behaviors as sanctions violations because they do not directly violate laws. From a policy perspective, however, these actions undermine the ability of sanctions to achieve the goals for which they were imposed. Governments seeking to improve the effectiveness of their sanctions must thus consider these types of violations alongside those that fall under their direct legal jurisdiction to address. Conceptualizing the two types of violations described here requires recognizing that a maximum limit exists in the potential scope of the legal jurisdiction of the sanctions a government adopts. This implies that there is a subset of sanctions violators whose activities could also be made illegal with changes to specific sanctions policies, and a subset of actors and activities that a sanctioning government cannot legally subject to sanctions obligations. Governments can still influence the latter group via other policy mechanisms, though. The first category of deliberate but legal violations involves domestic and foreign parties whose activities could potentially be subject to sanctions but are not. This allows parties to legally maintain their commercial relationships with sanctioned parties – often through indirect means – despite the fact that sanctions restrictions are meant to prevent such relationships. One common method of circumventing sanctions involves the use of intermediaries or ­middle-men in third-party countries. If sanctions block direct exports to a given actor or country, firms can find a partner in a country whose government is not participating in the sanctions to facilitate the transaction and can be traded freely with. The emirate of Dubai in the United Arab Emirates, for example, gained an international reputation for being the preeminent venue for sanctions busters seeking to circumvent u.s. sanctions against Iran.22 u.s. companies would export products to partners in Dubai, who would then

22

Agreements’, Visual ofac (2014), available at http://www.visualofac.com/resources/ settlement-agreements.cfm; F. Coppola, ‘bnp Paribas: Sanctions, Fines and Politics’, Forbes (31 May 2014), available at http://www.forbes.com/sites/francescoppola/2014/05/31/ bnp-paribas-sanctions-fines-and-politics/. R. Barrett, ‘Sanctions-busting is in Dubai’s dna’, The Guardian (20 April 2010), available at http://www.theguardian.com/commentisfree/2010/apr/20/iran-sanctions-busting-dubai; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit., Chapter 5.

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forward or re-sell the products to end-users in Iran. Until the passage of Executive Order 13,059 in 1997, this strategy represented a legal way for u.s. companies to circumvent u.s. sanctions against Iran.23 Notably, sanctioned parties have significant incentives to search out potential trading partners in the countries imposing sanctions that are either unaware of their sanctions obligations or willing to participate in deliberate, illegal transactions. Within countries like Iran, traders have developed sophisticated strategies for finding trade partners that they can exploit in circumventing sanctions and developed complicated schemes for avoiding detection.24 Both internal and external forces can thus motivate this type of sanctions-busting transactions. Another popular strategy involves using foreign-owned subsidiaries located in other countries that do not participate in the sanctions imposed against targeted entities. Frequently, sanctions policies do not apply foreign-owned subsidiaries. Sanctions may also fail to apply to foreign-owned subsidiaries of sanctioned entities. For instance, the eu sanctions imposed against Russia’s leading financial institutions in 2014 did not apply to the subsidiary banks those institutions owned within eu countries. This substantially weakened the financial sanctions’ potential impact.25 Finally, companies can also exploit legal loopholes that policymakers left open. In the case of financial sanctions imposed against Iran by the eu and United States, the original sanctions did not apply to trade involving precious metals. As such, Iran began conducting transactions using gold instead of hard currency or wire transfers for sales of its fossil fuels. At least for a while, exploiting this loophole allowed Iran to circumvent the u.s. and eu sanctioning efforts that sought to make it too difficult and costly for Iran sell its fossil fuels abroad.26 The second type of sanctions-busting exists in third-party countries and involves commercial activities that are not directly subject to a sender State’s sanctions laws. These third-party actors can provide target States with indigenous replacements for products, capital, or services that sanctions deny to 23 24 25 26

For an extensive discussion of Dubai’s involvement in sanctions busting, see B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit., Chapter 5. For more on this, see J. Shiffman, Operation Shakespeare: The True Story of an International Sting (New York: Simon & Schuster, 2014). D. Enrich, G. Steinhauser and M. Dalton, ‘Loopholes Blunt Sanctions’, Wall Street Journal (31 July 2014). J. Parkinson and E. Peker, ‘Turkey Swaps Gold for Iranian Gas’, Wall Street Journal (24 November 2012).

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them. As noted above, they can also profit from serving as intermediaries in helping companies who have had their business disrupted by sanctions maintain their relationships with sanctioned customers via indirect means. Such activities are often not illegal in third-party States and may even be encouraged. Certain third-party States that are politically, geographically, and/or commercially advantaged in trading with sanctioned States can become focal points for sanctions-busters. The aforementioned Dubai, for example, became a hub for traders from all over the world that sought to do business with Iran.27 Dealing with this type of third-party sanctions buster requires political rather than legal measures to address. 4

Making Sanctions More Effective: Investing Scarce Resources in the Implementation and Enforcement of Sanctions

Given the challenges that governments face in preventing their sanctioning efforts from being undermined and the limited resources often made available for administering sanctioning efforts, policymakers must be extremely efficient in their efforts to make sanctions effective. In this section, I argue that policymakers should adopt policies to mitigate unintentional violations and maximize their sanctions’ potential jurisdiction. This strategy will empower governments to focus their enforcement efforts on the prevention of deliberate, illegal violations and make it harder for third-party sanctions busters to serve as middle-men for sanctioned transactions. While this strategy cannot fully address the challenges posed by third-party sanctions-busting through legal solutions, it concentrates policymaker’s efforts on preventing deliberate, illegal violations and should enhance the overarching effectiveness of sanctioning effectiveness. 4.1 Strategies for Mitigating Unintentional Violations Investing in the mitigation of unintentional violations can provide government with major returns in enhancing the effectiveness of their sanctioning efforts, but it may require large, up-front investments in the approaches governments use to implement sanctions. By ensuring that all domestic and foreign parties that are subject to the jurisdiction of a sanctioning effort are informed of their obligations 27

See: B.R. Early, ‘Sleeping with Your Friends’ Enemies: An Explanation of Sanctions-Busting Trade’, cit.; B.R. Early, ‘Alliances and Trade with Sanctioned States: A Study of u.s. Economic Sanctions, 1950–2000’, cit.; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit.

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and understand how to comply with them, governments can reduce the aggregate number of sanctions violations they experience. This approach aids in obtaining the compliance of all the parties that will comply if they are sufficiently educated about the policies. This strategy also helps eliminate ‘ignorance as an excuse’ for parties that engage in deliberate, illegal sanctions violations. By substantially reducing the number of firms and individuals that are unaware of their sanctions obligations, governments also then limit the pool of potential partners that external sanctions busters can exploit in circumventing sanctions. Sanctions busters within third-party and target States will be limited to only trade partners in sanctioning States are willing to engage in criminal behavior, increasing the difficulty, costs, and risks of their sanctions-busting efforts. Obtaining broad-spectrum compliance with sanctions policies requires governments to make the obligations public, readily accessible, and reasonably comprehensible. E-governance strategies, such as creating internet portals that promote and explain sanctions obligations, are a good starting point. Govern­ ments often have to go farther, though, in reaching out to business sectors affected by new sanctions. They can do this via direct communications (for example, email notifications), via trade publications, or through sharing information with relevant industry associations and/or Chambers of Commerce. Investing in the promotion of new and existing sanctions policies helps reduce the likelihood that parities will be unaware of the sanctions obligations. Beyond just raising awareness of sanctions, governments can also invest in developing resources to educate firms about their sanctions obligations. Some governments hold regular workshops or seminars in order to educate businesses about sanctions policies and how to comply with them. Governments can also establish hotlines that individuals or firms can call if they have questions about how to comply with specific policies or if they have questions about particular transactions. Governments can also encourage the adoption of internal compliance programs (icps) within their private sectors. icps are a set of written protocols that provide employees with formal guidance about the policies, procedures, and expectations that must be observed to ensure compliance with sanctions and export control-related obligations on all international transactions. By institutionalizing the practice of ensuring compliance among their employees, firms can dramatically reduce the likelihood that external sanctions busters can exploit them.28

28

For more on icps, see seesac, ‘Internal Compliance Programmes’ (2011), available at http://www.sipri.org/research/armaments/transfers/publications/other_publ/other _publ_default/other%20publications/Internal%20Compliance%20Programmes.pdf.

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Governments can also benefit from encouraging information-sharing practices, adopting whistle-blower protections, and being lenient with the selfdisclosure of violations.29 Governments that develop robust outreach programs to inform the business sector of their sanctions obligations can recruit business to become a valuable source of intelligence on the external parties seeking to undercut their sanctions. Beyond just cultivating information-sharing relationships with firms, governments should also provide individuals with whistleblower protections – and even rewards – for turning in sanctions violators. This can help to overcome the potential disincentives that individuals may face from reporting violations. Finally, governments should adopt policies that encourage businesses to voluntarily disclose inadvertent sanctions violations. They can do this by offering businesses that self-disclose lesser penalties and focusing responses on helping firms ensure that future violations do not occur. Notably, all three of the policies require a baseline level of trust between the government agencies responsible for implementing sanctions and actors within the business sector. Developing such trust requires sustained engagement by government officials and the development of sustained relationships between individuals within government and the business community. By convincing businesses to adopt icps and cooperate with the imposition of sanctions, governments can get businesses to police themselves. 4.2 Closing Loopholes and Maximizing the Scope of Sanctions Governments can maximize the effectiveness of their sanctions by minimizing the role that parties potentially subject to their sanctions jurisdiction play in undercutting their sanctioning efforts. This applies to transactions that take place within a government’s territory and the regulation of its citizens’ and firms’ activities abroad. Sanctions busters regularly rely on exploiting gaps and weaknesses in countries’ sanctioning efforts to legally undermine sanctioning efforts. The profitability of sanctions-busting trade motivates firms and individuals to invest in developing clever strategies for circumventing sanctions.30 These efforts are frequently abetted by third-party actors that are outside the scope of the sanctions’ potential jurisdiction or by parties within target ­countries that are actively working to bust the sanctions. By closing sanctions loopholes 29

30

This strategy is consistent with the ‘new governance’ perspective on regulatory strategies. For a discussion, see M. Baer, ‘Governing Corporate Compliance’, 50:4 Boston College Law Review (2009), available at http://lawdigitalcommons.bc.edu/bclr/vol50/iss4/2/. M. Dubowitz, ‘So You Want to Be a Sanctions-Buster’, Foreign Policy Online (10 August 2012), available at http://foreignpolicy.com/2012/08/10/so-you-want-to-be-a-sanctions -buster/.

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and maximizing the scope of sanctions, governments can help minimize a ‘fifth column’ segment of their populations that are deliberately undermining their own governments’ sanctions policies. It can also help to outlaw some sanctions-busting activities conducted by foreign parties. These measures maximize the ability of governments to treat sanctions-busting activities as illegal sanctions violations, punishable with civil and criminal penalties. When drafting their sanctions policies, governments may leave loopholes within them that savvy sanctions busters can exploit. Such loopholes may be unintentional or policymakers may have deliberately included them in order to mitigate the sanctions’ adverse impact on their constituents. An unintentional loophole might include a certain class of products that can serve as replacements for sanctioned products, but are not directly subject to sanctions. Such loopholes, for example, have allowed North Korea to continue acquiring foreign products for its ballistic missile programs despite the un’s missile-related sanctions on the country.31 Governments can also deliberately build loopholes into their sanctions. France, for example, lobbied fellow eu members to exempt its planned delivery of a Mistral warship to Russia from the military-related sanctions the eu imposed against Russia in 2014. Part of a $1.5 billion arms sale, France was initially determined to follow through with the sale before it conceded to international pressure to freeze the ­transaction.32 Leaving in large, deliberate loopholes waters down the impact of sanctions and leads firms to question whether governments are truly committed to enforcing them. Governments can maximize the coverage of their sanctions by expanding the scope of activities subject to sanctions and expanding the reach of their laws beyond their borders. The scope of economic sanctions can be expanded by extending restrictions to activities that facilitate in sanctioned commercial transactions taking place. Modern international trade frequently involves a multitude of specialized roles in facilitating individual transactions. Such activities can involve brokers, who help match buyers and sellers and can facilitate negotiations, and banks that are involved on the financial side of transactions. Governments can also extend sanctions requirements to businesses involved in the transportation of physical goods, such as freight-forwarders, shipping carriers, and parties that insure those transactions to ensure that they 31 See un North Korea Sanctions Committee, ‘Report of the Panel of Experts established pursuant to Resolution 1874 (2009)’, S/2014/147 (6 March 2014). 32 T. Hirst, ‘France Just Fired The Guy In Charge Of Selling Warships To Russia’, Business Insider (3 November 2014), available at http://www.businessinsider.com/france-just-fired -the-guy-in-charge-of-selling-warships-to-russia-2014-11#ixzz3csJ72W8T.

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do not facilitate sanctions violations. Finally, governments can extend sanctions requirements to restrict the provision of related-services, such as providing customer service and providing repair or warranty services. Take, for example, the eu’s energy sector-related sanctions imposed against Russiancontrolled Crimea via eu Council Regulation 1351/2014. Article 2b of the measure explicitly prohibited the export of specific energy-related products to Russia, along with direct or indirect “technical assistance or brokering services related to the goods and technology…or related to the provision, manufacture, maintenance and use of such items to any natural or legal person, entity or body in Crimea or Sevastopol or for use in Crimea or Sevastopol”.33 The measure also restricts the provision of financial services related to such transactions. Using broad-scope sanctions like this cuts off many of the avenues that businesses can employ to legally circumvent their sanctions obligations. This limits the potential partners available to sanctioned entities and enhances the difficulty, costs, and risks of the sanctions-busting transactions they seek to undertake. Applying extra-territorial provisions to economic sanctions constitutes another strategy for expanding their scope. Governments can require that their citizens’ not engage in any of the transactions restricted by sanctions even if they are abroad. Such sanctions provisions thus travel with a country’s citizens wherever they are in the world, preventing them from engaging in sanctions-busting activities in third-party countries. Governments can also forbid their firms from partnering with third-party middlemen to circumvent sanctions. Under such schemes, firms continue doing business with sanctioned entities indirectly via one or more intermediaries located in States not participating in the sanctioning effort. Sanctions policies, such as u.s. Executive Order 13059 (1997), require companies to know their foreign customers and vouch for the fact that they are not exploiting the transaction for sanctionsbusting purposes. Under this policy, firms can be held liable for their trading partners’ sanctions-busting activities. Laws may assign varying degrees of blame upon violators based upon their perceived complicity in deliberately undermining the sanctions provisions. Finally, governments can mandate that multinational corporations’ foreign-owned subsidiaries must also comply with their sanctions policies. Whereas foreign-own subsidiaries may be located in third-party countries that are not participating in a sanctioning effort, 33

European Union, Council Regulation (eu) No. 1351/2014 of 18 December 2014 amending Regulation (eu) No. 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol, available at http://eur-lex.europa.eu/legal-content/ EN/TXT/?uri=uriserv:OJ.L_.2014.365.01.0046.01.ENG.

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governments can force them to adhere to the same laws and regulations as their ­parent companies. Note that a number of these provisions have proven to be controversial when the u.s. Government has applied them in the past, raising the ire of foreign governments and business communities.34 They also present significant monitoring and enforcement challenges, because related violations take place overseas. Adopting extraterritorial sanctions provisions, though, can greatly expand the legal jurisdiction of both whether and to whom sanctions apply. Identifying, Punishing, and Publicizing Deliberate, Illegal Sanctions Violations Minimizing the problem of unintentional violations and maximizing the jurisdictional scope of sanctioning efforts serve to reduce the number of overarching sanctions violations that take place and concentrate those that still occur within the category of violations that governments can legally punish. Sanc­ tions legislation should contain meaningful administrative and criminal penalties for violations, but allow authorities discretion in applying them. In order to detect violations, governments should sufficiently invest in monitoring compliance with the sanctions. Finally, officials should be empowered to publicize all indictments, convictions, and penalties related to sanctions violations. Naming-and-shaming strategies can be a significant deterrent for reputationconscious businesses and also contribute to raising public awareness of the sanctions. To make sanctioning efforts most effective, sanctions legislation needs to empower authorities to impose both administrative and criminal penalties and provide them with the discretion to impose penalties appropriate to the nature of the violations. Administrative penalties for businesses can comprise fines, the suspension of trading privileges, the suspension of access to import– export bank financing, and/or being prohibited from receiving government contracts. Criminal penalties for individuals can entail fines, the seizure of assets, prison sentences, or a combination thereof. When sanctions-busting opportunities are particularly lucrative, the potential deterrent value of fines alone may not be sufficient to deter individuals from sanctions-busting. In such cases, the potential for prison time may be the only effective deterrent. Providing authorities with broad discretion in setting penalties can be helpful both in dealing with major violators and companies that self-disclose violations. 4.3

34

See K. Rodman, Sanctions Beyond Borders (New York: Rowman & Littlefield Publishers, 2001), p. 120; B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit., Chapter 7.

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The u.s. Government, for instance, empowered authorities to pursue a series of record-setting settlement agreements with European banks for their involvement in facilitating sanctions-busting transactions.35 In order to force these banks to change their behaviors, assessing fine in the hundreds of millions of dollars – and even billions of dollars – was necessary. These fines were also meant to be a deterrent to other banks that might consider facilitating in sanctionsbusting transactions.36 In contrast, authorities should have the ability to reduce penalties assessed against sanctions violators that engage in voluntary self-disclosure and cooperate in ensuring that they are not involved in any future violations. For example, § 764.5 of the u.s. Government’s Export Administration Regulations explicitly makes self-disclosure a mitigating circumstance for administrative penalties assessed in the case of export controlrelated violations.37 Having discretion over the penalties imposed for violations provides authorities with leeway in severely punishing serious sanctions violators while also incentivizing non-compliant firms to come clean and start complying with their sanctions obligations. Sanctions obligations also need to exist on more than just paper alone, requiring governments to invest resources in the monitoring and enforcement of the private sector’s compliance with them. This includes tasking personnel to monitor corporate compliance, empowering them to conduct audits and site visits, and providing the resources necessary to conduct investigations in foreign countries. Detecting and investigating sanctions violations requires a multitude of governmental resources. Many sanctions violations involve the use front companies, money laundering, falsified documents, and fraud, requiring investigators specializing in white-collar crime. Sanctions violations may also be detected at borders by customs or border patrol agencies or require law enforcement agents to conduct investigations and/or sting operations in the field.38 Investing resources in the capacity to monitor compliance administratively, at the borders, and in the field is important. Foreign intelligence, especially about sanctions violations taking place overseas, can also be 35

36 37 38

F. Coppola, ‘bnp Paribas: Sanctions, Fines and Politics’, Forbes (31 May 2014), available at http://www.forbes.com/sites/francescoppola/2014/05/31/bnp-paribas-sanctions-fines -and-politics/; T. Reuters, ‘Fines for Banks that Breached u.s. Sanctions’ (2015), available at https://risk.thomsonreuters.com/infographic/fines-banks-breached-us-sanctions. ‘French Bank Pleads Guilty to Criminal Violations of u.s. Sanctions Laws’, 108:4 American Journal of International Law (2014), p. 829. See ‘15 cfr 764.5 – Voluntary self-disclosure’, Legal Information Institute (Ithaca: Cornell University Law School) (2015), available at https://www.law.cornell.edu/cfr/text/15/764.5. See J. Shiffman, Operation Shakespeare: The True Story of an International Sting (New York: Simon & Schuster, 2014).

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an extremely valuable resource. Governments should require interagency ­information-sharing and cooperation between those agencies tasked with implementing sanctions, intelligence agencies, and the members of customs and law enforcement agencies tasked with investigating sanctions-related violations. If governments have done an effective job raising awareness through their implementation efforts, the task of detecting violations should be easier as fewer unintentional violations will be taking place. This should allow governments to focus their efforts on detecting deliberate violations. A final strategy that governments can employ to enhance their enforcement strategies relates to their approach for publicizing violations. For reputation conscious businesses, the reputational damage suffered as a result of their involvement in sanctions-related violations can be as harmful as the specific penalties that governments impose. Naming-and-shaming strategies are a lowcost strategy for governments to enhance the deterrent value of sanctions-related penalties. By publicizing indictments, governments can impose sig­nificant reputational costs on businesses without having to convict them in court. Beyond just increasing the costs associated with being caught, publicizing cases of sanctions violations provides tangible public evidence that the government is enforcing sanctions. If businesses perceive the risks of being caught for violating sanctions as low, they are more likely to violate them. Communicating to businesses that both the penalties for violating sanctions and the risks of being caught are high can substantially enhance compliance with sanctions.39 Finally, publicizing sanctions violations is another method that governments can use to help raise general awareness of sanctions obligations. As an excellent example of how governments can employ naming and shaming strategies, the u.s. Government’s Bureau of Industry and Security regularly publishes a report entitled Don’t Let This Happen to You!40 This publication lists the names of individuals and companies that were caught violating sanctions and export control laws, provides information about the nature of their infractions, and lists the penalties imposed on violators. The publication represents a low-cost strategy for accomplishing each of the objectives highlighted above. 4.4 The Remaining Challenges Posed by Third-Party Sanctions Busting The outlined sanctioning strategies above should make it harder, risker, and more costly for sanctioned entities to continue doing business with partners 39 40

T.C. Morgan and N. Bapat, supra note 2, p. 76. u.s. Bureau of Industry and Security, ‘Don’t Let this Happen to You!’, Washington dc: u.s. Department of Commerce (2014), available at http://www.bis.doc.gov/index.php/forms -documents/doc_view/1005-don-t-let-this-happen-to-you-071814.

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from the State(s) imposing sanctions. They should reduce the pool of firms within sanctioned States that can be exploited for sanctions-busting transactions because they are unaware of their sanctions obligations. They will also enhance the scope of the sanctions and allow governments to focus on identifying and punishing parties that are deliberately violating sanctions. Yet by making the sanctions against the target more effective, sanctioning governments will also have enhanced the profitability of trading with the target State for those third-party businesses willing to do it. As long as those third parties’ business activities remain outside of the sanctions’ jurisdiction, sanctioning governments have only political means of recourse (instead of legal ones) to address them. Governments can seek to stop third-party sanctions busting by pressuring third-party governments or employing secondary sanctions. Such strategies can be costly and lead to political backlash, however, and provide only a limited treatment of the problem. Governments can seek to prevent third-party States from being used as sanctions havens by recruiting their governments to join sanctioning efforts, but doing so can be fraught with challenges. Given that adopting sanctions tends to be costly and third-party States’ political interests in sanctioning target States can be mixed, third-party governments must often be coerced or bribed to participate in sanctioning efforts.41 When third-party governments are substantially profiting from sanctions-busting, the costs of obtaining their cooperation in sanctioning efforts can be too high to make coercing their cooperation worthwhile.42 This means that the governments whose cooperation with sanctioning efforts could contribute the most to their effectiveness are often the ones least likely to provide it. As Figure 1 also illustrated, many of the States actively involved in trade-based sanctions-busting are powerful enough to make coercing their compliance quite difficult. Instead of trying to obtain cooperation from third-party governments, sender governments can also seek to punish third-party sanctions busters directly via secondary sanctions. Using this strategy, sanctioning governments can bypass the need for obtaining the cooperation of third-party governments. Secondary sanctions are imposed against third-party individuals and businesses that do business with the targets of a primary sanctioning effort but that are outside the jurisdiction of that primary sanctioning effort.43 Such sanctions are an attempt to compel third-party businesses to cease sanctions-busting activities 41 42 43

L. Martin, Coercive Cooperation (Princeton: Princeton University Press, 1992). B.R. Early, Busted Sanctions: Explaining Why u.s. Economic Sanctions Fail, cit., Chapter 4. K. Rodman, Sanctions Beyond Borders (Rowman & Littlefield Publishers, 2001).

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even though they are not legally obligated to do so. The effectiveness of secondary sanctions depends upon the degree to which third-party businesses are vulnerable to having their business relationships with partners in the sanctioning country disrupted. Third-party governments may also step in to intercede on behalf of their businesses when they are targeted with secondary sanctions. This can create a political backlash against sender governments and mobilize third-party governments to protect their constituents’ ability to continuing doing businesses with sanctioned States. When the u.s. Government sought to compel third-party firms into complying with its sanctions against Cuba as part of the “Helms-Burton Act” in 1996, for example, there was a huge political backlash from Canada and members of the eu.44 The tools that governments have to stop sanctions busting conducted by third-party actors outside of their sanctions’ jurisdiction are thus far more limited and difficult to employ than those they can use against parties subject to their sanctions. Even if a sanctioning government succeeds in recruiting the support of a critical third-party government or successfully coerces a s­ anctionsbusting firm to give up those activities, profit-driven businesses in other thirdparty countries can always step in as replacements. Stopping sanctions-busting in one place only creates greater incentives for it to occur elsewhere. In short, third-party sanctions-busting will almost always be an endemic problem. At the very least, though, governments can raise the costs and challenges that sanctioned entities face in circumventing sanctions by effectively imple­ menting sanctions, maximizing the scope of their jurisdiction, and efficiently enforcing them. Only in those cases in which governments are willing to make substantial political investments in convincing third-party governments to join sanctions or tolerate secondary sanctions are robust efforts to prevent third-party sanctions busting likely to succeed. The success that the u.s. Government has achieved over the past half-decade in clamping down on the sanctions-busting taking place on Iran’s behalf is a case in point. For the preceding twentyfive years before that, both domestic and third-party sanctions busting on Iran’s behalf had been rampant.45 Few sanctioning efforts receive the level of political attention and investment of resources that the u.s. Government’s reinvigorated sanctioning effort against Iran has had since 2009. Yet even in the case of the u.s. sanctions against Cuba, which receive a comparable level of effort during the 1960s, sanctions busting still played a major role

44 45

B.R. Early, supra note 42, Chapter 7. Ibid., Chapter 5.

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in contributing to the sanctioning efforts’ ineffectiveness.46 Since governments cannot control how much third-party sanctions busting takes place most of the time, they should instead focus on maximizing their leverage over the factors they can control. 5 Conclusion This chapter has examined the implementation and enforcement challenges that exist to imposing effective economic sanctions. I proposed a conceptual framework that distinguishes between deliberate and unintentional sanctions violations and those that occur within the sanctions’ legal jurisdiction or outside it. Using this framework, I presented a strategy for making sanctioning efforts more effective that had three key elements: improving the implementation of sanctions to minimize unintentional sanctions violations, closing sanctions loopholes and maximizing the scope of their jurisdiction, and investing in the detection and punishment of deliberate, illegal sanctions violations. Adopting this strategy should make it harder for businesses within sanctioned States to deliberately undercut their governments’ sanctions and minimize violations that occur out of ignorance. While this strategy does not fully address the challenges posed by third-party sanctions busting, it can make it costlier and more difficult for target actors to circumvent sanctions. While there are certain factors that influence the success of sanctioning efforts that policymakers’ cannot control, the prescriptive strategies presented in this piece can all be adopted if policymakers are willing and able to invest in adopting them. The conceptual analysis within this piece has a number of broader implications for the study of economic sanctions. Foremost, it highlights that role of policy implementation in determining the effectiveness of sanctioning efforts. Much of the academic research on sanctions focuses on the role played by structural factors in determining whether or not sanctions succeed and neglect to account for the factors associated with the quality of their implementation. Large-n quantitative studies are often poorly equipped to study these facets of sanctions. More carefully conducted case studies, comparative analyses, or game theoretical approaches are thus needed to explore how specific policy implementation choices can influence the effectiveness of sanctioning efforts. Additionally, this study has introduced greater conceptual clarity in understanding what the problems associated with sanctions violations are. By distinguishing 46

Ibid., Chapter 7.

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between deliberate and unintentional violations, this study has illustrated that enhancing the effectiveness of sanctioning efforts is more than just an enforcement problem.47 Sanctions violations can be minimized, at least in part, from more effective policy implementation. Finally, this study has highlighted the value-added of designing sanctions that minimizes the legal channels that businesses can use to undercut sanctioning efforts. This jurisdiction-based approach highlights the fact that sanctioning efforts can grow more effective the wider their scope is and the farther beyond a government’s borders they project.48 Policy-wise, this study suggests that policymakers should invest in both the design and implementation of economic sanctions to enhance their effectiveness. Without effective implementation or with only poorly supported monitoring and enforcement efforts, even the best designed sanctions are apt to fail. Funding the implementation and enforcement of sanctions often tends to be a relatively low priority. Efforts at monitoring and enforcing sanctions can easily be spread too thin to matter if policymakers impose too many sanctions campaigns at once. Governments that limit their involvement to only a small number of sanctioning campaigns will face fewer challenges in implementing and enforcing them. Governments that possess complicated procedures for imposing sanctions or that involve multiple agencies in the administration of sanctions are also at a disadvantage. Such approaches also spread thin the resources devoted to implementing sanctions across multiple agencies. Overhauling entrenched bureaucratic structures and changing foreign policy practices that may be over-reliant on sanctions may not be possible, however. By giving greater attention to the challenges involved in the implementation and enforcement of their sanctions and at least trying not to overtax the resources they invest in imposing sanctions, policymakers can improve the effectiveness of their sanctioning efforts even if they cannot solve all the obstacles to their success.

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See, for example, D.W. Drezner, ‘Bargaining, Enforcement and Multilateral Sanctions: When Is Cooperation Counterproductive?’, cit., pp.  73–102; B.R. Early and R. Spice, ‘Economic Sanctions, International Institutions, and Sanctions Busters: When Does Institutionalized Cooperation Help Sanctioning Efforts?’, cit. Also, see G. Shambaugh, States, Firms, and Power (Albany: suny Press, 1999); K. Rodman, Sanctions Beyond Borders, cit.

chapter 4

Sanctions Imposed by the European Union: Legal and Institutional Aspects Marco Gestri Abstract The eu is making an ever increasing use of sanctions, often acting autonomously from the un Security Council, and is a key player in the area. Even if eu institutions declare that autonomous sanctions must be “in full conformity with inter­national law”, the lawfulness of each measure has to be carefully assessed under inter­national law. eu practice is particularly significant as regards the controversial notion of collective countermeasures vis-à-vis erga omnes violations. In any case, eu sanctions are replicated by a significant number of non-member States. Under eu law, the imposition of sanctions is governed by a complex procedure, straddling the teu and the tfeu. This Chapter discusses the current legal framework concerning the imposition of eu sanctions and their implementation, stressing the crucial role still played by member States in key areas (determination of penalties for sanctions violation, granting of exemptions, enforcement) and explores possible innovations de lege ferenda.

Keywords European Union – sanctions – cfsp – judicial remedies

1

General Overview of the eu Practice in the Field of Sanctions (or ‘Restrictive Measures’)

The European Union (eu) is making an increasing use of the instrument of sanctions or, as they are known in eu jargon, of ‘restrictive measures’, as a form of coercive diplomacy. In particular, recent practice shows a growing inclination of the eu to impose autonomous sanctions, going beyond un measures, and also a certain readiness to impose ‘tough’ measures, having serious e­ conomic impact.1 This may not come as a surprise, if one considers 1 See, in particular, A.W. de Vries, C. Portela and B. Guijarro-Usobiaga, Improving the Effec­ tiveness of Sanctions: A Checklist for the eu, ceps Special Report No. 95, November 2014, p. 1. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_005

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the willingness of the eu to “assert its interest and values on the international scene”.2 As is known, the eu cannot be regarded as a military power, generally lacking the capacity to project military force abroad, yet it is certainly an ‘economic superpower’.3 As a consequence, the threat or the imposition of economic and financial sanctions can be a powerful tool in the hands of the eu in order to exert an influence on the conduct of other actors in the international arena. It is also important to stress that, from a political viewpoint, there exists a general agreement among the member States as to the fact that the eu is much better placed than national governments to impose international sanctions.4 This Chapter is devoted exclusively to eu restrictive measures adopted for political, non-commercial purposes, within the framework of the Common Foreign and Security Policy (cfsp). In effect, eu institutions generally keep a distinction between ‘restrictive measures’ properly so called, adopted within the framework of the cfsp, and other types of actions designed for influencing the conduct of other actors. In particular, the restrictive measures discussed here do not include the measures adopted in the context of commercial disputes nor the actions decided under a legal basis outside the cfsp, such as those consisting of the suspension or termination of bilateral agreements, of unilateral trade concessions or of cooperation with third countries.5

2 Art. 32 of the Treaty on European Union. 3 C.E. Golumbic, R.S. Ruff iii, ‘Who Do I Call For An eu Sanctions Exemption?: Why The eu Economic Sanctions Regime Should Centralize Licensing’, 44 Georgetown Journal of International Law (2013), p. 1007, at p. 1052 (An eu sanctions regime “can be fairly measured against that of the us in terms of its impact”); C. Eckes, ‘eu Restrictive Measures Against Natural and Legal Persons: From Counterterrorist to Third Country Sanctions’, 51 Common Market Law Review (2014), p. 869, at 872 (“The eu possesses unmatched economic power: it is the biggest economy and the greatest trading power in the world”); L. Leenders, ‘eu Sanctions: A Relevant Foreign Policy Tool?’, College of Europe, Bruges, eu Diplomacy Papers, 3/2014, p. 4. 4 See, in particular, the Report of the uk Government ‘Review of the Balance of Competences between the United Kingdom and the European Union. Foreign Policy’, available at https:// www.gov.uk/government/consultations/foreign-policy-report-review-of-the-balance-of -competences. As noted by C. Eckes, supra note 3, p. 872, the report is “throughout very positive about the eu’s role in the area of sanctions”. 5 Needless to say, these actions may, and often are, linked to, or combined with, the restrictive measures decided within the cfsp. See ‘Introduction’ in I. Cameron (ed.), eu Sanctions: Law and Policy Issues Concerning Restrictive Measures (Cambridge-Antwerp – Portland: Inter­ sentia, 2013), p. 39.

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In 2004, the eu Council outlined a general policy framework for the adoption of sanctions, by issuing the ‘Basic Principles on the Use of Restrictive Measures (Sanctions)’.6 That document expressed in clear terms the willingness of the eu to use sanctions as a key instrument of its foreign policy and, for the first time, designed a strategy for the use of sanctions.7 Another significant document is the ‘Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the eu Common Foreign and Security Policy’, the most recent version of which was adopted by the Council on 15 June 2012.8 This more articulated document outlines a number of principles in order to guide the eu institutions and member States in the for­ mulation and implementation of sanctions and presents standard wording and common definitions that may be used in the legal instruments imposing or implementing restrictive measures. The first version of the Guidelines suggested that a specific Council body be dedicated to the monitoring and follow up of restrictive measures. As a consequence, on 26 February 2004 coreper mandated the Foreign Relations Counsellors Working Party – a preparatory body of the Council consisting of officials from member States and dealing with legal, financial and institutional issues of the cfsp – to carry out the monitoring and evaluation of eu restrictive measures with periodic meetings of a specific Sanctions formation (relex/Sanctions), reinforced as necessary with experts from capitals.9 The mandate for relex/Sanctions includes the exchange of information and experiences and the development of best practices among member States in the implementation of restrictive measures. In accordance with that mandate, in November 2005 relex/Sanctions adopted a set of ‘eu Best Practices for the Effective Implementation of Restrictive Measures’.10 Best Practices are “non-exhaustive recommendations of a general nature for effective implementation of restrictive measures in accordance with applicable Union law and national legislation”,11 particularly directed at national authorities. The Best Practices are constantly reviewed and adapted: the latest version of the document 6 7 8

9 10 11

Council document 10198/1/04 of 7 June 2014. See C. Portela, European Union Sanctions and Foreign Policy: When and Why do they Work? (London – New York: Routledge, 2010), p. 28; C.E. Golumbic, R.S. Ruff iii, op. cit., p. 1024 ff. Council document 11205/12. See also the ‘New elements’ included in the Guidelines by doc. 9068/13 of 30 April 2013. A first version of the Guidelines was adopted by the Council on 8 December 2003 (doc. 15579/03). Updated versions were agreed on 2 December 2005 (doc. 15114/05) and on 15 December 2009 (doc. 17464/09). Council document 5603/04, ‘Establishment of a Sanctions Formation of the Foreign Relations Counsellors Working Party (relex/Sanctions)’, 22 January 2004. Council document 1511/05 of 2 December 2005. Best Practices, cit., para. 3.

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was adopted in June 2015.12 As is made clear by their name, and reiterated in the document, the Best Practices are not legally binding.13 At the time of writing, there are more than 30 regimes of eu sanctions in force.14 Many of them implement binding Resolutions adopted by the un sc under Chapter vii of the Charter (e.g. against Al Qaeda). In effect, the Basic Principles stress the importance of the use of sanctions as an instrument “to maintain and restore international peace and security in accordance with the principles of the un Charter” and the willingness of the eu Council to support the un and fulfil the obligations stemming from the un Charter.15 It may also happen that the eu, in implementing un sc sanctions, decides to add further restrictive measures (e.g. against Iran).16 At the same time, the eu (formerly the ec) has a long experience in adopting sanctions on an autonomous basis, independently from a un sc Resolution.17 Currently, there are a number of important examples of these autonomous sanctions (e.g. Belarus; Moldova; Russian Federation; Syria). According to the 2004 Basic Principles, the Council will impose autonomous sanctions, if necessary, “in support of efforts to fight terrorism and the proliferation of weapons of mass destruction and as a restrictive measure to uphold respect for human rights, democracy, the rule of law and good governance”.18 12 13 14 15

16 17

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Council document 10254/15 of 24 June 2015. For a first comment, see M. Lester, ‘eu Updates its Sanctions Best Practices Document’, 16 April 2015 European Sanctions blog. Best Practices, cit., para. 3. European Commission, Restrictive Measures in force (Art. 215 tfeu), updated 30.9.2015 (previous update: 19.3.2015). Basic Principles, cit., para. 1. See also eu Guidelines, para. 3, “in the case of measures implementing un sc resolutions, the eu legal instruments will need to adhere to those Resolutions”. Ibid.: “it is understood that the eu may decide to apply measures that are more restrictive”. That practice was inaugurated in the 1980s, with the adoption of sanctions against the Soviet Union following the invasion of Afghanistan (1980), against Poland for the imposition of martial law (1982) and vis-à-vis Argentina in the wake of the invasion of the Falkland Islands (1982). See A. de Guttry, ‘Le contromisure adottate nei confronti dell’Argentina da parte delle Comunità europee e dei terzi Stati ed il problema della loro liceità internazionale’ in N. Ronzitti (ed.), La questione delle Falkland/Malvinas nel diritto internazionale (Milano: Giuffrè, 1984), p. 343  ff.; L.A. Sicilianos, ‘Countermeasures in response to Grave Violations of Obligations Owed to the International Community’ in J. Crawford, A. Pellet and S. Olleson (eds.), The Law of International Responsibility (Oxford: Oxford University Press, 2010), p. 1137, at 1141; C. Beaucillon, Les mesures restrictives de l’Union européenne (Bruxelles: Bruylant, 2014), p. 14. Para. 3.

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Needless to say, in the catalogue of eu sanctions one may find both traditional ‘comprehensive’ or ‘blunt’ sanctions, directed at States, and ‘targeted’ or ‘smart’ sanctions, aimed at single individuals or entities.19 Another distinction that has been made in the literature is between the sanctions that are geographically defined, targeting the political regimes of specific third States and their supporters, and the counterterrorist sanctions, which do not apply to a particular geographical region.20 From a general point of view, the eu practice on sanctions may give rise to a number of problems. First of all, in the case of sanctions adopted motu proprio by the eu, that is, in the absence of a un sc Resolution, a problem as to their compatibility with international law may arise. In this regard, the Basic Principles adopted by the eu Council in 2004 seem to move from a position of ‘multilateralism’ and the assertion of the overarching principle of full respect for international law, providing that autonomous eu sanctions must be in “full conformity” with international law obligations (para. 3). In effect, under the Treaty on European Union (teu), “in its relations with the wider world, the Union…shall contribute to…the strict observance and the development of international law, including respect for the principles of the United Nations Charter” (Article 3, para. 5). In practice, from a legal point of view, eu sanctions may fall into different categories. Firstly, the eu may adopt measures that, even if designed to injure the target State or person, do not conflict with any international obligation. This is particularly the case when the eu decides to terminate or suspend benefits that had been unilaterally granted to third countries (development aid, technical assistance, cultural cooperation). These measures, qualified as ‘retorsion’ under international law, do not raise any issues. Another example is offered by the introduction of visa requirements for the entry into the eu of nationals of a given State or by the adoption of visa bans vis-à-vis certain individuals. In effect, each State is free to regulate the entry into its territory of foreign nationals, at least when there exists no international agreement regulating the movement of persons between the States involved. A different situation arises when the sanctions adopted by the eu, if considered per se, do conflict with obligations deriving from customary or treaty law. In this case, the measure adopted has to find a legal justification under the law of the international responsibility of States and international organizations (notably, pursuant to the rules on ‘countermeasures’) or under the law of t­ reaties 19

20

On that distinction, see M. Gestri, ‘Legal Remedies against Security Council Targeted Sanctions: De Lege Lata and De Lege Ferenda Options for Enhancing the Protection of the Individual’, xviii Italian Yearbook of International Law (2008), p. 25, at 25–26. C. Eckes, supra note 3, p. 869.

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(notably, according to the principle inadimplenti non est adimplendum). In this connection, the practice of eu autonomous sanctions, that is of measures adopted without a un sc authorization, gives rise to a number of delicate legal questions. More particularly, it has to be noted that in many cases in which the eu has adopted sanctions vis-à-vis a target State accused of a breach of international law, the eu could not be regarded as being individually injured by the breach in question.21 As a consequence, the lawfulness of the measures adopted by the eu could be established under international law exclusively on the basis of the notion according to which States (and other entities), even if not directly affected, may take countermeasures in the presence of violations of erga omnes obligations (or of “obligations owed to the international community as a whole”). This notion however is not generally accepted in the doctrine of international law.22 As is known, in its Draft Articles on the Res­ponsibility of States,23 as well as in those concerning the responsibility of international organisations,24 the International Law Commission (ilc) has left ‘without prejudice’ the question concerning the right of non-injured States or international organisations to take countermeasures in the general interest of the international community. According to the ilc, in subiecta materia “State practice is sparse and involves a limited number of States”.25 On the other hand, one has to note that a great majority of the cases quoted by the ilc, in the Commentaries to both texts of Draft Articles, concern the European Community or the eu, which, as a consequence, can be regarded as a pioneer in the area in question.26 21 22

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24 25 26

For a survey of the practice, see C. Beaucillon, op. cit., p. 301 ff. In favour of the admissibility of countermeasures, by non-injured States, with respect to erga omnes obligations, see, e.g., C.J. Tams, Enforcing Obligations Erga Omnes in International Law (Cambridge: Cambridge University Press, 2010); P. Picone, Comunità internazionale e obblighi erga omnes (3rd ed., Naples: Jovene, 2013). For a restrictive view, see B. Conforti, Diritto internazionale (10th ed., Naples: Editoriale Scientifica, 2014), p. 426. For a general overview, see also J. Frowein, ‘Reactions by Not Directly Affected States to Breaches of Public International Law’, 248 Recueil des Cours (1994), p. 345; G. Gaja, ‘The Protection of General Interests in the International Community’, 364 Recueil des Cours (2011), p. 128. Art. 54, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, 2001, Yearbook of the International Law Commission (2001), Vol. ii (Part Two), p. 137. Art. 57, Draft Articles on the Responsibility of International Organizations, with commentaries, 2011, Yearbook of the International Law Commission (2011), Vol. ii (Part Two). Yearbook of the International Law Commission (2001), Vol. ii (Part Two), p. 139, para 6. See the Commentary to Art. 49 of the Draft Articles on the Responsibility of International Organisations, op. cit.: “The most significant practice appears to be that of the European

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One can also recall the thesis according to which, when the un sc exerts its powers under Article 41 of the Charter and adopts sanctions against a given State, individual States or international organizations lose any right to adopt further sanctions in respect to the said State, even under the doctrine of collective countermeasures vis-à-vis violations of erga omnes rules.27 As far as eu law is concerned, however, one may observe that the European Court of Justice, in Kala Naft v. Council seems to have ignored such an argument, asserting that the provisions of the Treaties establishing the competence of the Council to impose sanctions (Article 29 teu; Article 215 of the Treaty on the Functioning of the European Union, tfeu) per se give the Council the power to adopt “independent restrictive measures, distinct form the measures specifically recommended by the Security Council”.28 When eu autonomous sanctions are adopted, eu institutions work in order “to enlist the support of the widest possible range of partners”,29 for, as stated in the eu Sanctions Guidelines, “the effectiveness of restrictive measures is directly related to the adoption of similar measures by third countries”.30 In effect, the practice shows that the eu is often successful in aligning the conduct of a significant number of third States with that of the eu. More particularly, the States belonging to the following categories generally tend to align with eu measures: candidate countries (Albania, the fyrm, Montenegro and, less consistently, Serbia and Turkey), potential candidates (Bosnia and Her­zegovina and Kosovo) and members of the European Economic Area, EEA (Iceland, Liechtenstein and Norway). Of particular importance is the case of Switzerland, that since 1998 has replicated almost all the sanctions adopted by the eu, its

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29 30

Union, which has often stated that non-members committed breaches of obligations which appear to be owed to the international community as a whole”. See L.A. Sicilianos, op. cit., p. 1142; U. Villani, ‘The Security Council’s Authorization of Enforcement Action by Regional Organizations’, 6 Max Planck Yearbook of United Nations Law (2002), pp. 538–540; P.E. Dupont, ‘Countermeasures and Collective Security: The Case of the eu Sanctions Against Iran’, 17 Journal of Conflict & Security Law (2012), pp. 301–336. eu Court of Justice, Council v. Manufacturing Support & Procurement Kala Naft Co., Tehran, Case C-348/12 P, ecli:eu:C:2013:776, para. 108. See P.E. Dupont, ‘The ecj and (Mis)interpretation of Security Council Resolutions: The Case of Sanctions Against Iran’, ejil: Talk! (2013), available at http://www.ejiltalk.org/the-ecj-and-misinterpretation-of-security -council-resolutions-the-case-of-sanctions-against-iran/. eu Basic Principles, cit., para. 4. eu Guidelines, cit., Annex 1, para. 21: “in principle, therefore it is preferable for sanctions to be adopted in the framework of the un. Where this is not possible, the aim should be to bring as much as possible of the international community to exert pressure on the targeted country”.

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main trading partner;31 in any case, the decision to align with an eu measure is adopted by the federal Council on a case-by case basis, after a careful consideration of all the interests involved.32 Also some of the partners of the European Neighbourhood Policy have shown a certain propensity to conform to eu sanctions, notably Moldova, Georgia, Ukraine and Armenia. In general, the alignment of third Countries with a given eu sanctions regime is noted by apposite Declarations issued by the High Representative of the Union for Foreign Affairs and Security Policy (hr).33 In light of that practice, one can conclude that the eu sanctions policy exerts, from a factual point of view, a relevant force of attraction in respect of third States. From the legal point of view, in general third States are completely free to adhere, or not to adhere, to eu measures (which are for them res inter alios acta). However, the case of candidate countries deserves particular attention. In effect, they are generally expected by eu institutions to conform to sanctions adopted at the European level.34 A problem has arisen in respect of the 31

Under Article 1 (1) of the Federal Act on the Implementation of International Sanctions (Embargo Act, EmbA) of 22 March 2002: “The Confederation may enact compulsory measures in order to implement sanctions that have been ordered by the United Nations Organisation, by the Organisation for Security and Cooperation in Europe or by Switzerland’s most significant trading partners and which serve to secure compliance with international law, and in particular the respect of human rights” (https://www .admin.ch/opc/en/classified-compilation/20000358/index.html). 32 See, e.g., Conseil fédéral, Rapport sur la politique économique extérieure 2012, 10 April 2013: “depuis 1998, la Suisse a repris à son compte pratiquement toutes les sanctions décidées par l’ue, son principal partenaire commercial. La décision de se joindre à une mesure européenne particulière – et dans quelle mesure – est examinée par le Conseil fédéral au cas par cas, et n’est prise qu’après une pesée générale des intérêts. Rester à l’écart comporte notamment le risque que les restrictions commerciales et financières décidées par l’ue soient contournées en passant par la Suisse”. 33 For instance, on 10 April 2015, the hr issued a Declaration noting that the following third countries had expressly committed themselves to conform to the Council Decision 2015/383/CFSP concerning sanctions against Syria: the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Albania (candidate countries), Iceland, Liechtenstein and Norway (members of the eea) as well as Ukraine, Moldova and Georgia: ‘Declaration by the High Representative on behalf of the European Union on the alignment of certain third countries with Council Implementing Decision 2015/383/CFSP implementing Council Decision 2013/255/CFSP concerning restrictive measures against Syria’, Press Release 169/15. 34 See eu Guidelines, cit., Annex i, para. 22, “candidate countries should be systematically invited to align themselves with the measures imposed by the eu”. See also European Parliament recommendation to the Council of 2 February 2012 on a consistent policy towards regimes against which the eu applies restrictive measures, when their leaders

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unwillingness of Serbia and Turkey to align with the eu sanctions against Russia. The eu Commissioner for Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn, has recently issued apparently contradictory declarations on the issue, stating, on the one hand, that Serbia is under a legal commitment to gradually align its foreign policy to that of the eu, in particular in respect of difficult issues such as sanctions on Russia; yet, on the other hand, declaring that the eu is not asking “Serbia to impose sanctions against Russia”.35 The European Parliament, in a Resolution adopted on 11 March 2015, called on Serbia “to make stronger efforts in aligning its foreign and security policy to that of the eu, including policy on Russia”, regretting that “Serbia did not align itself, when invited, with the Council decisions introducing restrictive measures against Russia, keeping in mind, however, the traditionally strong economic, social and cultural ties that exist between the two countries”.36 The issue has also been tackled by a Parliamentary question to the hr. In answering that question on 20 February 2015, hr Mogherini, on behalf of the Commission, stated that: According to the negotiating framework for the accession negotiations with Serbia, the eu expects from Serbia, as from any candidate country, to progressively align with the eu acquis in the period up to accession. The acquis includes the eu Common Foreign and Security Policy and the related declarations, decisions and statements. Serbia’s alignment with the eu restrictive measures is being dealt with under Chapter 31 ‘Foreign, Security and Defence policy’. The screening of this chapter started in July 2014. hr Mogherini and Commissioner Hahn have underlined the importance of Serbia’s alignment with the eu restrictive measures in their contacts with Serbian interlocutors. Along with a range of other political issues, the subject of alignment will continue to be addressed with the

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exercise their personal and commercial interests within eu borders (2011/2187(INI)): the Parliament recommends to the Council “i): to ensure that countries belonging to the European Economic Area and applicant countries for accession to the European Union also apply the restrictive measures and exchange relevant information with the Union”. See, also, P. Kaukoranta, ‘The National Implementation of ec Economic Sanctions’ in M.  Koskenniemi (ed.), International Law Aspects of the European Union (The Hague: Nijhofff, 1998), p. 99, esp. at p. 100. Available at http://www.b92.net/eng/news/politics.php?yyyy=2014&mm=11&dd=19&nav _id=92288. European Parliament Resolution of 11 March 2015 on the 2014 Progress Report on Serbia (2014/2949(RSP)).

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Serbian authorities, as was the case at the Stabilisation and Association Council on 17 December.37 In sum, what is the legal position of candidate countries? From the viewpoint of the eu, acceptance of the eu acquis is a pre-condition for accession. As a consequence, there is no question that a protracted failure, on the part of a candidate country, to align itself with eu restrictive measures could block the accession process. Under public international law, on the other hand, one could at most assert, notably in respect of candidate countries having started accession negotiations (this is the case of both Serbia and Turkey) and in the light of the principle of good faith, a general obligation not to deliberately undermine the eu cfsp, for instance by trying to take advantage of the situation determined by the imposition of restrictive measures vis-à-vis a third State.38 Another issue of general interest emerging from the eu practice is that concerning the jurisdictional scope of application of sanctions. The eu Sanction Guidelines expressly condemn the extra-territorial application of national legislations imposing sanctions, notably in respect of natural and legal persons under the jurisdiction of eu member States, and declare that the eu “will refrain from adopting legislative instruments having extra-territorial application in breach of international law”.39 However, the jurisdictional scope of eu sanctions is rather broad. According to the standard clause on jurisdiction envisaged by the eu Sanctions Guidelines, restrictive measures apply (a) within the territory of the eu, including its airspace; (b) on board any aircraft or any vessel under the jurisdiction of a member State, (c) to nationals of any member State (wherever located), (d) to any legal person, entity or body incorporated or constituted under the law of a member State (wherever located) (e) to any legal person, entity or body with respect to business done in whole or in part within the eu.40 In any case, eu sanctions in contrast to some us measures, do not foresee more aggressive forms of extra-territorial application, such as provisions covering the conduct of foreign subsidiaries of eu legal 37

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Question for written answer to the Commission (Vice-President/High Representative), Rule 130, Andrej Plenković (ppe), Serbia’s failure to support restrictive measures against Russia. On the extension of the obligation to refrain from acts which would defeat the object and purpose of an eventual agreement to the negotiating phase, see, e.g., M. Mbengue, ‘Article 18’ in P. Klein and O. Corten (eds.), The Vienna Convention on the Law of Treaties: A Commentary (Oxford: Oxford University Press, 2011), Vol. 1, p. 398, para. 2. Para. 52. Para. 88.

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persons or clauses controlling the re-export from third countries of eu-origin goods.41 2 The eu Decision-Making Process for the Imposition of Sanctions The adoption of ‘restrictive measures’ in the eu legal order is governed by a complex procedure, which often straddles the teu and the tfeu. The legal picture is complicated by the fact that any measure adopted by the eu must, under eu law, have an appropriate legal basis, in accordance with the principle of attribution of powers, chosen from the variety of possible different legal bases that may come into consideration in a given case. The imposition of restrictive measures for political purposes in principle falls under the cfsp, and requires a Decision of the Council, adopted in particular under Article 29 teu42 and in accordance with the procedure envisaged by Articles 30 and 31 teu.43 The measures must be consistent with the objectives of the cfsp, which are outlined in Article 21 teu. Obviously, the basic political decisions as to the adoption, duration or termination of restrictive measures are generally taken by the European Council.44 41

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It has to be added that eu sanctions lists tend in any case to influence the conduct of leading non-eu companies based in third States: in the financial sector, a survey carried out in 2009 showed that 36% of non-eu companies use the eu list explicitly and a further 31% employ some form of aggregate, including eu designations: Deloitte Financial Advisory Services llp, Facing the Sanctions Challenge in Financial Services: A Global Sanctions Compliance Study, 2009, p. 18. In the practice of the Council, the decisions imposing sanctions are adopted on the basis of Art. 29 teu, providing for decisions on ‘Union positions’, rather than by virtue of Art. 28 teu, envisaging decisions on ‘Union actions’. As noted in the legal literature, the distinction between the two categories of decisions is in any case ‘unclear in either theory or practice’: see P. Eeckhout, eu External Relations Law (2nd ed., Oxford: Oxford University Press, 2011), p. 473. Before the entry into force of the Maastricht Treaty, a practice developed as to the adoption of ‘informal sanctions’ against certain States or entities (Cuba, Guatemala, Pakistan, the Palestinian Authority, Peru, Russia, Serbia and Turkey). They were simply envisaged by the ‘conclusions’ of the European Council or the Council, without being formalized in any further decision. A remnant of this practice is the embargo on arms against China, imposed by the Declaration of the Madrid European Council of 27 June 1989. See G. Grieger, ‘Sanctions as an eu foreign policy instrument’ (Library Briefing, Library of the European Parliament, 22 May 2013), p. 3. Under Article 26 (1) teu, the European Council has to identify the Union’s strategic interests, determine the objectives of and define general guidelines for the cfsp. For instance,

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One may observe that in Kala Naft v. Council the eu General Court noted that cfsp Decisions, adopted by the Council in order to impose sanctions, have to comply “with the first subparagraph of Art. 26 (2) teu, according to which the Council is deemed to act on the basis of the general guidelines and strategic lines defined by the European Council”.45 On the other hand, the Court of Justice, in the appeal judgment, remarked that a ‘Declaration on Iran’, adopted by the European Council on 17 June 2010, even if it must be taken into consideration in the interpretation of the Decision of the Council imposing the sanctions, does not constitute the legal basis of such a Decision, which can be autonomously founded on Article 29 teu.46 The proposal for the adoption of the Decision imposing the sanctions may come from any member State or from the hr, who can act with the support of the eu Commission (in this case, the hr and the Commission will introduce a joint proposal). When the eu implements sanctions decided by the un sc, it is crucial for the eu to adopt the necessary legal instruments with minimal time delay. In this connection, eu member States sitting in the sc (in primis, the two permanent members) may (rectius, should)47 play a central role, notably in ensuring immediate information concerning the discussion and prospective adoption of new un sanctions (the Guidelines stress the importance of “prompt exchange of information regarding draft Security Council resolutions”).48 With respect to eu autonomous sanctions, the Guidelines articulate in a very detailed manner the different phases of the decision-making process leading to the introduction of a sanctions proposal before the Council.49 A crucial

45 46 47

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in respect of the restrictive measures adopted against Russia, see European Council Conclusions, 19–20 March 2015 (euco 11/15), para. 10 and the Council Decision (cfsp) 2015/971 of 22 June 2015 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, oj L 157, 23 June 2015, p. 50. eu General Court, Manufacturing Support & Procurement Kala Naft v. Council, Case T-509/10, 25 April 2012, para. 54, ecli:eu:T:2012:201. eu Court of Justice, Case C 348/12 P, cit., para. 108. See Article 34 (2) teu, under which “Member States which are also members of the United Nations Security Council will concert and keep the other Member States and the High Representative fully informed. Member States which are members of the Security Council will, in the execution of their functions, defend the positions and the interests of the Union, without prejudice to their responsibilities under the provisions of the United Nations Charter”. eu Guidelines, cit., para. 41. Proposals for restrictive measures are submitted by the member States or the European External Action Service (eeas). The political aspects and broader parameters of the proposals are first discussed in the relevant regional working party of the Council, which is

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role in the preparation and review of an autonomous sanctions regime is played by the European External Action Service (eeas).50 As an instrument of the cfsp, the adoption of a Decision imposing sanctions generally requires unanimity from eu member States in the Council. Some derogations to this rule are envisaged by Article 31 (2) teu. In particular, the Council may decide by qualified majority with respect to situations in which the ministers act on the basis of a previous Decision of the European Council relating to the Union’s strategic interests and objectives or upon a proposal presented by the hr at the specific request of the European Council (in both cases one may speak of a sort of prior authorization to qualified majority voting by the European Council). The Council may also adopt by qualified majority, under Article 31(2) teu, a Decision “implementing a Decision defining a Union action or position”.51 One has also to take into account the rules on abstention. On the one hand, according to the general rule – Article 238 (4) tfeu – the abstention of a member State does not prevent the adoption of the act. On the other hand, Article 31 (1) teu envisages the mechanism known as ‘constructive abstention’. In particular, a member State may qualify its abstention by making a formal declaration: in that case it “shall not be obliged to apply the Decision, but shall accept that the Decision commits the Union”. Additionally, in “a spirit of mutual solidarity”, the abstaining member State “shall refrain from any action likely to conflict with or impede Union action based on that Decision, and the other Member States shall respect its position”. In other words, this instrument for flexibility allows a member State to opt out of a certain Decision without blocking

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chaired by the eeas and assisted by eeas country desk officers and sanctions officers and experts from the Commission and the Council Legal Service. The eeas Heads of Missions in the countries concerned are generally invited to provide their advice on the proposals. Where appropriate, the Political and Security Committee will also discuss the proposal and provide political orientations. When an agreement has been reached in the regional working party on the political aspects of the proposal, a technical working group (the Council’s Foreign Relations Counsellors working group, relex) will discuss all the legal, technical and horizontal aspects of the proposed measures. In this working group both the eeas and the Commission are represented to provide advice on horizontal and technical aspects of the measures under consideration. After having been cleared by the regional working party and relex, the proposal will be submitted to coreper and to the Council. See also C. Eckes, supra note 3, p. 884. See, for instance, the Council Implementing Decision 2011/156/CFSP of 10 March 2011 implementing Decision 2011/137/CFSP concerning restrictive measures in view of the situation in Libya, oj L 64, 11 March 2011, p. 29. See also R. Adam, A. Tizzano, Manuale di diritto dell’Unione europea (Torino, Giappichelli, 2014), pp. 827–828.

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its adoption.52 In the doctrine, the utilization of the mechanism has recently been invoked in order to allow the Council to adopt more effective sanctions against the Russian Federation in the wake of the Ukrainian crisis.53 From a different viewpoint, one could consider that the ‘constructive abstention’ procedure would be useful also in order to solve possible problems deriving from the more prudent attitude of the new Greek Government in respect of the imposition of sanctions against Russia.54 However, on the one hand, the constructive abstention mechanism has not been very successful in the cfsp practice;55 on the other hand, its application in the field of sanctions appears to be particularly problematic. Considering that in the field of the cfsp the adoption of legislative acts is excluded (Article 31 (1) teu), the Council Decision on sanctions, in order to be applicable vis-à-vis natural and legal persons, has to be implemented by further acts. In particular, the measures foreseen in the cfsp Decision of the Council may be implemented along two different tracks, depending on the type of sanctions envisaged and on the attribution of competences between the eu and member States. First, some measures are implemented directly by the member States. This is in particular the case when the eu has no competence to adopt the operative measures envisaged by the cfsp Decision. In any case, since cfsp Decisions ex Article 29 teu are binding on the member States,56 they are under a legal obligation to act in conformity with the act. Typically, arms embargoes and travel bans, established by a cfsp Decision, are directly implemented by the member States. For arms embargoes this is a consequence of Article 346 tfeu.57 The embargo is therefore implemented by the national 52 53 54

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Unless one-third of the members, representing one-third of the population, abstain and qualify their abstention (Article 31 (1) teu). S. Blockmans, ‘Ukraine, Russia and the need for more flexibility in eu foreign policymaking’, ceps Policy Brief No. 320, 25 July 2014. On the position of the Tsipras government, see for instance S. Walker, ‘Alexis Tsipras in Moscow asks Europe to end sanctions against Russia’, The Guardian (8 April 2015), available at http://www.theguardian.com/world/2015/apr/08/alexis-tsipras-in-moscow-asks -europe-to-end-sanctions-against-russia. See P. Eeckhout, supra note 43, p. 488, according to whom the mechanism has never been used. According to Article 29 teu, “Member States shall ensure that their national policies conform to the Union’s positions”. On the other hand, very often the embargo also covers dual-use items and the provision of services related to military technology. These aspects generally have to be covered by an eu Regulation, adopted under Article 215 tfeu (see infra).

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laws or regulations of each member State.58 Needless to say, uniformity is required as to the application of the arms embargo by the member States. In effect, as a rule, that is unless otherwise specified, arms embargoes will cover all goods and technology included in the Common Military List of the Union.59 One of the favourite eu restrictive measures is the restriction on the admission to its territory of specifically listed third country nationals. The travel ban may imply the denial of a visa, if the State of nationality is included among those for which eu Regulation No. 539/2001 requires a visa,60 or the nonadmission of the person in question at a point of entry into eu territory. Both measures will be implemented by national authorities, for the responsibility of issuing visas and of exerting border control is still in the hands of national Governments.61 As a recent example of a travel ban, one may refer to the Decision 2010/573/CFSP concerning restrictive measures against the leadership of the Transnistrian region of the Republic of Moldova, which has imposed a travel ban on a list of people “responsible for the campaign of intimidation and closure against Latin-script Moldovan schools in the Transnistrian region of the Republic of Moldova”.62 In a second range of hypotheses, the imposition of the sanctions foreseen in the cfsp Decision requires further eu legislation under the tfeu. This is the case of measures restricting trade or financial relations with a State, which generally fall under the eu Commercial policy,63 and of measures such as the freezing of funds or financial assets of natural or legal persons, which affect the movement of capital and the functioning of the internal market. In practice, 58 59

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I. Cameron, supra note 5, p. 9. Common Military List of the European Union (adopted by the Council on 9 February 2015) (equipment covered by Council Common Position 2008/944/CFSP defining common rules governing the control of exports of military technology and equipment) (updating and replacing the Common Military List of the European Union adopted by the Council on 17 March 2014), oj 2015 C129, 21 April 2015, p. 1. See the Council Regulation (ec) No. 539/2001 of 15 March 2001 listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement (oj L 81, 21 March 2001, p. 1) and successive amendments. In some cases, there is no need for any additional normative measure, and the travel restriction is implemented simply by materially denying access to the concerned individual. Council Decision 2010/573/CFSP of 27 September 2010 concerning restrictive measures against the leadership of the Transnistrian region of the Republic of Moldova (oj L 253, 28 September 2010, p. 54). eu Court of Justice, Centro-Com, Case 124/95, 14 January 1997, ECLI:EU:C:1997:8.

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the Council generally indicates in the cfsp instrument that “[f]urther action by the Union is needed in order to implement certain measures”.64 This enables the hr and the Commission to propose a Regulation implementing the measures falling within the remit of the Union. Since the Lisbon Treaty, the legal basis for such legislation is offered by Article 215 tfeu.65 The first paragraph deals with sanctions directed at States while the second has introduced a new legal basis in respect of restrictive measures against natural or legal persons and groups or non-States entities. Before Lisbon, the imposition of targeted sanctions relied on a more precarious legal basis, deriving from the joint application of ex Articles 301, 60 and the flexibility clause (Article 308 of the Treaty establishing the European Community). According to the first paragraph of Article 215, where a cfsp decision provides for the “interruption or reduction…of economic and financial relations” with one or more countries, the Council shall adopt the “necessary measures”, acting by a qualified majority on a joint proposal from the hr and the

64 See eu Guidelines, cit., para. 49. “Where precision is needed to ensure that all measures are implemented in time, the cfsp instrument should indicate expressly how each measure or part of measure will be implemented” (ibid.). See, for instance, Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine, cit., para. 13. 65 A second legal basis for the imposition of sanctions aiming at preventing and combating terrorism and related activities is provided by Article 75 tfeu. Under this provision: “Where necessary to achieve the objectives set out in Article 67, as regards preventing and combating terrorism and related activities, the Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall define a framework for administrative measures with regard to capital movements and payments, such as the freezing of funds, financial assets or economic gains belonging to, or owned or held by, natural or legal persons, groups or non-State entities”. However, this provision has been interpreted by the Court of Justice as referring exclusively to measures adopted in order to combat ‘internal’ terrorism, that is against terrorist or terrorist groups posing a threat to public security in the member States (or within the eu); on the other hand, when the threat relates primarily to one or more third States or to the international community in general, the appropriate legal basis would be represented by Article 215 tfeu: Court of Justice, European Parliament v. Council, Case C-130/10, 19 July 2012, ecli:eu:C:2012:472. In consideration of the scope of this volume, Article 75 tfeu is not discussed here. In the legal doctrine, see I. Cameron, supra note 5, p. 35 ff.; C. Eckes, supra note 3; P. Van Elsuwege, ‘The Potential for Inter-Institutional Conflicts before the Court of Justice: Impact of the Lisbon Treaty’ in M. Cremona, A. Thies (eds.), The European Court of Justice and External Relations Law: Constitutional Challenges (Oxford: Hart Publishing, 2014), p. 120.

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Commission.66 The same procedure is envisaged by the second paragraph for the adoption of targeted sanctions. It is to be noted that under Article 215 tfeu the European Parliament has a very marginal role in respect of the adoption of sanctions. Formally, the Parliament does not take any active part in the procedure for the adoption of the sanctions and has only to be informed once the measures have been adopted. The exclusion of the European Parliament from the sanctions procedure may raise perplexities: in a field involving the adoption of acts often directly impinging upon the human rights of individuals, a full realization of the democratic principles would have probably required a direct involvement of the ep in the decision-making. However, as remarked by the European Court of Justice in European Parliament v. Council, the limited role of the Parliament under Article 215 tfeu is “the result of the choice made by the framers of the Treaty of Lisbon”; on the other hand, the Court stresses that “the duty to respect fundamental rights is imposed, in accordance with Art. 51(1) of the Charter of Fundamental Rights of the European Union, on all the institutions and bodies of the Union”,67 that is, also on the Council. In practice, the Parliament has requested on many occasions to be involved in all the stages of the sanctions process, and in particular in the decisionmaking process leading to sanctions, the selection of the measures most appropriate to the situation, the evaluation of their implementation and in the lifting of the sanction.68 In a number of cases, the Parliament has also expressed its political views on the merits of the eu sanctions policy, inviting the Council to adopt sanctions vis-à-vis certain States69 or accusing the eu of ‘double-­ standards’ in the imposition of sanctions.70

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Legally, the Regulation is based upon the cfsp Decision, and should be adopted after it. In practice, the proposals for the cfsp Decision and the Regulation tend to be drafted and discussed together, in order to allow the Council to adopt them simultaneously. See C.E. Golumbic, R.S. Ruff iii, supra note 3, p. 1040. 67 eu Court of Justice, Case C-130/10, cit., paras. 82–83. 68 European Parliament Resolution of 4 September 2008 on the evaluation of eu sanctions as part of the eu’s actions and policies in the area of human rights (2008/2031(ini)). 69 See, e.g., European Parliament Resolution of 17 January 2013 on the human rights situation in Bahrain (2013/2513(rsp)). 70 See, e.g., European Parliament, Recommendation to the Council of 2 February 2012 on a consistent policy towards regimes against which the eu applies restrictive measures, when their leaders exercise their personal and commercial interests within eu borders (2011/2187(INI)) available at http://www.europarl.europa.eu/sides/getDoc.do?type=TA& language=EN&reference=P7-TA-2012-0018.

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Article 215 tfeu provides for the adoption of ‘the necessary measures’. When that formula is used in the Treaty, the institutions may have recourse to all the types of legal acts envisaged by Article 288 tfeu (regulations, directives, decisions, recommendations and opinions). However the instrument of eu legislation generally used in this field is the ‘Regulation’. Only Regulations may in effect guarantee the necessary uniformity in the application of the restrictive measures, in view of the fact that they have general application, are binding in their entirety and are directly applicable in all member States (Article 288 tfeu). As we have seen, it is the Council that has to adopt the basic Regulation on the restrictive measures. With respect to autonomous sanctions, the Council generally also exerts the competence to adopt the acts implementing the basic Regulation, notably when it is necessary to establish at the eu level ‘uniform conditions’ for implementing the measures.71 As to restrictive measures implementing un sc Resolutions, it is the Commission which is generally entrusted to amend the Regulation, or its annexes, in order to give effect to decisions of the un sc or its Committees on listing or delisting.72 3

The Implementation of eu Sanctions and the Role of the Member States: Determination of Penalties for Violations

The actual implementation of the restrictive measures imposed at eu level often requires further action on the part of the member States. In this respect, one may distinguish between possible legislative and administrative action by member States. Council Regulations imposing sanctions are directly applicable in the member States and, being part of eu law, take precedence over conflicting domestic legislation.73 As a consequence, as a rule and in the abstract, they should not require further legislation on the part of member States. However, the eu Regulation envisaging sanctions may, and in practice it generally does, require the adoption of additional legislation or regulations by member States. 71

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Pursuant to Art. 291 tfeu, where uniform conditions for implementing eu acts are needed in principle the competence to adopt the implementing acts pertains to the Commission. The Council may be granted such a competence “in duly justified specific cases”. I. Cameron, supra note 5, p. 39. eu Court of Justice, Flaminio Costa v. e.n.e.l., Case 6/64, 15 July 1964, ecli:eu:C:1964:66.

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Typically, this happens in respect of the determination of penalties for violations of the restrictive measures (so called ‘secondary sanctions’).74 In this respect, the regulations imposing restrictive measures normally include a standard clause, which is also set out in the Sanctions Guideline.75 For instance, Council Regulation (eu) No. 692/2014 of 23 June 2014 concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol provides in Article 8 (1) that Member States shall lay down the rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive.76 By virtue of such a provision, member States are under an articulate set of positive obligations: the duty to adopt internal measures imposing penalties for the violation of the restrictive measures; a duty to concretely take all necessary measures to enforce those measures and an obligation to ensure that the penalties are effective, proportionate and dissuasive. In principle, member States can choose the nature of the penalty: in effect, the penalties envisaged by the member States range from measures of an administrative or civil nature to criminal law penalties. The level of the penalty also remains within the discretion of each member State. Member States’ discretion is however limited by the requirements concerning effectiveness, proportionality and dissuasion. The notion of “effective, proportionate and dissuasive penalties” was elaborated by the European Court of Justice in its case-law77 and it is now regularly used in eu legislation. In any case, the interpretation of these requirements is not an easy task and has to be made in accordance with the eu case-law.78 Different techniques are used in the member States. The offences and the penalties can be set forth in ad hoc legislative measures, adopted with specific regard to a single sanctions regime. In many States following this procedure, 74 75 76 77 78

C. Eckes, eu Counter-Terrorist Policies and Fundamental Rights: The Case of Individual Sanctions (Oxford: Oxford University Press, 2009), pp. 55–56. eu Guidelines, op. cit., pp. 41–42, paras. 89–90. oj L 183, 24 June 2014, p. 9 ff. eu Court of Justice, Commission v. Greece, Case 68/88, 21 September 1989, ecli:eu: C:1989:339 paras. 86–92. See the Opinion of Advocate General Kokott, Berlusconi and Others, Joined Cases C-387/02, C-391/02 and C-403/02, 14 October 2004, ecli:eu:C:2004:624.

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the penalties can also be imposed directly by the Government, via secondary legislation, pursuant to an authorization provided in a general statute (generally with limitations as to the gravity of the offence). For instance, in the uk the Government generally enacts, under section 2 (2) of the European Communities Act 1972, specific statutory instruments for each individual sanctions regime, which create administrative or criminal offences for violations of the sanctions and lay down the penalties.79 In other legal orders, the penalties derive from general provisions of criminal law criminalizing breaches of eu regulations.80 As to criminal penalties, member States have to qualify the infringements of the eu Regulations as criminal offences and to set out the constitutive elements of the crime. The legislative technique used in the eu and its member States to criminalize the violations of sanctions has been challenged before both domestic judges and the European courts in the light of the principle of legal certainty. As applied in respect of criminal law, this principle requires that an offence involving criminal sanctions must be clearly defined in the law. In the Rosneft case, the Russian oil corporation has challenged the uk statutory instruments adopted for the implementation of eu sanctions before a uk Court, arguing that some of the expressions they use, in order to envisage criminal offences, are “so unclear and uncertain that they violate general principles of law and in particular the principle of legal certainty”.81 79

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Among others, this is also the case of Ireland (under Section  3 of the European Com­ munities Act, 1972: http://www.irishstatutebook.ie/1972/en/act/pub/0027); of the Nether­ lands (see S. Hopman, M. Uiterwaal, ‘The Implementation of eu Terrorism Blacklisting Sanctions in the Dutch National Legal System’ in I. Cameron, supra note 5, p. 223); of Slovenia (see ‘Act Relating to Restrictive Measures Introduced or Implemented in Com­ pliance with Legal Instruments and Decisions adopted within International Organisa­ tions’, Uradni list rs, No. 127/2006, zoupamo). See, for instance, the case of Finland. A general provision of the Finnish Penal Code punishes the violation of any regulatory provision in a “Regulation, adopted on the basis of Articles 60, 301 or 308 of the Treaty establishing the European Community, on the interruption or limitation of capital transfers, payments or other economic relations as regards the Common Foreign and Security Policy of the European Union, (365/2002)” or the violation of “a regulatory order issued on the basis of one of the above”. See K. Nuotio, ‘How, if at all, do anti-terrorist blacklisting sanctions fit into (eu) Criminal Law?’ in I.  Cameron, supra note 5, p. 126. In the legal order of Cyprus, infringements of eu Regulations are deemed to constitute a criminal offense under Article 136 (‘Disobedience to statutory duty’) and Article 137 (‘Disobedience of lawful orders’) of the Criminal Code (Chapter 154). The Queen on the Application of ojsc Rosneft Oil Company v. Her Majesty’s Treasury and others. On 27 November 2014 the Divisional Court rejected an action for interim relief but ordered an expedited hearing on the merits [2014] ewhc 4002 (Admin);

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Under the relevant eu legislation, the member States are under a duty to notify the Commission of the rules adopted for imposing sanctions ‘without delay’. The delegation to each member State of the competence to lay down the rules on penalties applicable to infringements of eu restrictive measures could determine inconsistencies in the repression of violations. In this respect, Eckes observed in 2009 that “it cannot be ruled out that the Community [now the eu] adopts criminal sanctions for the violation of European sanctions regimes at some point in the future”.82 Yet, this avenue does not seem feasible in practice, even since the entry into force of the Lisbon Treaty, which, in general terms, has broadened the competence of the eu in the field of criminal law. As is well known, under Article 83 tfeu the eu can enact directives with minimum rules on eu criminal law with respect to two classes of offences. In the first place, measures can be adopted, “in the areas of particularly serious crime with a cross-border dimension resulting from the nature or impact of such offenses of from a special need to combat them on an common basis” (Article 813(1)). This competence is however restricted to ten specific crimes (so called ‘Euro-crimes’), expressly and exhaustively listed by the Treaty.83 According to the same Treaty provision, additional Euro-crimes can be established by a Council Decision, yet unanimity in the Council and the consent of the European Parliament are required. So far, this possibility has never been used and a Decision identifying sanctions violations as an additional Euro-crime, even if it cannot be completely ruled out, seems rather unrealistic (even if one may argue that there is a special need to combat these kind of offences ‘on a common basis’). Secondly, under Article 83(2) tfeu the European Parliament and the Council, on a proposal from the Commission, are empowered to establish minimum rules with regard to the definition of criminal offences and sanctions if the approximation of criminal laws and regulations of the Member

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http://www.bailii.org/ew/cases/EWHC/Admin/2014/4002.html; on 9 February 2015 the Court asked the European Court of Justice for a preliminary ruling on the matter: [2015] ewhc 248 (Admin). Rosneft also brought applications for annulment against the eu Regulations, which are still pending before the General Court: see Cases T-715/14 and T-69/15. C. Eckes, eu Counter-Terrorist Policies and Fundamental Rights: The Case of Individual Sanctions, cit., pp. 55–56. See S. Peers, eu Justice and Home Affairs Law (Oxford: Oxford University Press, 2011), p.  762; S. Montaldo, I limiti della cooperazione in material penale nell’Unione europea (Napoli: Editoriale Scientifica, 2015), p. 64. In certain limited cases, the infringement of an eu sanction regime may be connected with some of the Euro-crimes expressly envisaged by the provision (notably, terrorism, money laundering, organised crime), for which the eu has already enacted secondary legislation.

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States proves essential to ensure the effective implementation of a Union policy in an area which has been subject to a harmonisation measure.84 Exercise of that competence is conditioned by two requirements. First, European criminal measures may only be adopted when that is essential in order to ensure the effective implementation of a Union policy. Second, the area in question must already have been the subject of ‘harmonisation measures’. In the field under consideration, one could maintain that significant inconsistencies exist in the national legislations of member States concerning secondary sanctions, that these inconsistencies may favour non-compliance with, or circumvention of eu sanctions and that, in consideration of the above, the adoption of minimum rules at eu level is essential to the implementation of an effective eu sanctions policy. However, given the language of Article 83 (2) tfeu, it is not clear whether the competence envisaged by Article 215 tfeu can be included among the areas for which the ancillary criminal competence foreseen by the first provision could be exercised.85 4

Granting of Exemptions and Monitoring

Apart from the situations in which the member States have to adopt legislative measures, they also have the responsibility to carry out a number of important tasks in order to ensure that sanctions regimes are complied with. Given that the eu is not a federal State, and does not possess enforcement agencies having general competence, the function of monitoring the application of the restrictive measures by natural and legal persons and that of ensuring the effective enforcement of the sanctions by the same subjects is still in the hands of member States. National authorities are in particular tasked to cooperate with the relevant economic operators (including financial and credit institutions) in the application of sanctions. In other words, as observed in the legal literature, “while eu legislation sets eu sanctions policy, adopts sanctions programs, and designates targets, the day-to-day operation of the eu sanctions regime falls to the Member States”.86 84

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See European Commission, Communication of 20 September 2011, ‘Towards an eu Criminal Policy: Ensuring the effective implementation of eu policies through criminal law’, com(2011) 573 final. Article 83 (2) refers to areas in which the ordinary or special legislative procedure is foreseen for the adoption of harmonisation measures, which is not the case of Article 215 tfeu. C.E. Golumbic and R.S. Ruff iii, supra note 3, p. 1042.

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National authorities also have to report to the Commission on their monitoring and enforcement activities. Another aspect of the implementation of the eu sanctions which is entrusted to member States is the granting of exemptions. In effect, as is typically the case with sanctions programs, the eu instruments on financial restrictions, restrictions on admission and other restrictive measures generally make provision for appropriate exemptions, to take account of, in particular, “basic needs of targeted persons, legal fees, extraordinary expenses or, where applicable, humanitarian needs or international obligations”.87 Another situation in which exemptions may be granted is in order to enable a targeted persons to fulfil an obligation arising from a prior contract.88 The granting of these exemptions has generally to be based on a case-bycase assessment89 of the particular situation of the person involved and is attributed to the national authorities. The latter may also have the competence to impose conditions as to the exemptions granted, in order to ensure that they do not frustrate or circumvent the objectives of the sanctions regime.90 It is to be noted that the eu acts imposing sanctions do not provide detailed criteria as to the granting of exemptions. Some guidance for the consideration of exemptions requests by the competent authorities of the member States is provided by the Sanctions Guidelines, as previously seen, and, in more articulated terms, by the Best Practices. However, as observed, “this guidance lacks specificity…and leaves a vast amount of discretion to member State competent authorities”.91 In fact, concerns have been expressed as to possible inconsistencies in the concrete implementation of eu sanctions deriving from the reliance upon the authorities of 28 separate member States for the management of exemptions and, more generally, for the day-to-day enforcement of sanctions.92 Divergences 87 eu Guidelines, cit., p. 12, para. 25. 88 eu Guidelines, cit., p. 13, para. 28, and p. 37, para. 86. 89 See eu General Court, Europäisch-Iranische Handelsbank ag v. Council, Case T-434/11, 6 September 2013, ecli:eu:T:2013:405, para. 128. 90 eu Guidelines, cit., p. 12, para. 26. 91 C.E. Golumbic, R.S. Ruff iii, supra note 3, p. 1044. 92 Ibid. See also the practical analysis by J. Helder, J.F. McKenzie, P.M. Reich, C.C. Klaui and P.E. Amberg, ‘Lesson Learned from Export Controls and Sanctions Enforcement Cases’, Baker and McKenzie, Amsterdam, 2013. An investigative project on the implementation of eu sanctions targeting Russian individuals, launched by the Leading European Newspaper Alliance (lena, which combines six important European newspapers) and published in June 2015, has led to ‘astonishing results’, showing in particular the ineffective application of the sanctions by national authorities and major inconsistences among

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in the actual implementation of eu sanctions programs among the member States could in effect derive from the unequal availability of financial resources in the various States, from different levels of efficiency and professionalism of the authorities involved in the administration of sanctions but also from diverging political attitudes in respect of the targeted entities or from a tendency to favour the economic interests of domestic operators. In light of that, two distinguished American lawyers have advocated the establishment by the eu of a centralized licensing agency “responsible for reviewing and issuing decisions on applications for exemptions from sanctions”;93 needless to say, the blueprint would be offered by the Office of Foreign Assets Control (ofac) of the us Department of the Treasury, which in the us system is the authority entrusted with the competence to administer and enforce economic sanctions.94 There is no denying that the creation of a centralised eu sanctions authority would render the eu system more efficient and also, from a practical point of view, less onerous for major economic operators, who currently have to comply with 28 legislations and to deal with 28 different national authorities. In the abstract, eu law and practice could also provide models for the establishment of such a body (it could be created as a unit within the Council or the Commission or also in the form of a European agency).95 Politically, however, that solution does not seem on the agenda, for member States are hardly likely to renounce their competences in the fields under discussion.96 While waiting for possible innovations, a certain level of coordination among the member States in the implementation of sanctions (that is, in the

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the 28 member States, available at http://investigativ.welt.de/2015/06/19/lena-alliance -reports-on-sanctions-against-russia/. C.E. Golumbic, R.S. Ruff iii, supra note 3, p. 1042. See Harvard Law School, ofac Licensing, Background Briefing, Project on Counterterrorism and Humanitarian Engagement, March 2013, available at http://blogs.law.harvard.edu/ cheproject/files/2012/10/CHE-Project-OFAC-Licensing.pdf. See also P.L. Lee, ‘Compliance Lessons from ofac Case Studies – Part i’, 131 Banking Law Journal (2014), p. 657, and ‘Part ii’, ivi, p. 717. Currently, about 30 agencies are operating in the framework of the eu. See, in general, R. Adam, A. Tizzano, supra note 51, p. 107. For a realistic assessment, see the speech by Giuseppe Maresca (Director General, Italian Department of Treasury) at the international conference on ‘Coercive Diplomacy, Sanctions and International Law’ organised in Rome, on 13 February 2015, by the Istituto Affari Internazionali, as reported by C. Franco, ‘Coercive Diplomacy, Sanctions and International Law’, Documenti iai, 15/05, available at http://www.iai.it/sites/default/files/ iai1505.pdf.

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eu language, “exchanging experience and developing best practice”), notably in respect of the delegated competences (granting of exemptions; monitoring and enforcement), is ensured by the Sanctions formation of the Foreign Relation Counsellors Working Party (relex Sanctions), a preparatory body of the eu Council, comprised of officials of the 28 member States.97 The importance of such a mechanism has recently been stressed by the Council, in its reply to a parliamentary question, where it observes that “several Council working groups, such as relex/Sanctions Formation, meet regularly in order to ensure comprehensive and consistent application of eu restrictive measures within all eu Member States”.98 Furthermore, under eu law the full and proper implementation by member States of the eu legislation on restrictive measures should be ensured by the eu Commission (the watch-dog for eu law) and eu Courts. More particularly, if a member State fails to adopt the necessary implementing rules in subiecta materia (for instance, by not laying down national provisions on effective, proportionate and dissuasive penalties for sanctions’ violations) or does not take appropriate action to enforce the eu Sanctions Regulations, an infringement procedure can be started by the Commission against that member State, in accordance with Articles 258 tfeu (or by another member State, under Article 259 tfeu).99 If the infringement procedure can be regarded as an extrema ratio (which so far has never been used in this specific area) the Commission in any case plays a pivotal role in favouring the uniform implementation of 97

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The mandate of relex Sanctions is the following: − Exchanging information and experiences on the implementation of specific restrictive measures regimes imposed by the eu; − Contributing to developing best practices among member States in implementation of restrictive measures; − Collecting all information available on alleged circumvention of eu restrictive measures and other international sanctions regimes of interest to the eu by targeted states, persons and entities; − Exchanging information and experience, including with third States and international organisations as appropriate, on the implementation  of international sanctions regimes of interest to the eu; – Assisting in evaluating the  results and difficulties in the implementation of restrictive measures regimes; – Exchanging views on ways and means to ensure the efficiency of management of restrictive measures regimes, including of their humanitarian provisions; − Examining all relevant technical issues relating to the implementation of eu restrictive measures. European Parliament, Question for written answer to the Council, Rule 130, Anna Elżbieta Fotyga (ecr), ‘Circumvention of the sanctions against Russia’, P-004556-15, Reply by the Council, 15 June 2015. The Commission or the other member States may bring the case to the Court of Justice, whose judgment is binding (Art. 260 tfeu). In case of non-compliance with the Court’s judgment, the Court may impose a lump sum or penalty payment on the concerned member State (ibid.).

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sanctions through a constant dialogue with national authorities and stakeholders. One has also to mention, in the same direction, the practice of publishing guidance documents.100 In the actual practice, a number of problems also derive from the number of national authorities generally involved in the application, monitoring and enforcement of sanctions. In Italy, the application of sanctions involves a myriad of institutions: the Ministries of Economic Affairs, of Foreign Affairs, of the Interior and of Justice; the Bank of Italy; the National Commission for Business and Stock Exchange (consob); the supervisory authority for the insurance sector (ivass) and the different Italian police corps and agencies involved in the fight against crime (Polizia di Stato; Carabinieri; Guardia di Finanza; dia). In order to ensure better coordination among those entities, a special Com­ mittee, Comitato di Sicurezza Finanziaria (Committee for financial security) has been established.101 The csf, set up within the Ministry of Economic Affairs and chaired by the Director General of the Treasury, consists of the representatives of the various institutions involved. In any case, it has to be added that when the Regulations implementing restrictive measures entrust specific tasks to the competent authorities of the member States, these authorities are “either listed in an Annex to the Regu­ lation, or indicated in an indirect way by listing in an Annex to the Regulation the web-pages of each Member State where information about its relevant competent authorities can be found”.102 5

Judicial Remedies against eu Imposed Sanctions

Under general eu law, the eu regulations adopted under Article 215 tfeu are subject to judicial review by the Court of Justice and the General Court of the eu. In particular, eu acts may be challenged in accordance with the action for annulment envisaged by Article 263 tfeu. As to the cfsp decisions constituting the basis for the imposition of sanctions, they are also subject to judicial review when they provide for sanctions targeted against natural or legal ­persons: 100 See, e.g., European Commission Notice of 16 December 2014, Commission Guidance note on the implementation of certain provisions of Regulation (eu) No. 833/2014, C(2014) 9950 final. 101 Law of 14 December 2001, n. 431, Gazzetta Ufficiale della Repubblica italiana, n. 290 of 14 December 2001; Legislative Decree of 22 June 2007, n. 109, ibid., n. 172 of 26 July 2007; Ministerial Decree of 20 October 2010, n. 203, ibid., n. 28 of 7 December 2010. 102 eu Guidelines, cit., p. 13, para. 30.

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in that respect, Article 275 (2) tfeu introduces a derogation to the general rule according to which the Court of Justice has no jurisdiction in the field of the cfsp.103 As is well known, the numerous actions brought to the Court by listed individuals and legal persons, challenging the eu measures for alleged incompatibility with fundamental human rights, have given rise to important and somewhat ‘revolutionary’ case-law of the eu Courts.104 That case-law has put the entire eu sanctions system under considerable pressure.105 This is not the place for discussing this jurisprudence, which has already been extensively analysed in the legal literature. It is however important, in order to highlight the impact of the eu practice on the global system of economic sanctions, to note that that case-law is breaking new ground as to the judicial review of sanctions. The first judgments that focused on the general, formal deficiencies in the listing and delisting procedures, amounting to a violation of the human rights of listed individuals (Kadi ‘i’),106 have opened the way to the more recent 103 On the scope of that exception, see eu General Court, Kala Naft, Case T-509/10, 25 April 2012, cit., paras. 34–38. 104 See the Chapter 8 by Monica Lugato in this volume. One has to note that, under Article 263 tfeu, natural or legal persons, being unprivileged applicants, may bring an action against acts addressed to them and against acts which are of direct and individual concern to them. Since the entry into force of the Lisbon Treaty, private parties may also challenge a ‘regulatory act’ (that is, a non-legislative act) if the act is of direct concern to the applicant. As regards targeted sanctions, there is no question that the persons which are targeted by the act adopting the sanctions may challenge it, even if the act is adopted in the form of a Regulation. As a matter of fact, the case-law of the eu Courts has consistently admitted applications by natural or legal persons included in the lists. A different legal discourse applies in respect of Regulations adopting sanctions against States. It has to be observed that in this case undertakings suffering economic losses from the sanctions do have limited standing to challenge the eu measure, according to the case-law of the eu Court of Justice, and notably under the so called Plaumann formula. In effect, they need to prove that the act in question affects them “by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually as in the case of the person addressed”: eu Court of Justice, Plaumann, Case 25–62, 15 July 1963, ecli:eu:C:1963:17. 105 See C. Eckes, supra note 3, p. 891 (“more than a hundred cases have been brought to the eu courts challenging different types of targeted sanctions”). 106 eu Court of Justice, Kadi and Al Barakaat International Foundation v. Council and Commission, Joined Cases C-402, C-415/05 P, 3 September 2008, ECLI:EU:C:2008:461 (Kadi ‘i’ Appeal). See also M. Bothe, ‘Security Council’s Targeted Sanctions against Presumed Terrorists: The Need to Comply with Human Rights Standards’, 6 Journal of International Criminal Justice (2008), p. 541.

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wave of decisions (Kadi ‘ii’; Iranian cases) in which full judicial scrutiny of both the lawfulness and of the merits of each measure is carried out by European judges.107 eu courts now routinely exert substantive judicial review of the merits of each measure, even if implementing a un sc decision, and they annul sanctions not supported by adequate evidence. More particularly, in the first place the eu courts analyse, from the viewpoint of Article 296 tfeu, the reasons given by the Council for listing the interested person. These reasons must comply with the listing requirements envisaged in the relevant acts and must be clear and specific, in order to allow the persons to defend their rights and to challenge the measure before a court.108 If the reasons are too vague, the listing is annulled.109 In the second place, eu courts evaluate the information or evidence presented by the Council in order to support the alleged reasons: if the information or evidence is insufficient or inadequate the listing is also annulled.110 As stated by the General Court, 107 eu Court of Justice, Commission and Others v. Kadi, Joined Cases C‑584/10 P, C‑593/10 P and C‑595/10 P, 18 July 2013, ecli:eu:C:2013:518 (Kadi ‘ii’ Appeal); eu General Court, Fulmen and Mahmoudian v. Council, Joined Cases T-439/10 and T-440/10, 21 March 2012, ecli:eu:T:2012:142; eu Court of Justice, Council v. Fulmen and Mahmoudian, Case C-280/12 P, 28 November 2013, ecli:eu:C:2013:775. 108 See, e.g., eu Court of Justice, Fulmen, cit., para. 61: “the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him is based, either by reading the decision itself or by requesting and obtaining disclosure of those reasons, without prejudice to the power of the court having jurisdiction to require the authority concerned to disclose that information, so as to make it possible for him to defend his rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in his applying to the court having jurisdiction, and in order to put the latter fully in a position to review the lawfulness of the decision in question”. See also eu Court of Justice, Kadi ‘ii’, cit., para. 100. 109 See, e.g., eu General Court, Bank Refah Kargaran v. Council, Case T-24/11, 6 September 2013, ecli:eu:T:2013:403. 110 eu Court of Justice, Fulmen, para. 64: “The effectiveness of the judicial review guaranteed by Article 47 of the Charter also requires that the Courts of the European Union are to ensure that the decision, which affects the person or entity concerned individually, is taken on a sufficiently solid factual basis. That entails a verification of the allegations factored in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (see Kadi ‘ii’, para. 119)”. See also M. Lester, ‘Recent European Court Judgments on Iranian Sanctions’, European Sanctions, available at http://europeansanctions.com/2013/09/19/ recent-european-court-judgments-on-iranian-sanctions/.

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the judicial review of the lawfulness of a measure whereby restrictive measures are imposed on an entity extends to the assessment of the facts and circumstances relied on as justifying it, and to the evidence and information on which that assessment is based. In the event of challenge, it is for the Council to present that evidence for review by courts of the European Union.111 This case-law impinges upon delicate issues, such as judicial review of political decisions or of classified evidence. In this respect, eu courts have clarified that the institutions must submit to the court the evidence necessary to substantiate the alleged reasons “without it being possible to raise objections that the evidence and information used by the Council is secret or confidential”.112 At the same time, the Court of Justice has acknowledged that overriding considerations pertaining to the security of the eu or of member States or to the conduct of international relations may justify derogations from the adversarial principle, under which all information and material must be fully communicated between the parties, and preclude the disclosure of some information to the person concerned.113 The new Rules of procedure of the General Court,114 adopted by the latter on 23 April 2015 and entered into force on 1 July 2015, do in effect envisage an ad hoc procedure allowing a party to submit that the communication of certain evidence would ‘harm the security of the eu or its Member States or the conduct of their international relations’ and the Court to take the material into account without it being disclosed to the other party.115 More particularly, under the new rules the General Court has to weigh up the confidentiality of the material against the requirements of effective judicial protection. In the light of that assessment, the Court may either order specific procedures to accommodate the above mentioned requirements (such as the 111 eu General Court, Bank Melli Iran v. Council, Case T‑390/08, 14 October 2009, paras. 37 and 107, ecli:eu:T:2009:401. 112 See eu General Court, Fulmen, cit., para. 100. 113 See eu Court of Justice, Fulmen, cit., para. 70. 114 oj L 105, 23 April 2015, p. 1. 115 Art. 105 (Treatment of information or material pertaining to the security of the Union or that of one or more of its Member States or to the conduct of their international relations). See M. Lester, ‘Draft European Court Rules Propose Secret Hearings’, 6 April 2014, European Sanctions, available at http://europeansanctions.com/2014/04/06/draft-european-court-rules -for-secret-hearings/; Id., ‘eu To Approve New Court Rules To Permit Secret Hearings’, 22 January 2015, European Sanctions; Id., ‘New eu Court Rules To Be Adopted Without uk Approval’, 23 January 2015, European Sanctions, available at http://europeansanctions.com/ category/court-procedure/.

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production by the party concerned, for subsequent communication to the other party, of a non-confidential version or a non-confidential summary of the information or material) or decide to refrain from communicating the material to the other party. In any case, the General Court will always take into account, in its assessment of the confidential material, that it has not been disclosed to the other party. These rules will take effect after the publication in the Official Journal of a Decision of the General Court determining the security rules for protecting the information or material provided under the new procedure. 6

Concluding Remarks

From the foregoing analysis, a number of conclusions can be drawn: – With more than 30 sanctions programmes currently in place, the eu is making a significant and increasing use of economic sanctions, often acting autonomously from the un Security Council, and has become a key player in the sanctions game (one could speak of ‘the Second Superpower’).116 – Even if eu institutions have consistently declared, inter alia in the basic policy document in the area, that autonomous sanctions must always be ‘in full conformity with international law’, the actual lawfulness of each measure has to be carefully assessed, notably under the law of the treaties (inadimplenti non est adimplendum) or under the rules on the international responsibility of States and international organizations (countermeasures). Indeed, from a conceptual viewpoint, the eu can be regarded as a trailblazer by the advocates of the controversial doctrine of collective countermeasures in reaction to erga omnes obligations, having on numerous occasions adopted sanctions without being individually affected by the breach of international law allegedly committed by the target State. – As regards autonomous sanctions, the eu is generally successful in aligning the conduct of a good number of third States (eu candidate and potential candidate countries; members of the eea; partners of the European Neighbourhood Policy) with the eu position. Also Switzerland generally conforms its legislation and practice to eu sanctions decisions. This confirms the strong influence that the eu effectively exerts in the area at issue, in consideration of its weight in political but especially in economic terms. 116 See, in particular, A. Moravcsik, ‘Europe, the Second Superpower’, 109 Current History (2010), p. 91.

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Legally speaking, under international law eu sanctions are obviously res inter alios acta for non-member States. Yet, the position of some eu candidate States (Serbia and Turkey) vis-à-vis eu decisions imposing sanctions has attracted special attention. In effect, from the viewpoint of the eu, candidate States are expected, in the period leading to accession, to progressively align with the eu acquis, which includes the cfsp and related decisions. Furthermore, even under general international law, candidate countries, notably those having started accession negotiations, have some general duties in subiecta materia, deriving from the basic requirement of good faith in the conclusion of international treaties, such as that of not deliberately undermine the eu cfsp. – Under eu law, the imposition of sanctions is governed by a complex procedure. Some legal and institutional aspects of that regime are still in need of clarification, particularly considering the innovations introduced by the Lisbon Treaty. Generally, the imposition of sanctions requires a cfsp Decision of the Council, adopted under Article 29 teu. The latter is directly implemented by member States when the eu has no competence to adopt the operative measures (arms embargoes; travel bans). In all other cases, further eu legislation is necessary under Article 215 tfeu. This two-step procedure may be time-consuming and lead to delayed and ineffective implementation of the sanctions.117 Additionally, the adoption of the basic cfsp Decision requires unanimity among member States, which could determine a paralysis in eu action or the adoption of watered-down measures. In this respect, the possible application of the rules of the teu on ‘constructive abstention’ has been explored, yet that path does not seem promising, both in general terms and with particular respect to the field of sanctions. – The concrete implementation of eu sanctions is largely dependent upon the conduct of the member States. First of all, they generally have to lay down the rules on the penalties for violations of the restrictive measures. More particularly, the qualification of the offence (civil, administrative or criminal) and the choice of the penalties remains within the discretion of each member State; on the other hand, that discretion is limited by the obligation to ensure that the adopted penalties are effective, proportionate and dissuasive. In practice, the interpretation of the latter obligation may be problematic. Secondly, the tasks of monitoring the application of eu sanctions and that of ensuring their effective enforcement are also in the hands of 117 See L. Leenders, supra note 3, p. 7.

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the member States. Thirdly, under the current eu system, the competence to grant exemptions is also delegated to the national authorities of member States. The relevant eu legislation, and the acts adopted in this field do not provide detailed criteria for this but only very general guidelines. – The delegation to the national authorities of 28 member States of crucial functions concerning the implementation of eu sanctions (penalty determination; enforcement; granting of exemptions) has given rise to concerns about possible inconsistencies in the application of the measures, both among economic and financial operators and in the legal literature. Proposals have been put forward in order to overcome the present legal framework. On the one hand, one could envisage the adoption by eu institutions of common rules on penalties for violations of the restrictive measures (under the new competences introduced by the Lisbon Treaty in the field of criminal law). On the other hand, the establishment of an eu centralized agency, entrusted with the competence to issue decisions on exemptions, has been advocated. Both proposals are worthy of note, even if, at the moment, they do not seem likely to be put on the eu political agenda, due to the unwillingness of a number of member States to yield their prerogatives in such a sensitive area. – Under eu law, acts adopting sanctions may be challenged before the Court of Justice of the eu (Article 263 tfeu) and an extensive litigation has been triggered by targeted individuals and entities. As a consequence, the eu (and, indirectly, the un) sanctions systems have been subjected to considerable pressure. In particular, eu courts now exert substantive judicial review on the merits of each restrictive measure, even if implementing a un sc decision, annulling sanctions not supported by adequate evidence. This case-law raises thorny issues, such as the limits of the judicial review of political decisions or the possibility for a court of law to use classified evidence. This latter issue has been tackled by the new Rules of procedure of the General Court, which entered into force on 1 July 2015, and have raised perplexities both among civil rights defenders and among the advocates of a stronger eu counter-terrorism policy. Recent eu case-law on sanctions has also been criticized by us officials, for risking undermining the effectiveness of international sanctions (with particular respect to Iranian sanctions).118 On the other hand, the eu case-law has had a crucial role in favouring important reforms at the un level as concerns the listing and delisting 118 J. Kanter, ‘Iran Ruling In Europe Draws Anger From U.S’, The New York Times (6 September 2013), available at http://www.nytimes.com/2013/09/07/world/europe/european-union -wrongly-imposed-sanctions-on-iranian-companies-court-rules.html?r=0.

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procedures, such as in particular the creation of the Office of the Ombuds­ person in respect of the Al-Qaeda sanctions.119 119 See, inter alia, Chatham House, International Law Summary, un Sanctions, Human Rights and the Ombudsperson, 17 May 2014, p. 3: “There can be little doubt that this (the 2008 Kadi Judgment by the eu Court of Justice) sent shockwaves down the hallways of the un headquarters and led ultimately to the establishment in 2009 of the Office of the Ombu­ dsperson”. Cf. also M. Gestri ‘Quali rimedi a tutela degli individui colpiti dalle sanzioni anti-terrorismo?’ in Y. Gamarra (ed.), Lecciones sobre justicia internacional (Zaragoza, Institución Fernando el Católico, 2009), p. 79.

chapter 5

Practice Makes Perfect, Eventually? Unilateral State Sanctions and the Extraterritorial Effects of National Legislation Charlotte Beaucillon Abstract Unilateral sanctions are adopted in the context of what remains of a non-institutionalised international society, where sovereign States retain the power to pursue the respect of their own legal interests through non forceful measures. This vestige of private justice clearly questions the legitimacy of unilateral measures, whose purpose and justification are qualified by the State itself, without any control of whether the measures are effectively reacting to a breach of law or pursuing different political and economic goals. Extraterritoriality exacerbates this legitimacy gap in that it not only permits the fulfilment of foreign policy goals abroad, but also questions a core issue of public international law: the articulation of multiple State sovereignties. This issue is all the more significant today as both economic sanctions and sanctions for their violation have dramatically increased. From this starting point, this paper aims at determining whether or not – and under what conditions – the imposition of unilateral State sanctions through national legislation with extraterritorial effect can be considered compatible with public international law.

Keywords unilateral sanctions – extraterritoriality – u.s. practice – international law

1 Introduction Extraterritoriality and the broader issue of States’ unilateral normative action on the international scene is perhaps one of the most ancient questions of classical international law, though the least circumscribed by the eminent and prolific doctrinal debate it triggered.1 The purpose of this chapter is not to 1 On extraterritoriality and the volatile notion of jurisdiction, see amongst others: M. Akehurst, ‘Jurisdiction in International Law’, 46 British Yearbook of International Law (1975), pp. 145–257; © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_006

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develop a new theory on 21st century extraterritoriality, but rather a pragmatic analysis of the international law framework in which economic sanctions can be imposed today through national legislation having extraterritorial effects. This issue is threefold and can be dealt with in terms of effectiveness, legitimacy and legality. It is well known that the widest possible implementation of economic sanctions is a precondition to their effectiveness. The globalisation and transnationalisation of markets, the multiplication of regional custom unions and the general liberalisation of exchanges worldwide are constraints that must be taken into consideration when imposing sanctions that aim at restricting exchanges with a specific State target. Quite simply, the more States that implement a specific thread of economic sanctions, the smaller the potential for the State target to circumvent the measures by turning to other partners and markets. As a result, single-State sanctions should be weaker than sanctions imposed by a group of States. Similarly, sanctions decided on a unilateral basis by a State or a group of States should be less effective than general measures imposed collectively through a United Nations Security Council Resolution under Chapter vii of the un Charter. This is without considering the economic power D.W. Bowett, ‘Jurisdiction: Changing Patterns of Authority over Activities and Resources’, 53:1 British Yearbook of International Law (1982), pp. 1–26; S. Coughlan, R.J. Currie, H.M. Kindred, T. Scassa (eds.), Law Beyond Borders: Extraterritorial Jurisdiction in an Age of Globalization (Toronto, Irwin Law, 2014), p. xv-372 ; P. Fedozzi, ‘De l’efficaté extraterritoriale des lois et des actes de droit public’, 27-ii Collected Courses of the Hague Academy of International Law (1929), pp. 141–242; G.W. Keeton, ‘Extraterritoriality in International and Comparative Law’, 42-I Collected Courses of the Hague Academy of International Law (1948), pp. 283–391; F.A.  Mann, ‘The Doctrine of International Jurisdiction Revisited after Twenty Years’, 186 Collected Courses of the Hague Academy of International Law (1984), pp. 9–116; D.E. Rosenthal, W.M. Knighton, National Laws and International Commerce: the Problem of Extraterritoriality (London: Routledge, 1982), p. xi-96. On States unilateral coercive action without using force, see amongst others: D. Alland, ‘The Definition of Countermeasures’ in J. Crawford, A. Pellet and S. Olleson (eds.), The Law of  International Responsibility (Oxford: Oxford University Press, 2010) pp. 1127–1136; L.F. Damrosch, ‘Enforcing International Law through Non-forcible Measures’, 269 Collected Courses of the Hague Academy of International Law (1997), pp. 9–250; E. Fukatsu, ‘Coercion and the Theory of Sanctions in International Law’ in R. St. J. Macdonald and D.M. Johnston (eds.), The Structure and Process of International Law: Essays in Legal Philosophy, Doctrine, and Theory (Dordrecht: Martinus Nijhoff, 1986), pp.1187–1205; C. Leben, ‘Les contre-mesures inter-étatiques et les réactions à l’illicite dans la société internationale’, 28 Annuaire français de droit international (1982), pp. 9–77; L. Picchio Forlati and L.-A. Sicilianos (eds.), Economic Sanctions in International Law (Leiden: Martinus Nijhoff, 2004), p. xxxvii-868.

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of the sanctioning State and the relative economic weakness of the target; this is for instance demonstrated by the unilateral sanctions imposed on Iran by the us and the eu in addition to un coercive measures.2 Besides these elementary considerations of relative economic power, the efficiency and legitimacy of unilateral economic sanctions (be they adopted by a single State or by a group of allies) will depend on their widest possible implementation, through all channels available to effectively reach the target and the inclusion of new sanctioning States into the sanctions thread. This is the case for instance when the sanctioning State justifies unilateral measures arguing that the target has violated an erga omnes obligation, that is, an obligation due the international community as a whole.3 In other circumstances, the sanctioning State will seek to exert pressure on third States to induce them to follow their unilateral sanctions threads. This is for instance the case of secondary boycotts, by which the sanctioning State prohibits its nationals from conducting commercial relations with nationals of the target State. This technique may be further elaborated into a tertiary boycott, by prohibiting commercial relations with operators that are affected by a secondary boycott. Extraterritoriality intervenes at a third stage: the sanctioning State seeks to impose an obligation on third States and their nationals to abide by the unilateral sanctions it has decided. In other words, extraterritoriality corresponds to situations where a State seeks to control diverse elements that are situated outside its territory through its domestic legal order, that is, to exert directly and extraterritorially its normative power.4 The legitimacy issue that stems from this two-faced manifestation of extraterritoriality is not new. In the field of sanctions, unilateral measures must first be articulated with the collective sanctions5 decided by the United Nations 2 C. Beaucillon, ‘La sanction des “Etats proliférants”. Remarques sur l’interaction entre mesures collectives et unilatérales dans le cas iranien’, xvi Annuaire français de relations internationales (2015), pp. 593–607. 3 Barcelona Traction, Light and Power Company Ltd (Belgium v. Spain), Judgment of 5 February 1970, i.c.j. Reports 1970, p. 3. 4 B. Stern, ‘L’extraterritorialité revisitée’, 38 Annuaire français de droit international (1992), p. 244. 5 Strictly speaking, the term sanction assumes the existence of a prior breach of the law. In a broad sense, a sanction can refer to any legal or material process aimed at ensuring the efficiency of the law. Cf. G. Scelle, ‘Le rôle des sanctions’ in A. Mestre, L. Le Fur and G. Scelle (eds.), Les sanctions internationales, trois opinions de juristes (Paris: Pedone, 1936), p. 41. Some have convincingly argued that the term sanction should be used to refer to the sanctions that international organisations impose on their Members for breaches of their constitutive status. Cf. W. Friedman, ‘General Course in Public International Law’, 127-ii Collected Courses of

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Security Council under Chapter vii of the Charter: while the former will be decided after a subjective and single decision of each sanctioning State according to its own foreign policy priorities, the latter correspond to the exercise of the ‘primary responsibility’6 of the unsc to maintain international peace and security and depend on the previous collective determination of an aggression, a threat to peace, or a breach of peace.7 This sheds light on the specific legal nature of unilateral measures. They are indeed adopted in the context of what remains of a non-institutionalised international society, where sovereign States have the power to pursue the respect of their own legal interests. The unilateral sanction aims to exhaust the legal disagreement between the sanctioning State and the target State, by inducing the latter, allegedly breaching his obligations towards the former, to modify its behaviour accordingly.8 This atavism of private justice9 clearly questions the legitimacy of unilateral measures, the purpose and justification of which are qualified by the sanctioning State itself, without any control of whether the measures are effectively reacting to a breach of law or pursuing different political and economic goals. Extraterritoriality exacerbates this legitimacy gap in that not only is it a topical instrument of fulfilment of foreign policy goals abroad, but it also questions a core issue of public international law: the articulation of multiple State sovereignties. This issue is all the more significant today as both the practice of imposing economic sanctions and sanctions for their violation have dramatically increased.10 The stakes are high, as illustrated by the 88.3 million dollar

the Hague Academy of International Law (1969), p. 116. In this perspective it has been argued that the ‘measures’ the unsc adopts under Art. 39 of the Charter are sanctions for a breach of the Charter. Cf. J. Combacau, Le pouvoir de sanctions de l’ONU. Etude théorique de la coercition non militaire (Paris: Pedone, 1974), p. 16. Contra, M. Forteau, Droit de la sécurité collective et droit de la responsabilité internationale de l’État (Paris: Pedone, 2006), pp. 106–107. 6 Art. 24 (1) of the un Charter. 7 Art. 39 of the un Charter. 8 S. Szurek, ‘Le recours aux sanctions’ in H. Gherari and S. Szurek (eds.), Sanctions unilatérales, mondialisation du commerce et ordre juridique international. A propos des lois D’Amato-Kennedy et Helms-Burton (Paris: Montchrestien, 1998), p. 25. 9 D. Alland, Justice privée et ordre juridique international (Paris: Pedone, 1994), p. 503. 10 On us sanctions administration, cf. amongst others: C.E. Golumbic, R.S. Ruff, ‘Lever­ aging the Three Core Competencies: How ofac Licensing Optimizes Holistic Sanctions’, 38 North Carolina Journal of International Law and Competition Regulation (2013), pp. 729–807; B. Ginsberg, ‘Managing compliance with us Treasury Department ofac Obligations’, 5:5 Global Trade and Customs Journal (2010), pp. 183–190.

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civil case settlement against JP Morgan for alleged violations of the us ­sanctions against Cuba, Iran and Sudan;11 or the ‘largest ever settlement’12 of 963 million dollars against bnp in the context of criminal charges for violation of us sanctions against Sudan, Iran and Cuba. The legality of extraterritorial unilateral measures can be questioned on multiple grounds. Given their ability to influence other States to join in the imposition of sanctions, they could in extreme cases disrespect the prohibition of constraint in international relations.13 Given that they restrain economic relations with the target, they may directly breach the World Trade Organisation regime.14 When unilateral measures are contrary to international law governing relations between the sanctioning State and the target State, the former will engage its international responsibility, unless it can demonstrate that the unilateral measure qualifies as a countermeasure, and thus a circumstance precluding wrongfulness.15 As such, and understood as the expression of the States’ normative power, extraterritoriality has arguably raised different questions, which have received diverse solutions according to the successive evolutions of both State practice and international law. Applied to the field of sanctions, this core issue will be examined in four steps. It will begin with an analysis of the diverse analytical frameworks that have been developed on extraterritoriality, from sovereignty to jurisdiction theories (paragraph 2). It will then concentrate on two criteria that are often used to justify the extraterritorial effects of legislation imposing unilateral sanctions, concluding that there has been an emergence of a general rule of international law prohibiting extraterritorial effects based on the control criterion (paragraph 3), and pointing to the rarely met legal conditions under which the effects criterion may justify extraterritorial effects (paragraph 4). 11 12

13

14

15

E. Javers, ‘JP Morgan to Pay $88 Million for Violating u.s. Sanctions’, cnbc, 25 August 2011, available at http://www.cnbc.com/id/44276107. u.s. Department of the Treasury, ‘Treasury Reaches Largest Ever Sanctions-Related Settlement with bnp Paribas sa for $963 Million’, Press Release, 30 June 2014, available at http://www.treasury.gov/press-center/press-releases/Pages/jl2447.aspx. Y. Kerbrat, L’applicabilité extraterritoriale des règles internes relatives à l’activité extraterritoriale des enterprises (Ph.D. Thesis, University Paris 2 Panthéon Assas, Dir. Charles Leben, unpublished), p. 515. Amongst others on the Helms-Burton Statute’s compatibility with the G.AT.T.: G. Burdeau, ‘Droit international public et sanctions internationales’ in Habib Gherari and Sandra Szurek (eds.), op. cit., p. 179. A/CN.4/SER.A/2001/Add.1 (Part 2), ilc, Article 22 of the Draft Articles on State Res­ ponsibility for Internationally Wrongful Acts. See also icj, Gabcikovo-Nagymaros Project (Hungary v. Slovakia), 25 September 1997, i.c.j. Reports 1997, para. 82.

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These findings are of significant interest today, as extraterritoriality is now the object of renewed international interest for regulation, though as yet there seems to be no consensus (paragraph 5). 2

Construing the Normative Power of the State: When Practice Makes Perfect

The very acceptance or rejection of extraterritoriality in international law rests on the theoretical conception of the normative power of States. This Manichean construction has been developed through a doctrinal debate characterised by dominant theories seeking to circumscribe the normative power of States on the one hand, and on the other by minority theories aiming at overcoming the issue by postulating its uselessness (2.1). At a more pragmatic level, since extraterritoriality can neither be totally outlawed nor accepted, some constant rules of power articulation should guide the analysis. These rules precisely lead to examine two most problematic criteria often used to impose sanctions with extraterritorial effect (2.2). An Imperfect Theoretical Framework Limiting States’ Extraterritorial Normative Power There is no denying the fact that any analysis of the extraterritorial effects of national legislation imposing international sanctions should be grounded in the international law logic that governs extraterritoriality as a whole.16 From this starting point, it is argued that while the existing theoretical framework undoubtedly contributes to the confinement of potentially contentious State practice, it does not resolve the question of the legality or illegality of extraterritoriality. It concentrates on the balance to be struck between a principle and its exception. First, it has generally been accepted that the scope of States’ competences is essentially linked to their sovereignty, thus the need to articulate multiple States’ competences as many expressions of multiple and equal sovereignties. Second, it is generally accepted that the exercise of States’ competences are linked to one of their constitutive elements – the territory, the population, the government. These two premises have resulted in the affirmation of the principle according to which States’ competences shall be exercised within the boundaries of each State’s territory, and cease beyond. The only exception to

2.1

16

For a short though detailed history of the theoretical trends governing the question, Y. Kerbrat, op. cit., pp. 47–64, pp. 82–84, pp. 95–102.

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this is the subsidiary competence that States may exercise over their nationals abroad. The balance should therefore be struck as follows: extraterritoriality, without a need to distinguish the jurisdictio from the imperium, is in principle forbidden by international law, while circumscribed exceptions may be tolerated. This approach, which still holds today, has been contested in vain from two different angles. From one side of the spectrum, it has been argued that extraterritoriality is already governed by a general rule of articulation of States’ competences: the legitimate link between the State’s normative power and the foreign location. In other words, extraterritoriality is in principle authorised on the condition that it can be justified by a specific link between the normative power of the State and the situation it aims to govern abroad. This doctrine of Jurisdiction17 has been developed through diverse criteria allowing to determine when a State legitimately – and therefore lawfully – pretends to extend its normative power to foreign situations. At the opposite side of the spectrum, it has been argued in private international law that the extraterritorial effects of the normative power of the State are always legal, since they only depend on subsequent and voluntary implementation by the other States.18 Distinguishing clearly the normative and executive competences of the States, is has been argued that any extraterritorial effect of national legislation depends on the will of third States to give effect to these provisions on their territories. Based on the notion of States’ consent, this theory concludes that the exercise of normative power governing outside the State territory can never be contrary to international law and therefore is potentially limitless. As rightly noted elsewhere, the temporary acceptance in public international law of this theory may have occurred because of the scarce and uncontentious extraterritorial practice at the time, and has quickly been set aside.19 It stems from the above that the theoretical framework that is today applicable to extraterritoriality essentially postulates that it is contrary to international law: either totally, with some exceptions (sovereignty-based theory), or partially, if deprived of a legitimate link to the ruling State (doctrine of jurisdiction), 17 18 19

F.A. Mann, ‘The Doctrine of Jurisdiction in International Law’, 111 Collected Courses of the Hague Academy of International Law (1964), pp. 1–162. P. Mayer, ‘Droit international privé et droit international public sous l’angle de la notion de compétence’, 68 Revue critique de droit international privé (1979), p. 355. On the evolution of Hans Kelsen’s position on the liceity of extraterritoriality before and after the publication of his Principles of International Law (1966), cf. Y. Kerbrat, op. cit., pp. 93–94.

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or indirectly, through the consent of the third State to implement the effects of the ruling States’ legislation (consent theory). Despite it being accepted that extraterritoriality is theoretically contrary to international law, there remains a growing State practice; articulated exceptions are evidently necessary. If so, it may be wondered whether a reversal of the balance between the principle and its exception would be convincing. Navigating in Murky Waters: The Identification of Specific Prohibitions under International Law It has recently been suggested that a methodological change could be more fruitful in the theoretical approach to extraterritoriality, postulating the legality of the exercise of States’ normative power outside their territories.20 Before proceeding to the discussion, it is useful to recall the elements of the theoretical framework, which will guide our analysis. The jurisdiction to prescribe refers to the power of a State to enact rules through its legislative, administrative or judicial organs. The jurisdiction to enforce refers to the power of a State to implement a general rule or an individual decision through material acts of execution, that may eventually include the use of coercion. It is well known that the jurisdiction to enforce cannot be exercised outside the territory of the State without the permission of the State on whose territory the implementation is to be executed. The Permanent Court of International Justice in the Lotus case of 1927 clearly stated the territoriality principle:

2.2

Now the first and foremost restriction imposed by international law upon a State is that failing the existence of a permissive rule to the contrary it may not exercise its power in any form in the territory of another State. In this sense jurisdiction is certainly territorial; it cannot be exercised by a State outside its territory except by virtue of a permissive rule derived from international custom or from a convention.21 It is acknowledged that in practice, States will seek to justify the extraterritorial effects of their national legislation through recourse to the classical

20

21

Y. Kerbrat, op. cit., passim. And later, starting from the perspective of criminal jurisdiction, Cedric Ringaert, Jurisdiction in International Law (Oxford: Oxford University Press, 2008), p. xxiii-241 (2nd ed. in 2015). Permanent Court of International Justice, The case of the s.s. “Lotus” (France v. Turkey), Judgment of 7 September 1927, Series A No. 10, p. 18.

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criteria – territory or nationality – although sometimes in significantly broader terms.22 This is the case of the control criterion, which derives from the classic nationality link between a State and a situation abroad, as well as of the effects criterion, which is linked in turn to the territoriality principle. Before concentrating on the control and effects theories, it is necessary to determine what exactly the analyst should be looking for. An exception to the absolute prohibition of extraterritoriality? The existence of conditions required for the doctrine of jurisdiction? The methodological change in the theoretical approach to extraterritoriality discussed above, proposes another question. It is based on the dictum of the Permanent Court of International Justice that follows the abstract of the Lotus decision quoted above: It does not, however, follow that international law prohibits a State from exercising jurisdiction in its own territory, in respect of any case which relates to acts which have taken place abroad, and in which it cannot rely on some permissive rule of international law. Such a view would only be tenable if international law contained a general prohibition to States to extend the application of their laws and the jurisdiction of their courts to persons, property and acts outside their territory, and if, as an exception to this general prohibition, it allowed States to do so in certain specific cases. But this is certainly not the case under international law as it stands at present. Far from laying down a general prohibition to the effect that States may not extend the application of their laws and the jurisdiction of their courts to persons, property and acts outside their territory, it leaves them in this respect a wide measure of discretion which is only limited in certain cases by prohibitive rules; as regards other cases, every State remains free to adopt the principles which it regards as best and most suitable.23 It has been argued that: De ce fameux dictum, l’analyste retient un objet et une méthode. Le droit international laissant libres les Etats d’étendre le champ d’application des règles qu’ils édictent en l’absence de règles prohibitives contraires, 22

23

The United States, but also the United Kingdom. A.W. Lowe, ‘Blocking extraterritorial jurisdiction: the British protection of trading interests Act, 1980’, 75 American Journal of International Law (1981), pp. 257–282; R. Higgings, ‘The legal bases of jurisdiction’ in C.-J. Olmstead (ed.), The Extraterritorial applications of Law and Response Thereto (Oxford: ils and esc Publishing, 1984), pp. 3–14. Permanent Court of International Justice, The case of the s.s. “Lotus”, supra note 21, p. 19.

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il convient, pour déterminer l’étendue de la compétence normative de chaque Etat, de démontrer positivement l’existence de telles règles en s’appuyant sur les techniques traditionnelles de formation du droit international.24 It is thus suggested that since sovereignty equates to independence25 and that States retain exclusive control over their territories, it is not necessary to the protection of sovereignty to strictly limit States’ normative power. On the contrary, if sovereignty postulates that States should consent to the limitations of their jurisdiction, the limitation of their normative power should be positively demonstrated26 according to the rules governing the formation of customary international law. Are they one and the same? Not quite. From this permissive perspective, which is also more tuned with State practice, the question transforms from asking the conditions to which extraterritorial effects are legal, into asking to which conditions they are illegal. This framework of analysis will now be applied to the specific case of sanctions, verifying to what extent a specific rule of international law prohibiting extraterritorial effects of national legislation is limiting States’ freedom to exercise their normative power, when it is based respectively on the control or on the effects criteria. 3

The Global Rejection of the Control Criterion to Justify Extraterritoriality

The control criterion has mainly been used by the United States in their post World War ii practice, when imposing unilateral sanctions or executing collectively decided measures of the United Nations Security Council (3.1). It is now undisputed that recourse to the control criterion has been contested at the highest level by third States and organisations, that us legislation producing extraterritorial effects abroad has generally been left unapplied by third country jurisdictions, and that the United States themselves have progressively 24 25

26

Y. Kerbrat, op. cit., p. 46. Permanent Court of Arbitration, Island of Palmas Case (Netherlands v. United States of America), Award, 4 April 1928, ii r.i.a.a. 829, under the Special Agreement Relating to  the Arbitration of Differences Respecting Sovereignty over the Island of Palmas (or  Miangas) concluded between the usa and the Netherlands, in Washington, on 23 January 1925. Y. Kerbrat, op. cit., p. 80.

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abandoned the use of the control criterion. This leads to the conclusion of the emergence of a specific international law rule prohibiting the use of this criterion in the field of sanctions (3.2). The Control Criterion, a Specific Feature of us Practice on Economic Sanctions The traditional common law incorporation criterion by which a company has the nationality of the State in which it is incorporated, has been further extended by the us through the control theory, as illustrated by the notion of person under us jurisdiction.27 This notion first appears28 in the First War Power Act amending in 1941 the Trade with Enemy Act of 1917.29 It is defined by a Public Circular one year later, the us Treasury explaining that a “person subject to the jurisdiction of the United States” refers to a us citizen, a person within the us, a corporation or other entity constituted under us law or with its principal place of business in the us, or a “corporation or other entity, wherever organised or doing business, owned or controlled by any of the preceding categories of persons”.30 This definition has been confirmed in most of the legislation adopted since then by the us. In 1977, the Trade with the Enemy Act was limited to times of war.31 In times of peace, the International Emergency Economic Power Act authorises the President to adopt measures of exchange controls when an “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign security, or economy of the United States”.32 Similarly, the Export Administration Act of 1969 was amended by The Powers of the President in Time of War or National Emergency Act in 1977, in order to authorise the President of the United States to restrict “the exportation […] of any articles, materials, or supplies, including technical data or any other information, subject to the jurisdiction of the United States or exported by any person subject to the jurisdiction of the United States”.33

3.1

27

28 29 30 31 32 33

On the use of the control criterion in us legislation imposing international sanctions, cf. the detailed analysis by Yann Kerbrat, op. cit. (esp. Chapter 2 ‘Approche sectorielle de la compétence fondée sur le contrôle: le cas des restrictions aux échanges et aux investissements internationaux à des fins politiques ou stratégiques’), pp. 169–221. Y. Kerbrat, op. cit., p. 171. Trade with the Enemy Act, 1917, Public Law 65–91, 40 Stat. 411, amended in 1941. u.s. Treasury Public Circular No. 18, 30 March 1942, 7 Fed. Reg. 2503, 2 April 1942. Act concerning the Powers of the President in Time of War Sect. 202(a), 50 U.S.C. 1701. International Emergency Economic Power Act, Sect. 202(a), 50 U.S.C. 1701. Act concerning the Powers of the President in Time of War, Public Law 95–223, 28 December 1977.

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Today, both the International Emergency Economic Power Act and the Export Administration Act are in force and produce extraterritorial effects in the field of sanctions, through the notion of “persons subject to the jurisdiction of the United States”. Initially, us practice could be considered moderate. us sanctions against Communist States like China or North Korea34 and against Cuba35 had extraterritorial effects in that they prohibited “persons subject to the jurisdiction of the United States” from engaging in financial or commercial relations with the targeted countries. However, direct implementation of this legislation in foreign subsidiary companies remained exceptional. During the 60’s, there were two cases involving British and Australian branches of us companies that were prevented from implementing or continuing their contracts linked with targeted China and Vietnam, although these commercial links were either indirect in the first case36 or much encouraged by the local government of the subsidiary branch in the second case.37 At another level, the us Treasury refused certain exportation licences requested by foreign subsidiary companies, as was the case of the Belgian branch of a us company, therefore blocking exportation of agricultural goods to Cuba.38 The rather moderate practice of the us rested on the attribution of general or specific licences to foreign subsidiary companies. For instance, the Foreign Assets Regulations were revised in 1969 in order to allow foreign subsidiary companies that were incorporated abroad, and that were developing their activities outside the us, to engage in commercial relations with China.39 It should be noted that such licences were considered exceptions to the unchallenged 34 Foreign Assets Control Regulations, 31 c.f.r. Part 500, and Transactions Control Regulations, 31 c.f.r. Part 505. 35 Cuban Assets Control Regulations, 31 c.f.r. Part 515. 36 The radars sales contract was passed between the British branch of the us company and other British companies, which ultimately would deliver airplanes to China. The uk reacted strongly, threatening the British branch with sanctions if they implemented the contract. Cf. R. Ergec, La compétence extraterritoriale à la lumière du contentieux sur le gazoduc euro-sibérien (Bruxelles: Bruylant, 1984), p. 109; Y. Kerbrat, op. cit., p. 176. 37 The Australian branch of the Utah Developments Company had indeed actively encouraged the contract for the coal that was to be exported to Vietnam was extracted in Australia. Cf. W. Pengilley, ‘The extraterritorial impact of u.s. Trade Laws – Is it not Time for “et” to “Go home”?’, 20 World Competittion Law and Economics Review (1997), pp. 17–55; Y. Kerbrat, op. cit., p. 176. 38 J. Salmon, M. Vincineau, ‘Chronique’, 6 Revue belge de droit international (1970), pp. 348–351; R. Ergec, op. cit., p. 4; Y. Kerbrat, op. cit., p. 176. 39 Regulations of 22 December 1969, Fed. Reg. Vol. 34 No. 246, pp. 20189–20192.

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normative us competence abroad. Similarly, the initial low rate of direct opposition to us legislation with extraterritorial effects can be explained by the tendency to directly pressure us parent companies to oblige their subsidiary branches to abide by us embargoes.40 us practice became more aggressive at the turn of the 80’s, when us autonomous sanctions increased. The aim of the control criterion was then clearly to encourage European States to get in line with us foreign policy. This is first illustrated by the scope of the Export Administration Amendments Act of 1977, which applied to foreign companies when controlled by American citizens.41 This extended scope of the control criterion was mostly used in the sanctions against Uganda, adopted in reaction to mass violations of human rights by the political regime of Idi Amin. A general embargo was decided on the basis of the Export Administration Amendments Act. Control by American citizens was a matter of factual appreciation and no exception was granted to foreign subsidiary companies. This is therefore a strong example of a legislative practice affirming a potentially unlimited normative competence of the United States on foreign companies controlled by us citizens or residents – although the measures were finally waived in 1979. Another strong example of recourse to the control criterion is the EuroSiberian pipeline case, which crystallised in 1981 after the proclamation of martial law in Poland. us sanctions against the ussr intended to impede the construction of the Euro-Siberian pipeline, in a context where energetic considerations prompted European countries to promote the conclusion of contracts with the ussr. In 1981, the us strengthened their export controls in the field of gas and oil exploitations, which were put in place after the Soviet invasion in Afghanistan.42 In 1982, the Trade Department extended these measures to all persons “subject to the jurisdiction of the United States”, irrespective of the origin of the controlled goods and technologies.43 These measures prompted the strongest reactions from European countries substantially forbidding the companies that were engaged in the pipeline construction from obeying the us legislation.44 The sanctioned foreign subsidiary companies like 40

41 42 43 44

Cf. amongst others: J.I.W. Corcoran, ‘The Trading with the Enemy Act and the Controlled Canadian Corporation’, 14 McGill Law Journal (1968), pp. 174–208; K.M. Meessen, ‘Extraterritoriality of Export control: A German Lawyer’s analysis of the Pipeline Case’, 27 German Yearbook of International Law (1984), pp. 97–108; Y. Kerbrat, op. cit., pp. 210–212. Export Administration Amendments Act 1977, Public Law 95–52, 22 June 1977, Sect. 204. Regulations of the Trade Department, Fed. Reg. Vol. 47, No. 2, 1982, pp. 141–145. Regulations of the Trade Department, Fed. Reg. Vol. 47, No. 3, 1982, pp. 9201–06. Bernard Audit, ‘Extraterritorialité et droit international. L’affaire du gazoduc sibérien’, 72 Revue critique du droit international privé (1983), p. 404.

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Dresser France and Sensor Netherland undertook action in the us and the eu to block the implementation of the us legislation.45 In turn, the us administration implemented sanctions against six companies participating in the construction of the pipeline, leading for instance Sensor Netherland to refuse the delivery of certain material to the French company Société européenne des pétroles. Due to the strong protests that followed in Europe, the measures were rapidly waived in 1982, less than a month after having been taken. They nevertheless are a blatant example of the consequences that an expansive interpretation of the control criterion may generate in international relations and international law. The Emergence of a Customary Rule of Prohibition on the Control Criterion in the Sanctions Field This attempt to give extraterritorial effect to us legislation through the personality principle and the ‘control theory’ has not succeeded. It should first be underlined that the us itself changed its practice after the Euro-Siberian pipeline episode and adopted a self-limitation stance, illustrating the abandon of the control criterion by the us administration. For instance, the us embargo targeting Nicaragua in 1985 only applied to goods sent ‘from the us’ and the Treasury Regulations did not refer to a personal criterion of implementation.46 Similarly, the general embargo47 and freeze of official funds48 against Libya adopted in 1986 following the Rome and Vienna terrorist attacks was grounded on the International Emergency Power Act and applied to ‘United States persons’. Nevertheless, this category was interpreted by the Treasury so as not to include foreign subsidiary companies controlled by us persons. More recent examples confirm the abandon of the criterion by the us  administration, as it was neither used against Iran in 1995,49 nor against Burma50 or Sudan51 in 1997. On the same lines, the American Law Institute

3.2

45

46 47 48 49 50 51

In the us, without success: Dresser industries Inc. And Dresser (France) s.a. v. Baldridge, 549 F. Supp. 108. In the eu: European Oil Company s.a. v. Sensor Nederland B.V, The Hague District Court, 17 September 1983, English translation available in 22 International Legal Materials (1983), p. 66. Nicaragua Trade Control Regulations, 8 May 1985, Fed. Reg. Vol. 50, No. 91, pp. 19890–19895. Executive Order 12543, 7 January 1986. Executive Order 12544 8 January 1986. Executive Orders of 15 March 1995, 6 May 1995, 19 August 1997. Iranian Transactions Regulations, Treasury Department, 31 c.f.r. Part 560. Executive Order 13047, 20 May 1997. Executive Order 13067, 3 November 1997.

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considered in its third Restatement of the Foreign Relations Law of the United States that: A State may not ordinarily regulate activities of corporations organised under the laws of a foreign State on the basis that they are owned or controlled by nationals of the regulating State, reducing extraterritorial effects of the law to cases of major national interest.52 One exception to the abandon of the control criterion is to be found in the Cuba sanctions adopted in 1992. The Cuban Democracy Act53 was adopted shortly after the fall of the ussr when Russia decided to reduce its support to the communist republic. The sanctions were divided into three threads. First, the Cuban Democracy Act granted the us President the power to adopt sanctions against third countries assisting Cuba. Second, it strengthened the island’s isolation by refusing ships that have stationed in a Cuban port in the last six months access to us ports. Third, no licence would be granted to foreign companies as an exception to the Cuban Assets Regulations. The control criterion has also been contested in its very lawfulness: the Euro-Siberian pipeline case has indeed generated direct criticism on the conformity of us law with public international law. For instance, the uk considered that: The embargo in the terms in which it has been imposed is an attempt to interfere with existing contracts and is an unacceptable extension of American extraterritorial jurisdiction in a way which is repugnant in international law.54 Similarly, the memorandum addressed by the European Economic Community to the United States referring to the decision of the International Court of Justice in the Barcelona Traction Case, considered that the extraterritorial effects of the us measures were violating both the territoriality and the nationality principles, and were, therefore, wrongful in public international law.55 These official denouncements were reiterated in the context of the adoption of 52 53 54 55

Third restatement of the law, op.cit., para. 414(2) (b) (i), p. 270. Emphasis added. Cuban Democracy Act of 1992, 22 U.S.C. §§ 6001–6010. Lord Cockfield, uk Secretary of State for Trade, 2 August 1983, 21 International Legal Materials (1982), p. 851. Commission of the European Communities, Comments on the u.s. regulations concerning trade with the ussr, 21 i.l.m. (1982), p. 891.

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the Cuban Democracy Act of 1992. In its Démarche presented on behalf of the European Community member States to prevent the adoption of the legislation, Ireland stated that: “The United States has no basis in international law to claim the right to license non-United States transactions with Cuba by companies incorporated outside the United-States, whatever their ownership or control”.56 This stance was reaffirmed in 1996 in a letter of the eu Council to the us State Department: The e.u. cannot accept the prohibition for us-owned or controlled firms from financing other firms that might be involved in certain economic transactions with Cuba. The eu has stated on many occasions that the United States has no basis in international law to claim the right to regulate in any way transactions taking place outside the United States with Cuba undertaken by subsidiaries of us companies incorporated outside the us.57 Consistent with this general rejection of the control criterion at the highest level, us laws with extraterritorial effects have generally not been given effect by domestic Courts of third countries. For instance, in the Société FruehaufFrance v. Massardy case, the Paris Appelate Court considered that the French interests of the company should prevail over the ‘personal interests’ of its majority American shareholders, who were prohibited by the us Treasury from executing a contract concluded with the Popular Republic of China.58 Similarly, in the context of the Euro-Siberian Pipeline case, the Hague district Court applied Dutch law to the contract concluded by a Dutch company that was indirectly controlled by an American company, without imposing the restrictions that were foreseen in us law.59 Besides the European Union, the control criterion has also been condemned by the Organisation for Economic Cooperation and Development, including Japan and Canada, which allows the conclusion that this criterion is generally rejected by most countries other than the us.60 56

Démarche, 18 April 1990, Annex to the letter to the Members of Congress, Delegation of the ec Commission, 27 April 1990, Doc. u.n.o. A747/272. 57 Letter of 5 March 1996, 35 International Legal Materials (1996), pp. 398–399. 58 Cour d’Appel de Paris, 22 May 1965, j.c.p. (1965) ii. 14274 bis. It can be noted in this case that the us managed to obtain compliance by Société Fruehof France through the us parent company, which could be the object of execution measures in the us On this point, Y. Kerbrat, op. cit., pp. 200–210. 59 The Hague District Court, European Oil Company s.a. v. Sensor Nederland b.v., 17 September 1982, supra note 45. 60 Y. Kerbrat, op. cit., p. 208.

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The Theoretical Yet Impractical Operation of the Effects Criterion

The effects criterion has mainly been developed in the field of competition law, where it is as such considered a valid ground for the extraterritorial application of national law in limited cases. This permissive approach can also be identified in the United States and European Union practice of economic sanctions (4.1). Nevertheless, the use of the effects criterion is bound to certain conditions that might be very rarely met in the sanctions field (4.2). The Effects Criterion in Both the e.u. and u.s. Practice of Economic Sanctions States are competent to exert normative jurisdiction over persons and goods that are present on their territory. The ‘effects theory’ as expressed in the alcoa case is the most significant extension of this normative jurisdiction:

4.1

It is settled law […] that any State may impose liabilities, even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders which the State reprehends; and these liabilities other States will ordinarily recognise.61 While the effects theory has essentially been developed in the field of competition law, early on the European Commission examined whether it could generate its responsibility under us law, and especially with regard to the restrictions on oil and gas controls imposed on the ussr in 1982.62 Indeed, due to the general opposition to the control criterion and its ultimate abandon in practice, us administration had to introduce an alternative criterion to justify the extraterritorial effects of its legislation.63 This shift in us practice is particularly well illustrated by the Helms-Burton Act,64 which reacted to the destruction by the Cuban army of two civil airplanes belonging to an anti-Castro association. It provides for three threads of measures, reinforcing the pre-existing Cuba embargo of 1992, funding opposition movements, and sanctioning foreign 61 62

63 64

Circuit Court of Appeals, 2nd Cir., u.s. v. Aluminium C° of America, 12 March 1945, 148 F. 2d 416. Department of Commerce, International Trade Administration, 15 c.f.r. Parts 376, 379, 385, Amendment of oil and gas controls to the ussr; and the Commentaries of the European Community on the Amendments of June 1982 to the us legislation on exportations control (11 August 1982), already quoted. Y. Kerbrat, op. cit., p. 263. Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, 12 March 1996.

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­persons investing in properties that were expropriated from us persons by the Cuban government. These sanctions were administrative, such as for instance the withdrawal or refusal of visas, but could also be pecuniary and judiciary. Significantly, Article 302 of the Helms-Burton Statute provided that any us person claiming a property title to the confiscated goods was entitled compensation, amounting at least to its value with added damages. In this perspective, every expropriated American could trigger compensation proceedings in the us. This so-called property ‘traffic’ by non-us persons was located outside us territory and its extraterritoriality65 is explicitly justified in the Statute on the effects theory: “International law recognizes that a nation has the ability to provide for the rules of law with respect to conduct outside its territory that has or is intended to have substantial effect within its territory”. Needless to say, international reactions to the Helms-Burton Act have strongly denounced it for being contrary to international law. However, it has been argued that the denunciation is aimed at rejecting the very application of the criterion by the us administration in the specific case of the Cuban sanctions, than at condemning the use of the effects theory as such.66 Indeed in the Euro-Siberian pipeline case, the Hague District Court already seemed to admit the possibility of justifying extraterritoriality with the effects theory, on the condition that the targeted exportation operations would have direct and illegal effects in the us, thereby allowing considerate to be taken into consideration that these operations took place in the us.67 Along the same lines, official reactions to the Helms-Burton Act essentially contested the conditions of application of the effects criterion, and more particularly, besides their mere existence, their substantiality, directness and predictability. Testing the ‘Substantial’, ‘Direct’ and ‘Reasonably Predictable’ Effects of the Prohibited Conduct As noted above, the effects theory was primarily developed in the field of competition law, and the conditions that the effects on the territory must be direct, substantial and reasonably predictable are applicable in both us68 and

4.2

65 66 67 68

Contra, A. Pellet, ‘Conclusions’ in H. Gherari, S. Szurek (eds.), op. cit., pp. 321–335. Y. Kerbrat, op.cit., p. 267. The Hague District Court, European Oil Company s.a. v. Sensor Nederland B.V, 17 September 1983, supra note 45, point 7.3.4. For a historical perspective, see: the Foreign Trade Antitrust Improvements Act of 1982 (limiting the scope of the Sherman Act and the Federal Trade Commission Act), Pub. L. No. 97–290, title iv, sec. 402 and 403; Interpretation confirmed by the us Department of Justice and Federal Trade Commission in the Antitrust Enforcement Guidelines for

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in eu69 competition law. Outside the field of competition law, and more specifically applied to autonomous sanctions, these three conditions of substantiality, directness and reasonable predictability of the alleged effects may prove difficult to abide by. The substantial character of the effects of foreign practice or behaviour on the territory of the State willing to submit it to national legislation with extraterritorial effects has been debated in diverse autonomous sanctions episodes. In the context of the Euro-Siberian pipeline case, the Commission of the ec contested the substantiality of the effects of the sanctioned behaviours in the Comments addressed the us government.70 Conversely, the us government relied on the substantiality condition in the context of the discussion of the Helms-Burton Act in Congress: Under international law and established state practice, there are widely accepted limits on the jurisdictional authority of a State to ‘prescribe’, i.e., to make its law applicable to the conduct of persons, as well as the interests of persons in things. In certain circumstances a State may apply its law to extra-territorial conduct and property interests. For example, a State may do so in limited circumstances when the conduct has or is intended to have a ‘substantial effect’ within its territory.71 It is interesting to note that to the us government, the competence grounded by the Helms-Burton Act is contrary to international law: Asserting jurisdiction over property located in a foreign country and expropriated in violation of international law would not readily meet the international law requirement of prescription because it is difficult to imagine how subsequent “trafficking” in such property has a ‘substantial effect’ within the territory of the United States. It is well established that under international law ‘trafficking’ in these confiscated properties cannot affect Cuba’s legal obligation to compensate u.s. claimants for their

69 70 71

International Operations, April 1995. On the crystallisation of these conditions, cf. Y. Kerbrat, op.cit., pp. 270–272. The first application of these conditions to ex Articles 81 and 82 of the tec was made by the cfi in the Gencor Case, cf. Y. Kerbrat, op. cit., pp. 272–273. Commission of the European Communities, Comments on the u.s. regulations concerning trade with the ussr, 21 i.l.m. (1982), para. 13. ‘Legal considerations Regarding Title iii of the Libertad Bill’, 20 September 1995, quoted by Yann Kerbrat, op. cit., p. 278. Emphasis added.

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losses. The actual effects of an illegal expropriation of property are experiences at the time of the trafficking itself, not at any subsequent point. An argument that subsequent use or transfer of expropriated property may interfere with the prospects for the return of the property would be hard to characterise as a ‘substantial effect’ under international law.72 The directness and the reasonable predictability of the effects on the States’ territory are conditions aiming at verifying the causality between the behaviour that is targeted through national legislation with extraterritorial effects and the effects of this behaviour on the sanctioning State.73 The Commission of the European Communities argued, in the Comments addressed to the us government in the context of the Euro-Siberian pipeline crisis, that the directness of the effects was a sine qua non for recourse to the effects theory, and thereby contested the extraterritorial effects of us legislation targeting the ussr.74 The Hague District Court also followed this line in the Sensor case, considering that exportation of goods to the ussr, which did not come from the us and were not delivered by a us exporter cannot produce direct effects that would be forbidden in the us.75 These considerations were then applied to the Helms-Burton and D’Amato-Kennedy Acts, to demonstrate that they were contrary to international law: in the first case, the effects of the so-called trafficking of expropriated us property had a direct effect on the Cuban market, while in the second case, the sanctions against Iran and Libya were expressly meant to punish competing foreign companies.76 The reasonable predictability of the effects aims at verifying that the author of the t­ argeted 72 73

74 75 76

Ibid. Emphasis added. L. Idot, Le contrôle des pratiques restrictives dans les échanges internationaux, Ph.D. Thesis, Dir. Berthold Goldman, University Paris 2 Panthéon Assas, 1981, p. 94; E. Friedel-Souchu, Extraterritorialité du droit de la concurrence aux Etats-Unis et dans la Communauté européenne (Paris: l.g.d.j., 1994), p. 128; B. Goldman, ‘Les champs d’application territoriale des lois sur la concurrence’, 128-iii Collected Courses of the Hague Academy of International Law (1969), p. 697. Commission of the European Communities, Comments on the us regulations concerning trade with the ussr, 21 i.l.m. (1982), para. 13. The Hague District Court, European Oil Company s.a. v. Sensor Nederland B.V, 17 September 1983, supra note 45, point 7.3.4. Y. Kerbrat, op. cit., p. 285–286; quoting the spokesperson of the State Department when the Statute was passed in Congress, substantially considering that Total had replaced Conoco and concluded agreements that would have been profitable to the us company; and expressly stating the will to “punish” foreign companies that adopted such behaviours in the future.

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behaviour is aware of the effects it produces on the territory of the targeting State. It is nevertheless not certain, outside the field of competition law in which it was developed, that this condition might be required. Indeed, the condition of predictability of the effect was rejected by the International Court of Justice in the Lotus case: It has been sought to argue that the offence of manslaughter cannot be localized at the spot where the mortal effect is felt; for the effect is not intentional and it cannot be said that there is, in the mind of the delinquent, any culpable intent directed towards the territory where the mortal effect is produced. In reply to this argument it might be observed that the effect is a factor of outstanding importance in offences such as manslaughter, which are punished precisely in consideration of their effects rather than of the subjective intention of the delinquent.77 In the field of sanctions, it has been submitted that the reasonable predictability of the effects is evidently present, since the substantial and direct effect of a behaviour targeted by extraterritorial effects of national legislation would necessarily imply that the effect would be predictable.78 It stems from the above that although the effects theory is not per se contrary to international law, its transposition to the sanctions field may not be helpful, since the conditions of substantiality and directness would be very rarely met. In all other cases, which constitute the vast majority, existing State practice is therefore contrary to international law. 5

Lessons Learned from the Unsuccessful International Regulation Effort

The extraterritorial effects of national legislation imposing unilateral sanctions have generated broad protests from their indirect targets, which might have significantly contributed to an international momentum for the adoption of clearer rules under international law. Although numerous international attempts to discuss and develop such general rules may be acknowledged (5.1), the extraterritorial effects of national legislation imposing unilateral sanctions are still left to States’ subjective interpretation and power-based relations (5.2). 77 78

Permanent Court of International Justice, The case of the s.s. ‘Lotus’, supra note 21, p. 24. Emphasis added. Y. Kerbrat, op.cit., p. 288.

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5.1 The Growing Institutional Interest in Regulating Extraterritoriality As early as in 1992, in the midst of the Cuba crisis, the United Nations General Assembly (unga) adopted a resolution condemning extraterritorial sanctions: Concerned about the promulgation and application by member States of laws and regulations whose extraterritorial effects affect the sovereignty of other States, and the legitimate interests of entities or persons under their jurisdiction, as well as the freedom of trade and navigation […] 1. Calls upon all States to refrain from promulgating and applying laws and measures of the kind referred to in the preamble of the present resolution in conformity with their obligations under the Charter of the United Nations and international law.79 This position has been reaffirmed every year by the unga since 1992,80 a 13 year-long series which will probably come to an end at the 70th session in autumn 2015 following the end of us sanctions against Cuba. In 2001, the Institute of International Law twice examined a project on “The limits set by International Law to the Competence of States Over Persons under their Jurisdiction”.81 The project reaffirmed the principle of territoriality and focused on extraterritoriality as follows: iii. 1. The principles of sovereignty and of non-intervention protect a State against any interference of other States in the choice of its economic and social system. However, these principles cannot allow a State to violate internationally protected fundamental rights. […] 3. States should abstain from pursuing their own policy through means that may infringe upon the jurisdiction of other States in a manner contrary to international law. In the case of concurrent jurisdiction between two or more States, neither of those States shall abuse its power so as to further its interests to the detriment of those of other States.82 In its revised version, the draft resolution is enhanced with a 4th paragraph to point iii: 79 80

81 82

un ga, u.n. Doc. A/RES/47/19, Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba, 24 November 1992. The last resolution of the kind was adopted in the 69th session of the unga: u.n. Doc. A/ RES/69/5, 28 October 2014, Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba. Yearbook of the Institute of International Law (2000–2001), pp. 88–117. Ibid.

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4. The notion of duress cannot be limited to material acts of physical coercion performed upon a person or against property. The criterion of localisation, which is correctly applicable to such acts, cannot be extended to cover other forms of coercion, such as threats of the use of force, deprivation of property, or economic sanctions. The mere fact of uttering such threats, whose effects can only be felt on the territory of the State whose authorities voiced them, tends to exert a form of coercion on the behaviour of their targets, regardless of location, a pressure which even if indirect, remains nonetheless real.83 The draft resolution, which could not gather consensus, was in the end not adopted. More recently, in 2006, the unga was presented with the report of the International Law Commission Secretariat on ‘Extraterritorial jurisdiction’.84 It recognises that extraterritoriality is a growing issue in international law, due to the globalisation of the world economy, the increasing number of multinational companies and the rise in criminal activities cross-borders, amongst others. It also recognises that extraterritoriality is now being uncontroversially used in some fields of the law, such as competition law where the effects theory was developed. Nonetheless, extraterritoriality remains both controversial and key in at least two branches of international law: criminal law and economic law. It is from this perspective that the International Law Commission has focused on the topic, and on the opportunity of drafting a comprehensive instrument. To date however, the topic has not been put on the agenda of the Commission – probably because of the lack of consensus on the issue. A Continuing Reliance on Power-Based Relations to Secure International Legality A series of questions stem from the above considerations. It is paradoxical to note that most eminent codification organs have seized the issue of extraterritoriality since the beginning of the last decade in a context of intensified – and denounced – extraterritorial practice, without coming to a clear starting point for their work, as there has been no international consensus to actively empower them to independently study the state of international law and its possible future development. In other words, while general rejection of a specific practice (often equating to a power manifestation) is the rule, general

5.2

83 84

Ibid. Emphasis added. u.n. Doc. A/61/10, 3 November 2006, Annex E – Extraterritorial jurisdiction, Report of the International Law Commission to the United Nations General Assembly.

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engagement of the international codification organs remains impossible, short of consensus. Denunciation of wrongful extraterritorial effects may still take diverse forms, most of which have been discussed above: diplomatic denunciations, non-recognition of foreign legislation with extraterritorial effects, non-­recognition of foreign orders or judicial decisions implementing foreign legislation with extraterritorial effects, adoption of blocking statutes, adoption of claw-back statutes, adoption of judicial orders prohibiting nationals from executing foreign legislation with extraterritorial effects, and the introduction of international litigation. In the perspective of the list above, the legal mechanisms that are at stake today are not likely to help with clarifying positive law. Indeed, they all remain in the realm of inter-subjectivity, from the very imposition of unilateral sanctions through national legislation having extraterritorial effects to the official reactions of condemnation by their indirect targets. Even the refusal by domestic jurisdictions of these States to give effect to foreign legislation with extraterritorial effects does nothing more than blocking their effects on a specific territory, without entering the realm of objectivity, short of competence to pronounce on the validity of foreign legislation, in the view of international law. States themselves will prefer settlement to trial, as illustrated by the fate of the European Commission appeal to the Dispute Settlement Body in reaction to the adoption of the Helms-Burton and D’Amato-Kennedy Acts by the United States in 1996. It stems from the above that although extraterritorial effects of unilateral sanctions remain highly controversial in international law and might jeopardize some of its fundamental principles, this issue still seems to be left to the balance of power between the leading economies of the world on the one hand, and to the operation of domestic law85 to contain their effects on the other hand. 85

See, for instance, the Kiobel presumption according to which the silence of a Statute on its scope must be interpreted as a lack of extraterritorial scope. Supreme Court of the United States, Kiobel v. Royal Dutch Petroleum Co., 133S.Ct. 1659 (2013). Cf. S.H. Cleveland, ‘The Kiobel Presumption and Extraterritoriality’, 52:1 Columbia Journal of Transnational Law (2013), pp. 8–27.

chapter 6

Sanctions against Non-State Actors Nigel D. White Abstract Sanctions against non-State actors (nsas) are often assumed to be a post-9/11 phenomenon directed against terrorist organizations like Al-Qaida. By examining law and practice at un, eu and us levels, this chapter shows their earlier origins, but also shows that they were originally closely modelled on sanctions targeted at States. Moreover, as with sanctions against States, sanctions against nsas were primarily imposed to combat threats to peace and security, although there has been a move at the institutional level to include violations of international law within the conception of what constitutes a threat to international peace and security. The move towards targeting terrorist organizations has further extended the reach of sanctions, in terms of both the obligations of States and the nature and location of the targets, so that such measures have become truly global. It follows that the doctrine of counter-measures, based as it is on bilateral legal relationships between States, is incapable of providing a legal framework to regulate sanctions, so that what is needed is a clearer perception of international public order, and the norms that underpin it, as well as the sanctions that enforce compliance with those norms.

Keywords non-forcible measures – United Nations – European Union – United States – threat to international peace – law enforcement

1 Introduction The aims of this chapter are: first to contextualise the imposition of sanctions against non-State actors (nsas) – to explain the trend towards them and their goals and purposes. It considers the notion of nsas (terrorists, rebels, …) drawing a line between them and State actors, which is not as straightforward as might first appear (shown, for example, by the case of individual politicians or governmental employees). The next step is to undertake a legal doctrinal analysis

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_007

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of such measures, first in terms of their legal nature (whether they are imposed to punish illegal acts or to tackle threats to the peace), and the values they are meant to protect (security, human rights, democracy, …). The chapter then considers their legal bases (in treaties, collective countermeasures, custom, …). The legal obligations imposed by them are analysed (whether they bind members, all States, nsas themselves), and their legal effects considered (whether they criminalise, punish directly or indirectly, override existing obligations). Any legal limitations upon them are identified (from general principles of international law such as non-intervention to specific legal regimes such as international human rights law). The chapter also considers issues of implementation, oversight and enforcement of sanctions against nsas; and accountability for misapplied or overly injurious sanctions. The legal analysis is based on relevant constitutional, international and regional laws, as well as the practice of the un, the eu, and the us,1 as leading actors in the imposition of this type of measure. The aim is to consider the above issues in the light of the particular purposes, form and effects of sanctions against nsas. Several studies of paradigmatic sanctions regimes against nsas conclude the chapter, and conclusions are drawn particularly on the development of a more sophisticated legal framework to govern sanctions taken against nsas. 2

The Trend towards Sanctions against nsas

The post-Cold War period has seen a sharp move towards ‘smart’ sanctions against individuals or entities deemed responsible for breaches of international law or threats to international peace and security. This comports with a move in international law to supplement, but not replace, State responsibility with individual responsibility for breaches of international law. The main motivation has been to ensure that innocent citizens and civilians are not punished for the wrongdoings of their leaders. This is part of the move towards protecting human security alongside, but not instead of, State security and generally towards the protection of civilians.2 This trend was identified by the un’s High Level Panel in its 2004 report ‘A More Secure World’: As a result of growing concern over the humanitarian impact of comprehensive sanctions, the Security Council stopped imposing them after the 1 For more detail on eu sanctions see Chapter 4 by Marco Gestri in this volume. 2 See u.n. Doc. A/RES/66/290 (2012), containing the United Nations General Assembly’s current understanding of human security.

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cases of Iraq, former Yugoslavia and Haiti, and turned exclusively to the use of financial, diplomatic, arms, aviation, travel and commodity sanctions, targeting the belligerents and policy makers most directly responsible for reprehensible policies.3 While these new-style targeted sanctions have raised their own human rights concerns in terms of due process, rights to property, privacy and freedom of movement, they are quantitatively less than the human rights impact of punitive sanctions imposed against a State and, therefore, against the population of a State, as shown by the massive suffering caused to the people of Iraq by the collective comprehensive sanctions imposed from 1991–2003;4 and that caused to the people of Cuba by unilateral sanctions imposed by the us against Cuba from 1960 onwards.5 To quote again from the High Level Panel Report of 2004: Targeted sanctions (financial, travel, aviation or arms embargoes) are useful for putting pressure on leaders and elites with minimal humanitarian consequences, provide a less costly alternative to other options and can be tailored to specific circumstances. By isolating violators of international standards and laws, even modest sanctions measures (including sports embargoes) can serve an important symbolic purpose. The threat of sanctions can be a powerful means of deterrence and prevention.6 The High Level Panel made it clear that the move to smart sanctions had to be combined with better monitoring, implementation and enforcement to make them more effective.7 There can be little doubt that smart sanctions imposed against the regimes of Saddam Hussein or Fidel Castro would have been better for the populations of Iraq and Cuba but the question remains as to whether such measures imposed against members of a regime or government are going 3 Report of the Secretary-General’s High-level Panel on Threats, Challenges and Change, A  more secure world: our shared responsibility (u.n. Doc. A/59/565, 2 December 2004), para. 80. 4 J. Gordon, Invisible War: The United States and the Iraq Sanctions (Harvard University Press, 2010), pp. 86–102. 5 N.D. White, The Cuban Embargo Under International Law: El Bloqueo (Routledge, 2015), pp. 99–124. 6 Supra note 3, para. 179. 7 Ibid., para. 180. See also Report of the Informal Working Group of the Security Council on General Issues of Sanctions (u.n. Doc. S/2006/997, 22 December 2006).

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to affect sufficient change in behaviour as to be an adequate replacements or alternatives to general sanctions. The move towards smart or targeted sanctions is, perhaps too readily, explained as a development of more precise, more surgical measures against States, or more accurately State leaders but also against ‘elites’ within States. In a sense, such measures may be best considered as measures against State actors; given that the leaders of States are paradigmatic State agents.8 So it may be argued that they are beyond the scope of this chapter, but this really depends upon the scope of the measures: whether they are confined to paradigmatic State agents or whether they extend more broadly to cover influential and powerful persons within a State’s elite. In this instance, sanctions are a mixture of measures against State actors and nsa’s. This type of ‘mixed’ regime was initially applied to Libya in 2011, when the resolutions contained non-forcible measures against a range of individuals from the regime and from Gaddafi’s family.9 Those measures were imposed in part to fulfil the Security Council’s primary responsibility for peace and security but also, in part, as a response to crimes against humanity that appeared to have been committed in Libya, necessitating a referral to the International Criminal Court.10 As the post-­Gaddafi era in Libya descended into violence and chaos, the Security Council again found itself imposing measures against nsas in Libya (including Al-Qaida and Islamic State) on the basis of a threat to the peace, but also targeting individuals planning or committing violations of international human rights and humanitarian law.11 The confusion over whether the term nsas covers regime elites is largely due to the lack of legal definition of nsa which is, in itself, something of an ‘empty term’, comprising as it does “actors which apparently only have in common that they are not the State, and not governmental”.12 Whether spouses of Presidents or Prime Ministers of countries are State or non-State actors is a question that would potentially fill a whole chapter, but the telling question is 8 9

10 11 12

Their acts being those of the State under Articles 4 and 5, Articles on the Responsibility of States for Internationally Wrongful Acts 2001. u.n. Doc. S/RES/1970 (2011), op. paras. 15–17, explicitly invoked Article 41 of the un Charter and imposed a travel on listed individuals (members of the regime, and Gaddafi’s family), an assets freeze on individuals under a separate list (a shorter list of members of Gaddafi’s family). Ibid, op. para. 4. u.n. Doc. S/RES/2213 (2015), op. para. 11 (a). A. Peters, L. Koechlin, G.F. Zinkernagel, ‘Non-State Actors as Standard Setters: Framing an Issue in an Interdisciplinary Fashion’ in A. Peters, L. Koechlin, T. Forster, G.F. Zinkernagerl (eds.), Non-State Actors as Standard Setters (Cambridge: Cambridge University Press, 2009), p. 14.

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whether it makes any real difference to whether sanctions may be lawfully imposed on them as well as the legal parameters governing the application of such measures. As has been stated, once international law was supplemented with notions of individual responsibility as well as State responsibility for breaches of international law, there may seem to be no reason to doubt the legality of such measures. However, whereas the vast majority of breaches of international law can give rise to State responsibility there are only specific regimes, such as international criminal law and aspects of others such as international humanitarian law, the violation of which can give rise to individual responsibility. This signifies that if sanctions are imposed on individuals for a violation of international law it can only be for breach of those norms or because the violative conduct of the individual is imputable to the State. It would also have to be established that States or organizations imposing such measures have the right or duty to do so under international law. However, if sanctions are imposed in order to tackle threats to international peace presented by the activities of individuals, or groups of individuals, then there is no need to establish norm violation; the key question is then whether the State or organization imposing sanctions in such circumstances has the right or power to do so. With exceptions such as Haiti in the 1990s,13 and Libya in 2011, the un has often failed to adopt smart sanctions against State leaders (witnessed by the inconclusive debates on Zimbabwe and Syria),14 although historically it has engaged in limited sanctions against states in the form of arms embargoes, starting with that imposed against South Africa in 1977.15 The un has concentrated its targeted sanctions against non-State actors such as members of terrorist and rebel groups. Indeed, it has been argued that for the un the concept 13

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u.n. Doc. S/RES/841 (1993). Note, however, that these were imposed against the de facto authorities in Haiti i.e. a military regime that had overthrown the democratically elected (under un supervision) government of Jean-Bertrand Aristide – J.M. Farrall, United Nations Sanctions and the Rule of Law (Cambridge: Cambridge University Press, 2007), p. 326. See also targeted sanctions imposed against the military junta that had seized power from the democratically elected authorities of Haiti in 1997 – u.n. Doc. S/RES 1132 (1997). In July 2008, Russia and China vetoed a draft resolution (u.n. Doc. S/2008/447) that would have imposed an arms embargo and targeted sanctions (travel ban and assets freeze) against President Mugabe and 13 top military and government officials in Zimbabwe following a flawed and violent elections process (u.n. Doc. S/PV 5933, 11 July 2008). In October 2011 Russia and China vetoed a draft resolution (u.n. Doc. S/2011/612) that threatened measures under Article 41 against members of the Syrian regime (u.n. S/PV 6627, 4 October 2011). u.n. Doc. S/RES/418 (1977).

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of nsas is confined to such groups.16 Thus, the story of the development of smart sanctions is not simply one of a response to humanitarian concerns arising from general sanctions against States, since the un had established practice of imposing such sanctions against nsas, for example, with such measures taken against unita in 1993, before full evidence of the damage caused by comprehensive sanctions against Iraq was known. Subject to the point made above (smart sanctions taken against ‘elites’ and the difficulty of delineating State from non-State in that ‘elite’) it is important to keep in mind the distinction between smart sanctions against State actors and those taken against nsas as they arise from different political contexts. Smart sanctions against leaders of States are successors to those imposed generally against states; they are taken within the modern inter-State paradigm, while sanctions against nsas are part of the post-Cold War move towards enforcing individual responsibility in a broad sense within a post-modern paradigm where sovereignty is variable and international relations are not solely structured around the State. However, although in part a development of the idea of individual responsibility, it will be shown that un sanctions imposed against nsas primarily aim to tackle threats to peace and security posed by these actors, and not to punish those actors for breaches of international law for which they might be individually responsible, and in that way they share characteristics with sanctions imposed against States. Sanctions imposed by the us and the eu are more mixed in terms of what they are aimed at – nsa behaviour that is a threat to peace and security or behaviour that is a breach of international norms. The realisation that nsas could represent a real (existential) threat to established State actors, culminating in States and State-based organizations taking coercive measures against them, was something of a slow process. In fact, the early post-Cold War instances of sanctions against nsas were imposed against those holding power but who had not attained full status as State actors; measures in the 1990s were imposed against de facto governments (e.g. Taliban) or rebel groups with de facto belligerent status (e.g. unita).17 Even historically the first un sanctions regime was imposed against the illegitimate white racist regime in S. Rhodesia in the late 1960s, a de facto government, though the measures imposed were not targeted and had a wider impact on the population.18 16

17 18

P. Alston, ‘The “Not-a-Cat” Syndrome: Can the International Human Rights Regime Accommodate Non-State Actors?’ in P. Alston (ed.), Non-State Actors and Human Rights (Oxford: Oxford University Press, 2005), p. 17. Both discussed later in the chapter. u.n. Doc. S/RES/232 (1966).

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This shows that the first ‘generation’ of smart sanctions against nsas were pragmatically driven measures against those in control of territories even though they had not achieved recognition as legitimate leaders of States. A clear departure in the un from measures analogous to sanctions against States was only taken with the extension of the Taliban sanctions regime imposed in 1999 to Al-Qaida in 2000 and, in so doing, removing the link between Al Qaida and the territory of Afghanistan,19 which in 2011 was followed by the complete separation of the two regimes (discussed below). A contrast can be made with measures taken by the eu which, because of the narrower State consensus necessary to take decisions to impose sanctions and broader agreement on the values to be protected or promoted, shows a faster and deeper trend towards sanctions directed against regime elites (for example, in Zimbabwe and Russia),20 although lesser development has occurred as regards nsas such as terrorist groups.21 Targeted eu sanctions were initially imposed in 2002 by the Council against individuals in Zimbabwe on the basis of its assessment that the “Government of Zimbabwe continues to engage in serious violations of human rights and of the freedom of opinion, of association and of peaceful assembly”. It decided that “for as long as the violations occur the Council deems it necessary to introduce restrictive measures against the Government of Zimbabwe and those who bear a wide responsibility for such violations”.22 The eu’s measures are clearly framed as a response to a violation of international human rights standards occurring in Zimbabwe. In contrast, in the case of measures imposed by the us in relation to Zimbabwe, the initial Executive

19 20

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J.M. Farrall, United Nations Sanctions and the Rule of Law, cit., at 131. See, for example, EU targeted sanctions against regime individuals in Zimbabwe (Council Decision 2011/101/CFSP, oj L 42, 16 February 2011, p. 6) and Syria (Council Decision 2013/255/CFSP oj L 147, 1 June 2013, p. 14). Targeted sanctions were imposed against certain Russian individuals responsible for actions which undermined or threatened the territorial integrity, sovereignty and independence of Ukraine following intervention in Ukraine (Council Decision 2014/145/CFSP, OJ L 78, 17 March 2014, p. 16). Measures against Al Qaida in Common Position 2002/402/CFSP, oj L 139, 29 May 2002, p.  4; measures against individuals and entities associated with Al Qaida in Council Regulation (ec) No 881/2000, oj L 139, 27 May 2002, p. 9. See also Common Position 2001/931/CFSP oj L 344, 28 December 2001, p. 93; Council Regulation (ec) No 2580/2001, oj L 344, 27 December 2001, freezing funds and economic resources of certain persons, groups and entities with a view to combating terrorism. Restrictive measures against Zimbabwe in Common Position 2002/145/CFSP, oj L 50/1, 21 February 2002.

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Order of the President in 2003 “determined that the actions and policies of certain members of the Government of Zimbabwe and other persons to undermine Zimbabwe’s democratic processes or institutions contributing to the deliberate breakdown in the rule of law in Zimbabwe, to politically motivated violence and intimidation in that country, and to political and economic instability in the southern African region, constitute an unusual and extraordinary threat to the foreign policy of the United States”, and declared “a national emergency to deal with that threat”.23 The formula of an executive Presidential Order finding of a threat to the foreign policy and national security of the United States and declaring a national emergency to deal with the threat has been used on a number of occasions by the us to tackle a variety of perceived threats by imposing targeted sanctions against individuals and other nsas,24 although other more normative based determinations such as violations of human rights have been used by Congress to pass legislation imposing targeted sanctions as 23 24

Executive Order 13288 – Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe, 68 fr 11457, 10 March 2003. See for example: Executive Order 13611 – Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen 77 fr, 16 May 2012; Executive Order 13338 – Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria, 69 fr 26751, 13 May 2004; Executive Order 13067 – Blocking Sudanese Government Property and Prohibiting Transactions With Sudan, 62 fr 59989, 5 November 1997; Executive Order 13664 – Blocking Property of Certain Persons with Respect to South Sudan fr, 3 April 2014; Executive Order 13536 – Blocking Property of Certain Persons Contributing to the Conflict in Somalia April 13, 2010; Executive Order 13660 – Blocking Property of Certain Persons Contributing to the Situation in Ukraine, 79 fr 13493, 10 March 2014; Executive Order 13466 – Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals 73 fr 36787, 27 June 2008; Executive Order 13566 – Blocking Property and Prohibiting Certain Transactions Related to Libya, 76 fr 11315, 25 February 2011; Executive Order 13441 – Blocking Property Of Persons Undermining The Sovereignty Of Lebanon Or Its Democratic Processes And Institutions 72 fr 43499, 3 August 2007; Executive Order 12722 – Blocking Iraqi Government Property And Prohibiting Transactions With Iraq, 55 fr 31803, 3 August 1990; Executive Order 13413 – Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo 71 fr 64105, 31 October 2006; Executive Order 13396 – Blocking of Property of Certain Persons Contributing to the conflict in Côte d’Ivoire 71 fr 7389, 10 February 2006; Executive Order 13310 – Blocking Property of the Government of Burma and Prohibiting Certain Transactions 68 fr 44853, 30 July 2003; Executive Order 13405 – Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus 71 fr 35485, 20 June 2006; Executive Order 13219 – Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans, 68 fr 34777, 29 June 2001.

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well.25 The Presidential executive power to impose sanctions, derived from the International Emergency Economic Powers Act (ieepa) originally adopted in 1977,26 has been criticised on the grounds that “experience with ieepa raises concerns that it may be used casually for spurious national emergencies”.27 .

3

The Nature and Purposes of Sanctions against nsas

The legal nature of sanctions under international law, whether imposed against State actors or nsas, has not been fully agreed upon,28 and so it is important to try shed light on this while considering the nature and purpose of sanctions specifically taken against nsas. The problem for international lawyers is that while analogies with domestic legal orders can often be misleading, in general terms, sanctions are central to any legal system, whether national or international. Kelsen takes this truism and applies it to the international legal order, arguing that sanctions are an inherent component of any legal order including one providing for collective security. Kelsen wrote that “a social order guaranteeing collective security is by its very nature a legal order, and a legal order is a system of norms providing for sanctions”.29 Sanctions, for Kelsen, are “coercive reactions against an actual violation of the law”, or alternatively, against suspected or expected violations.30 This formulation does allow for some anticipatory sanctions but the trigger remains an actual or potential violation of the law. However, it is clear that in the international order, especially in its collective security component, ‘sanctions’ are not confined to actual or potential violations of international law, rather the primary triggers are actual or threatened ruptures of the peace. Kelsen accepts that legal systems generally recognise the legitimacy of coercive measures that have no relation to actual or potential violations of the law but remain necessary to maintain or restore 25

For example: S.2142 – Venezuela Defense of Human Rights and Civil Society Act of 2014, 113th Congress, (2013–2014). See also infra notes 57–58. 26 50 u.s.c. 1701–2 (1982). 27 B.E. Carter, ‘International Economic Sanctions: Improving the Haphazard u.s. Legal Regime’, 75 California Law Review (1987), 1159 at 1238. 28 F. Dopagne, ‘Sanctions and Countermeasures by International Organizations’ in R. Collins and N.D. White (eds.), International Organizations and the Idea of Autonomy: Institutional Independence in the International Legal Order (London: Routledge, 2011), p. 180. 29 H. Kelsen, Collective Security under International Law (Naval War College, 1957), p. 101. For alternative positivist views of sanctions see H.L.A. Hart, The Concept of Law (Oxford: Clarendon, 1961), pp. 91–5; J.L. Brierly, ‘Sanctions’, 17 Transactions of the Grotius Society (1932), p. 68. 30 H. Kelsen, supra note 29, at 102.

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peace and security. However, the examples given by Kelsen show that this is the exception rather than the rule within national legal orders; his examples include the forcible destruction of buildings to prevent the spread of fire, or the forcible internment of people suffering infectious diseases in order to prevent an epidemic from spreading.31 Arguably in the international order these sorts of exceptions are the norm, so that sanctions are imposed to address threats to the peace, whether or not those threats entails actual or possible violations of the law.32 However, the trend towards sanctions against nsas might be indicative of a move towards punishment for violations of the law being the primary aim, given that this development has occurred against the background of a move towards addressing individual responsibility for core crimes. The examples given in this chapter include a consideration of whether there has been a move towards sanctions being imposed for breaches of international law. Given that the overriding purpose of targeted sanctions against nsas, whether to punish or prevent, is to change the behaviour of individuals either directly (to stop them for example from committing terrorist acts) or indirectly (to influence States or nsas to stop them supporting the acts or threats that are of concern), it is important to discern whether it is behaviour that constitutes a threat or the behaviour that constitutes the crime that it the target. The intended deterrent aspect of sanctions as punishment is to prevent future breaches, whereas the deterrent effects of sanctions to tackle threats to the peace is the immediate end of the behaviour that comprises the threat. Of course the dichotomy of threat and crime is not always easy to maintain and criminal behaviour, particularly at the international level, can be a (part of) a wider threat to international peace.33 When imposing targeted measures 31 32

33

Ibid. J.L. Kunz, ‘Sanctions in International Law’, 52 American Journal of International Law (1960), p. 324, at 329. But see V. Gowlland-Debbas (ed.), United Nations Sanctions and International Law (The Hague: Kluwer, 2001), pp. 7–9. See for example u.n. Doc. S/RES/1857 (2008), op. para. 4, which, inter alia, imposed measures against: political and military leaders of foreign armed groups operating in the Democratic Republic of the Congo who impede the disarmament and the voluntary repatriation or resettlement of combatants belonging to those groups; as well as political and military leaders operating in the Democratic Republic of the Congo and recruiting or using children in armed conflicts in violation of applicable international law; and individuals operating in the Democratic Republic of the Congo and committing serious violations of international law involving the targeting of children or women in situations of armed conflict, including killing and maiming, sexual violence, abduction and forced displacement.

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against nsas in the Central African Republic, the un Security Council, acting under a general determination that the violence there constituted a threat to regional peace and stability, imposed measures against individuals who were involved in planning, directing, or committing acts that violate international human rights law or international humanitarian law;34 as well as against individuals “engaging in or providing support for acts that undermine the peace, stability or security of the car, including acts that threaten or violate transitional agreements, or that threaten or impede the political transition process, including a transition toward free and fair democratic elections, or that fuel violence”.35 Nonetheless, there is stark difference between the nature and purpose of sanctions imposed against nsas (for example members of a rebel group) aimed at bringing them to the negotiating table, and sanctions imposed on them as punishment for crimes they might have committed during their insurgency. Furthermore, analysis might reveal that it is better to separate out different forms of non-forcible measures and confine ‘sanctions’ to a narrow response to breaches of international law. Arguably such sanctions are more clearly grounded within the legal order than sanctions imposed to tackle an emergency situation arising from threats to peace and security. In this regard it may be argued that there are the equivalent of ‘non-derogable’ rights and duties, to borrow an analogy with human rights law,36 in the context of collective security responses to threats, but the legal framework is arguably pared down in international emergencies especially when the un Security Council is acting under Chapter vii of the un Charter. This is not an argument for saying that there is no international legal order, but it is suggesting that the order is weak and so there is greater discretion within it to deal with what might be called the pre-legal conditio sine qua non – that there is sufficient peace and security to preserve, or upon which to build, a legal order; what Hart might call the minimum content of natural law – ­self-evident conditions and norms of public order.37 Just as an infectious disease might temporarily justify that exercise of discretionary executive power at the national level, at the international level the equivalent of infectious diseases or rampant fires in the form of threats to international peace caused by civil wars, refugee flows, natural disasters, famine, climate change, arms proliferation, 34 35 36 37

u.n. Doc. S/RES/2134 (2014), op. para. 37 (b). u.n. Doc. S/RES/2196 (2015), op. para. 11. See Article 4 of the International Covenant on Civil and Political Rights (1966). H.L.A. Hart, supra note 29, at 188. N. Tsagourias and N.D. White, Collective Security: Theory, Law and Practice (Cambridge: Cambridge University Press, 2013), p. 221.

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and yes infectious diseases, none of which are breaches of international law per se, are unfortunately too prevalent to be dealt with as the exception within the international legal order. 4

The Legal Basis of Sanctions against nsas

Further arguments for developing a more sophisticated legal typology of sanctions can be made when considering the variety of legal bases for sanctions against nsas, ranging from measures taken under the framework of collective (international and regional) security law, to measures taken as a form of collective or unilateral countermeasures by States against influential actors within States, to forms of collective, multilateral and unilateral (criminal) punishment. The lack of clarity as to the legal basis and nature of targeted sanctions is encapsulated in the dispute about whether such measures, when imposed by the un Security Council, are administrative or preventive measures, or forms of criminal punishment.38 A preliminary consideration of sanctions against nsas would suggest that un measures, at least, are certainly focused on the threat to the peace represented by the purposes, actions and activities of the targeted nsas, rather than the punishment of individuals for actual or potential breaches of international law; while eu and other regional sanctions regimes tend to promote wider values other than peace and security, such as democracy and human rights.39 us sanctions, as stated above, are often premised on threats to national security, 38

39

See, for example, Nabil Sayadi and Patricia Vinck v. Belgium, Communication No. 1472/2006, 29 December 2008, 16 ihhr 427 where the Human Rights Committee was of the view that such measures were administrative in nature and therefore did not attract due process guarantees; while the eu Court of Justice in Joined Cases C-402/05 P and C-415/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v. Council of the European Union and Commission of the European Communities [2008] ecr I-6351, found that they did violate such rights. See, for example, Article 2(b) of the Charter of the Organizations of American States  (1948) (as amended); Article 3(g)(h) Constitutive Act of the African Union (2000); Article 3(5) Treaty on European Union (2012) (consolidated version). For the relationship between regional organizations to the un legal order, especially Article 53, which provides that regional enforcement action must be taken under the authority of the un sc, see N.D. White, ‘The eu as a Regional Security Actor within the International Legal Order’ in M. Trybus and N.D. White (eds.), European Security Law (Oxford: Oxford University Press, 2007) p. 329, where law and practice are analysed to show that non-forcible measures are not fully within the restrictions imposed by Article 53.

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although they are directed at responding to breaches of international law such as human rights law and to upholding wider values such as democracy and the rule of law. Unilateral sanctions by powerful States are imposed for a variety of reasons and under a range of legal justifications, from promoting human rights and democracy, to punishing individuals for international crimes and acts of terrorism. Unilateral sanctions, for example by the us against Cuba, are at least in part responses to breaches of international law; in that case the initial expropriations of un properties and assets by Cuba following the revolution of 1959, the interventions by Cuba in Latin America and Africa in the 1960s and 1970s, with a focus from the 1980s on the denial of democracy and civil/political rights in Cuba; but they are also clearly ideologically motivated and a product of domestic us politics and law.40 Such on-going measures raise issues of the legality of the sanctions per se: as countermeasures, more broadly as forms of economic coercion, but they clearly violate general principles of international law of non-intervention and self-determination, and also more specific norms such as and socio-economic rights.41 These are not temporary measures aimed at ending a violation of international law by Cuba, and restoring normal relations between the two states, but are aimed at the form of government in Cuba and at changing that regime.42 The question is whether unilateral sanctions targeted at nsas suffer from the same legal problems, or whether they are a ‘smarter’ form of measure designed to deter or punish those within States, and whether, as such, they operate within the confines of international law. The endemic problem even with this more precise form of sanctions is that, if they are punishment for violations of international law, they do not necessarily follow from any judicial determination of guilt, thereby rendering it automatically a violation of due process rights. This in part might explain why the us sanctions against nsas are normally taken somewhat disingenuously under executive order as an emergency response to perceived threats to national security, which us Courts (in line with many national courts) are generally unwilling to challenge.43 Nonetheless, there does seem to be a gulf between the legal nature of collective sanctions designed to tackle threats, and unilateral sanctions designed to  punish governments, regime elites and nsas. As lawyers we may want to 40 41 42 43

P.J Haney and W. Vanderbush, The Cuban Embargo: The Domestic Politics of an American Foreign Policy (Pittsburgh: University of Pittsburgh Press, 2005), pp. 1–10. N.D. White, supra note 5, at 139–44. On the limitations of countermeasures, see Articles 49–54 of the Draft Articles on State Responsibility (2001), supra note 7. B.E. Carter, supra note 27, at 1238.

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separate them for analysis, in particular by not viewing collective measures aimed at threats as ‘sanctions’ but as ‘coercive non-forcible measures’;44 leaving us free to review the legality of each: collective and coercive non-forcible measures designed to restore public order, and unilateral punitive measures that are measures of self-help taken in response to alleged breaches of international law. The question then is whether the doctrine of countermeasures is sufficient to contain and regulate sanctions;45 whereas when we are considering coercive non-forcible measures designed to tackle threats the legal parameters are potentially much broader, although it is contended they cannot disregard basic obligations of international law including those of human rights, especially ones of due diligence, applicable to the un as an international legal person and as such subject to duties under customary international law.46 As obligations of conduct not result,47 due diligence obligations would require the un to take measures to prevent, as far as possible, its actions having consequences for the human rights of the civilian population. For instance, during un sanctions against the Haitian junta in the 1990s, there was strong evidence that the regime elite benefited from the black market that sprang up to compensate for the restrictions caused by sanctions, thereby pushing the general population further into poverty.48 It is questionable whether the humanitarian exception, standard in un sanctions regimes, is enough to consider that the un has fulfilled its due diligence obligations in these cases.49 44

45 46

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48 49

Although the un sc sometimes uses the term ‘sanctions’ for its non-forcible measures imposed under Chapter vii. See, for example, u.n. Doc. S/RES/1333 (2000), op. para. 25, in which the un sc “Expresses its readiness to consider the imposition of further measures, in accordance with its responsibility under the Charter of the United Nations, with the aim of achieving full implementation of this Resolution and Resolution 1267 (1999), inter alia, taking into account the impact assessment referred to in paragraph 15 (d) with a view to enhancing the effectiveness of sanctions and avoiding humanitarian consequences”. J. Crawford, ‘The Relationship between Sanctions and Countermeasures’ in V. GowllandDebbas (ed.), United Nations Sanctions and International Law, cit., p. 57. The idea of duties of due diligence applying to the un is only just gaining traction within the un, although this does not mean that the un is not so bound. See, for example, H.P. Aust, ‘The un Human Rights Due Diligence Policy: An Effective Mechanisms against Complicity of Peacekeeping Forces?’, 20 Journal of Conflict and Security Law (2015), p. 61. S. Marks and F. Azizi, ‘Responsibility for Violations of Human Rights Obligations’ in J. Crawford, A. Pellet and S. Olleson (eds.), The Law of International Responsibility (Oxford University Press, 2010), pp. 728–9. S. Chesterman, T.M Franck and D.M. Malone, Law and Practice of the United Nations: Documents and Commentary (Oxford: Oxford University Press, 2008), pp. 359–60. But see J. Farrall, supra note 13, at 224–7, who argues that proportionality is the applicable standard.

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Further analysis of practice reveals the legal effect of sanctions against nsas, showing that they generally are applicable to (member) States when imposed by the un or regional organization, binding them under the provisions of the constitutive treaty.50 un sanctions do not have direct effect within States, it is for States to implement them within their legal orders, for example, by making it illegal to trade with the targeted nsas or requiring banks to freeze their assets, and the same is the case for regional organizations (with the eu’s legal order being exceptional in this regard). The difficulty is that these obligations are not directed at the nsa, their immediate impact is on States and then in turn upon other actors such as banks, companies and individuals, by requiring them to act in certain ways towards the nsas in order to restrict and isolate them so that their behaviour is curtailed. The focus on the State in terms of compliance with sanctions regimes is a natural result of the on-going restrictive form of international legal order based on States that has not fundamentally changed even with the advent of powerful nsas. Just as it is very difficult to make international law directly applicable to multinational businesses,51 we encounter the same problem with rebel groups, insurgents, organized criminals, terrorists etc. Just as we might quibble with the term ‘sanctions’, we also might object to the rest of the title to this chapter ‘against nsas’, because what we are really talking about, in the main, are coercive non-forcible measures placing duties upon States to take measures against nsas, most commonly indirectly (by obliging legal persons within their domestic legal, such as banks and other financial institutions, to undertake certain measures, such as the freezing of funds and assets, against the nsas under penalty for non-compliance). One interesting aspect to unravel here is the role of domestic criminal law as a weapon potentially used by States to fulfil their obligations to the un, imposed by binding decisions on matters of peace and security, although normally the un Security Council only calls upon States to bring proceedings and impose penalties against violators.52 The legitimacy of criminal sanctions being derived from measures aimed at tackling threats to the peace is enhanced if we see such measures as a response to breaches of public order norms rather than the exercise of purely discretionary power by the un Security Council which, 50 51 52

For example, Article 25 un Charter (1945); Article 215 tfeu (2012) (as consolidated). See, for example, the un’s Guiding Principles on Business and Human Rights, HR/ PUB/11/04 (2011). For example, u.n. Doc. S/RES/1267 (1999), op. para. 8, the un Security Council “calls upon States to bring proceedings against persons and entities within their jurisdiction that violate the measures imposed by paragraph 4 above and to impose appropriate penalties”.

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in turn, requires us to conceptualise ‘peace’ and ‘security’ as part of the international legal order. The Security Council has directly required States to criminalise the behaviour of nsas or their supporters within their domestic legal orders, but this was in the form of a piece of ‘legislation’ in Resolution 1373 of 2001, aimed at tackling the general threat posed by international terrorism rather than one imposing ‘sanctions’ against specific threats.53 Certainly for those sanctions imposed against nsas for the purpose of dealing with existential threats to States and their citizens, there are strong arguments that they should, at least temporarily, have priority over other obligations that States might have. Just as it might be necessary to temporarily suspend some human rights in times of genuine emergency when the life of the nation is threatened, and only for so long as it is under threat, so will it be necessary to suspend competing duties and rights when trying to tackle threats to international peace and security. The debates about Article 103 of the Charter veers between two polar interpretations of its provisions, so as to either assert supremacy over any competing or conflicting obligations including fundamental rights, or to deny its primacy altogether;54 while the approach of the European Court of Human Rights suggests a more practical approach – that the un Security Council may be able to override clearly conflicting duties and rights in certain circumstances if it is explicit about what it is doing and presumably why it is doing it.55 The fact that to date it has not done so indicates that the Security Council is not confident in fulfilling its role as an international executive tasked with protecting international public order norms. un Security Council practice in invoking the language of Article 103 is also equivocal as the case studies reveal.56 53 54 55

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u.n. Doc. S/RES/1373 (2001), op. para. 2. See generally R. Liivoja, ‘The Scope of the Supremacy Clause of the un Charter’, 57 International and Comparative Law Quarterly (2008), p. 583. ECtHR (Grand Chamber), Al-Jedda v. United Kingdom, Application No. 27021/08, Judgment of 7 July 2011; ECtHR (Grand Chamber), Nada v. Switzerland, Application No. 10593/08, Judgment of 12 September 2012. But see Bernhardt, ‘Article 103’ in B. Simma (ed.), The Charter of the United Nations: A Commentary (2nd ed., Oxford: Oxford University Press, 2002), p. 1300, where the author states, after noting the formula used whereby the un sc “calls upon” all States and other State-based actors to act in accordance with the provisions of the Resolution notwithstanding the existence of rights and obligations under treaties, agreements, contracts or licences: “It is interesting to note that the present standard formula does not expressly refer to Art. 103, but is obviously based on this Article (and Art. 25) of the Charter. At the same time the formula is broader than Art. 103 in several respects. It is not only addressed to States (to all States), but also to international and regional organizations, and it

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It must be noted too that there have been attempts by the us to assert supremacy of its unilateral sanctions in a different way, for instance those imposed against Cuba, namely by preventing other States and their nationals, as well as us companies and nationals, from trading with Cuba.57 Some us measures taken against Iran also purport to apply to foreign companies and nationals although, as with Cuba, these measures are only enforceable against foreign companies and nationals before us courts.58 These actions by the us can perhaps be seen as indicative that it has pretensions towards seeing itself, due to its power and its ideological history of exceptionalism,59 as some form of international executive with power over wider issues of peace and security, but it is questionable whether this is an accurate characterization, certainly in the case of us sanctions imposed against nsas. These are justified at least as measures under national law to tackle a national emergency and threat to the us represented by the activities of dangerous nsas. Although there is evidence of such measures being extended to foreign companies and nationals who have breached sanctions imposed against nsas,60 such extensions would seem necessary at least to make the measures effective and, in any case, are restricted in application to sanction-breakers found within us jurisdiction.61 Certainly in the case of collective sanctions, and given the mobility, as well as the foreign nationality, of most nsas, it seems inevitable that sanctions directed at them and their behaviour can only be made to work effectively if the secondary

57

58 59 60

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includes rights and obligations derived from contracts, licences and permits. In conclusion, it seems now to be generally recognized in practice that binding sc decisions taken under Chapter vii supersede all other commitments”. By the Helms-Burton Act 1996 (Cuban Liberty and Democratic Solidarity (Liberated) Act of 1996, 22 u.s.c. § 6021–609). See A. Reinisch, ‘A Few Public International Law Comments on the Cuban Liberty and Democratic Solidarity (libertad) Act of 1996’, 7 European Journal of International Law (1996), p. 545. See, for example, the Iran Sanctions Act of 1996, as Amended 50 u.s.c. § 1701 note. A. Stephanson, Manifest Destiny: American Exceptionalism and the Empire of Right (Farrar, Straus and Giroux, 1996). See, for example, Executive Order 13608 – Prohibiting Certain Transactions With and Suspending Entry Into the United States of Foreign Sanctions Evaders With Respect to Iran and Syria, 77 fr 26409, 3 May 2012. See, for example, Executive Order 13622 – Authorizing Additional Sanctions With Respect to Iran, 77 fr 45897, 30 July 2012, which, inter alia, authorised the Secretary of the Treasury, in consultation with the Secretary of State, to prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States of a correspondent account or a payable-through account by any foreign financial institution that has knowingly conducted or facilitated any significant financial transaction with the National Iranian Oil Company (nioc) or Naftiran Intertrade Company (nico).

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measures necessary to alter the behaviour of companies and individuals towards those targeted should at least be applicable to foreign nationals and companies whichever jurisdiction they enter or are located within. The problem with us sanctions against nsas is that they are often imposed unilaterally, or go beyond those measures imposed by the un Security Council, thereby subjecting foreign companies and individuals within us jurisdiction to penalties for their dealings elsewhere which have not been agreed at the international level. Nonetheless, these measures could be defensible legally if they can be seen either as the legitimate application of temporary countermeasures to enforce fundamental norms of the international community or, even more controversially, the unilateral enforcement of international public order norms. Both of these are controversial legal bases as the legality of countermeasures to enforce fundamental international laws was left open in the Articles on the Responsibility of States for Internationally Wrongful Acts of 2001,62 although there is State practice to support such a right.63 The legality of enforcing international public order norms based on unilateral perceptions of peace and security would seem to be even more problematic not only in terms of the basic rules governing coercion in international relations but also for the stability of those relations. The characterisation of sanctions as domestic measures to respond to national emergencies, as stated in us executive orders, cannot normally shield them from the international legal order as the targets are often a combination of government figures and members of regime elites in another State – in other words they are part of inter-State relations and, therefore, governed by international law. Even international terrorist organisations, though not part of State structures, are located in other countries and therefore measures aimed at them, even largely taken within domestic legal orders, are subject to the norms of international law. 5

Implementation and Accountability

The typical method of implementation used by the un Security Council for most of its sanctions regimes is the creation of a sanctions committee as a subsidiary organ, the task of which is to receive and review State reports on 62 63

Article 54 of the Draft Articles on Responsibility of States for Internationally Wrongful Acts (2001). E. Katselli-Proukaki, The Problem of Enforcement in International Law: Countermeasures, the Non-Injured State and the Idea of International Community (London: Routledge, 2010), pp. 102–209.

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implementation.64 However, this has become more sophisticated over the years, and studies show how these methods of implementation and oversight have been adapted to sanctions against nsas involving an increasing role for experts (in themselves another form of nsa).65 The Informal Working Group of the Security Council on sanctions has recommended measures to improve the effectiveness of sanctions. In 2006 it reported that: For targeted sanctions to be effective, appropriate action must be taken at all decision-making levels: the Security Council, the sanctions committee, Member States and their administrative agencies. Proper design, implementation, ongoing evaluation and follow-up of sanctions regimes are key elements that contribute to the effectiveness of sanctions.66 Further: The establishment of sanctions monitoring mechanisms is an important innovation in the structure of Security Council sanctions regimes, which has contributed to more effective sanctions implementation. Through their inquiries in States affected by sanctions, these mechanisms have shed significant light on how targeted sanctions, including arms embargoes, are implemented, as well as on various possible ways that sanctions are violated. These mechanisms have contributed to an understanding of both the nature and scope of obstacles to more systematic compliance, thereby enhancing the overall capacity of the United Nations to refine and tighten targeted sanctions measures.67 While effectiveness in targeting nsas with the specific design of stopping them from acting in ways that threaten international peace and security is ­increasing 64 65

66 67

On Sanctions Committees, see Chapter 7 by Thilo Marauhn and Ignaz Stegmiller in this volume. J. Farrall, ‘Should the United Nations Security Council Leave it to the Experts? The Governance and Accountability of un Sanctions Monitoring’ in J. Farrall and K. Rubenstein (eds.), Sanctions, Accountability and Governance in a Globalised World (Cambridge University Press, 2009), p. 191, at 209; criticises the un Security Council’s “delegation of sanctions responsibilities to independent expert bodies” as amounting to “outsourcing of its peace and security responsibilities”; and at 211 advocates the creation of permanent sanctions monitoring machinery within the un Secretariat. Report of the Informal Working Group of the Security Council on General Issues of Sanctions (u.n. Doc. S/2006/997), para. 2. Ibid., para. 17.

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we have to bear in mind the balance between effectiveness and legality. It is interesting to note how the Working Group connects the two: Sanctions monitoring mechanisms are established by the Security Council in support of subsidiary organs. As such, they are organs with different and distinct mandates, of independent, expert and non-­judiciary character, with no subpoena powers, whose primary role is to provide sanctions-related information to the relevant committees. However, given that the findings of the monitoring mechanisms (either their reports or documents or testimonies of their individual members), may be used by judicial authorities, their methodological standards may affect the credibility of the Organization.68 Given that targeted measures against nsas can be seen as situated at the interface of the international legal and political orders, challenging such measures is clearly problematic. This leads to a discussion of possible review and other mechanisms of accountability that may be available to the targets of sanctions. Under those sanctions against nsas operated by means of listing individuals or entities, the process of listing in the un is a relatively straightforward one whereby a State can request such. The relevant Committee (the 1267 Sanctions Committee for instance) then makes decisions, normally by consensus, to add to the list of targeted individuals or entities.69 Once an individual or entity is on a list the range of measures decided upon by the un Security Council are imposed by Member States carrying out their obligations under the un Charter. The “listing of individuals is conceived as an executive or administrative process on the basis of perceived security threats, rather than a judicial one” or penal one, “even though the listing results in a set of coercive measures, arguably de facto punishment, of those listed”.70 The process of delisting is seen in the un as a political one, involving diplomatic protection and, more recently, access to an ombudsperson. Nonetheless, this has not prevented some targeted individuals from successfully bringing claims before judicial bodies: national, regional, and international, on the basis that their

68 69

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Ibid., para. 19. The 1267 Committee was established by op. para. 6, u.n. Doc. S/RES/1267 (1999). On the listing process and its lack of transparency see D. Hovell, ‘The Deliberative Deficit: Transparency, Access to Information and un Sanctions’ in J. Farrall and K. Rubenstein (eds.), supra note 62, p. 92, at 93–96. N. Tsagourias and N.D. White, supra note 37, at 239.

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rights have been violated, the jurisprudence of which has been analysed elsewhere in this volume.71 In the case of targeted sanctions imposed against terrorist nsas the temporary freezing of an individual’s assets, and restricting their movements, can constitute preventive administrative measures necessary to prevent the threat from terrorism manifesting itself in indiscriminate acts of violence. As such they are not subject to due process, at least fair trial, protections. However, a number of listings appear to be almost permanent without real review, and like indefinite preventive detention, cease to be a response to an imminent existential threat but are rather forms of punishment without due process of law. There is a clear need to be able to challenge these decisions, if sanctions against nsas are to maintain their legitimacy as a modern and sophisticated form of tackling threats. There is a danger that by allowing for quasi-­permanent listings the un is endorsing a system of punishment for wrongs determined by executive organs of States and organizations without any deter­mination or trial before a court. Rather like targeted killings, the roles of judge, jury and executioner are rolled together. This is even more so as regards the auto-­ interpretation system of targeted measures triggered by un Security Council Resolution 1373 (2001) adopted after 9/11 of 2001. This piece of un Security Council law-making has legitimated the development of separate ‘lists’ of terrorists by Member States, fulfilling their obligations under that Resolution to: criminalise the financing of terrorism; freeze any funds related to persons involved in acts of terrorism; deny all form of financial support for terrorist groups; suppress the provision of safe haven, sustenance or support for terrorists.72 Given that there are no specific terrorist organisations listed in the Resolution, or by a collective process set up by the Resolution, 1373 gives States discretion to target those organisations and individuals it considers to be terrorists. In the uk, for example, the Terrorist Asset-Freezing Act 2010 gives effect to Resolution 1373 (2001) in the uk. The 2010 Act provides the uk government (hm Treasury) with powers to freeze the funds and economic resources of those suspected or believed to be involved in terrorist activities, and restricts the making available of funds, financial services and economic resources to, or for the benefit of, such persons. Resolution 1373 potentially allows States to list nsas for a wide range of reasons some of which are only very loosely connected to peace and security. The Counter-Terrorism Executive Directorate (cted) was set up by the Security Council to provide the Counter-Terrorism Committee (ctc) established by 71 72

See Chapter 8 by Monica Lugato in this volume. u.n. Doc. S/RES/1373 (2001), op. para. 2.

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Resolution 1373 with expert advice. In its Global Implementation Survey of 2009 cted identified problems within a number of States in implementing the obligations in 1373 including: the lack of definition of terrorism in domestic law (or vague or overbroad definitions); arbitrary executions and detentions; torture and ill-treatment at the investigative stage; and the return of individuals to States in violation of the principle of non-refoulement.73 6

Early Sanctions Regimes against nsas

6.1 unita in Angola As has been stated targeted sanctions against nsas are basically a post-Cold War phenomenon. The early examples are an extension of State-focused sanctions as they were directed against entities in control of territory, exemplified by the measures imposed by the un Security Council against the Angolan rebel group – unita, an armed group fighting an internecine war against other factions and then the government since the mid-1970s. By the early 1990s, with the Cold War props removed from the warring parties, signs of peace could be discerned. In Resolution 864, adopted on 15 September 1993, the un Security Council strongly condemned unita and held “its leadership responsible for not having taken the necessary measures to comply with the demands made by the Council in its previous resolutions”; and expressed determination to “ensure respect for its resolutions and the full implementation of the “Acordos de Paz””. The Security Council determined that “as a result of unita’s military actions”, the situation in Angola constituted “a threat to international peace and security”, and then proceeded to act under Chapter vii of the Charter of the United Nations. The decision was a clear response to a threat to the peace for which unita was deemed responsible. Responsibility was for the continuing threat caused by failure to comply with the peace agreement. This was made clear in the operative parts of the Resolution that decided that the measures listed in the Resolution would come into force ten days after its adoption “unless the Secretary-General notifies the Council that an effective cease-fire has been established and that agreement has been reached on the implementation of the “Acordos de Paz” and relevant resolutions of the Security Council”.74 This was an express threat of sanctions unless unita fulfilled its obligations under the peace agreement. The primary aim was to change behaviour and thereby 73 74

u.n. Doc. S/2009/620. u.n. Doc. S/RES/864 (1993), op. para. 17.

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address the threat to the peace. The aim was to secure peace not to enforce compliance with international law, except if preventing and tackling threats can be understood as a form of enforcement of international public order norms of which compliance with an ‘internal’ peace agreement is a part.75 The measures threatened by the Security Council, and then imposed when unita did not comply, initially required States to prevent the supply to unita of “arms and related matériel of all types, including weapons and ammunition, military vehicles and equipment and spare parts for the afore-mentioned, as well as of petroleum and petroleum products”.76 The sanctions matched the violations in the sense that the continuing threat had been caused by unita’s commitment to continue fighting, and the measures were aimed at cutting off its capacity to do so. Furthermore, the Security Council promised further measures including “trade measures against unita and restrictions on the travel of unita personnel”, unless the Secretary-General had reported by 1 November 1993 that an effective cease-fire had been established and that agreement had been reached “on the full implementation of the “Acordos de Paz” and relevant resolutions of the Security Council”.77 The gradual ratcheting up of pressure against unita was manifested in subsequent resolutions of the Security Council as it continued to press unita into compliance with the peace agreement and, thereby, end the threat to the peace caused by unita. It was not until 1997 that travel restrictions were put in place on all senior unita officials and their families, combined with immediate closure of unita offices around the world and a denial of unita access to aircraft.78 This could be seen as introducing an element of punishment of unita members and denial of their rights – to freedom of movement – rather than simply measures imposed to address the threat caused by unita, but such broadening of measures is inevitable if the targets refuse to comply. The realisation of the potential impact of these broader measures led to the invocation for the first time in this case of the  humanitarian exception clause, found in most sanctions regimes. In 1997 the Security Council decided that the measures did not apply to “cases of  medical emergency or to flights of aircraft carrying food, medicine, or supplies for essential humanitarian needs, as approved in advance by the Committee created ­pursuant to Resolution

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76 77 78

On the international legal status of peace agreements between a government and nsas see S. Sheeran, ‘International Law, Peace Agreements and Self-Determination: The Case of Sudan’, 60 International and Comparative Law Quarterly (2011), p. 423, at 426–31. u.n. Doc. S/RES/864 (1993), op. para. 19. Ibid., op. para. 26. u.n. Doc. S/RES/1127 (1997), op. para. 4.

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864”.79 Further measures were threatened in 1997 against unita unless it complied with its obligation to follow the peace process.80 Such measures included an assets freeze on unita and its senior officials, and an obligation to prevent the import of conflict diamonds from Angola, as well as a prohibition on the supply of mining equipment and vehicles. These were imposed by the Security Council in 1998,81 thereby trying to prevent unita using funds from the export of diamonds or other minerals to finance its continuing rebellion. It was not until 2002, some nine years after the initial application of sanctions against unita, that the Security Council was able to welcome unita’s commitment to the full implementation of the “Acordos de Paz”. Both sanctions and the monitoring mechanism were terminated in that year.82 The Security Council did not explicitly order States to place the obligations arising from these resolutions on Angola over any other conflicting treaty commitments they might have. Article 103 was invoked in non-obligatory terms by the Security Council calling upon “all States, and all international organizations, to act strictly in accordance with the provisions of the present Resolution, notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or any contract entered into or any licence or permit granted prior to the date of adoption of this Resolution”.83 Nonetheless, in order to fulfil their obligations under Charter arising from the resolutions, it is inevitable that States would have to give priority to those obligations when they conflicted with other existing international legal duties. In this vein the Security Council also called “upon States to bring proceedings against persons and entities violating the measures imposed by this Resolution and to impose appropriate penalties”.84 Again the language was not one of obligation but it is difficult to see how States could ensure compliance with their obligations unless they criminalised or otherwise outlawed (by administrative or legislative measures) and punished such behaviour. In terms of monitoring and implementation, the 1993 Resolution established a Committee of the Security Council consisting of all the members of the Council to undertake tasks of reviewing State reports on measures taken to comply with their obligations arising under the un Charter by reason of binding decisions of the Security Council and, by gathering information on violations, 79 80 81 82 83 84

Ibid., op. para. 5. Ibid., op. para. 10. u.n. Doc. S/RES/1173 (1998), op. paras. 11 and 12. u.n. Doc. S/RES/1448 (2002). u.n. Doc. S/RES/864 (1993), op. para. 20. See also u.n. Doc. S/RES/1127 (1997) op. para. 10. u.n. Doc. S/RES/864 (1993), op. para. 21.

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to report on its work to the Council with its observations and recommendations.85 The measures against unita were best characterised as non-forcible collective measures taken by the Security Council in order to tackle a threat to international peace and security caused by unita’s on-going failure to comply with the peace accords by continuing to fight, and not as a punishment for unita’s violations of the accords or rules of international law, particularly international humanitarian law. 6.2 Bosnian Serbs The division between measures imposed to confront threats to the peace and sanctions as punishment for breaches of international law appears to break down when considering those measures imposed against the Bosnian Serbs in the 1990s, the party to the conflict seen as acting most often in violation of international humanitarian law.86 While certain measures were taken on the basis that the violations of international law themselves constituted threats to the peace, particularly the creation of the International Criminal Tribunal for the former Yugoslavia (icty),87 other non-forcible measures were imposed upon the Bosnian Serb leadership for refusing to settle peacefully and to continue fighting, and so were imposed and designed to tackle the threat to the peace caused by the Bosnian Serbs continued aggression. Furthermore, the non-forcible measures taken by the un Security Council to tackle violations of international law (viz. the establishment of the icty) were not targeted at the Bosnian Serbs leadership per se but at individual violators of international criminal law (including individuals from other nsas as well as emerging States). That aspect of the threat arising from the violence in Bosnia and consisting of violations of international law was addressed by the creation of an 85 86

u.n. Doc. S/RES/864 (1993), op. para. 22. Final Report of the Commission of Experts Established Pursuant to Security Council Resolution 780 (1992), u.n. Doc. S/1994/674. 87 The icty was created by u.n. Doc. S/RES/827 (1993), which expressed its grave alarm at the widespread violations of ihl; determined that ‘this situation’ constitutes a threat to international peace and security; determined to put an end to such crimes and to take effective measures to bring to justice those persons responsible for them; “convinced that in the particular circumstances of the former Yugoslavia the establishment as an ad hoc measure by the Council; of an international tribunal for the prosecution of persons responsible for serious violations of international humanitarian law would enable this aim to be achieved and would contribute to the restoration of peace and maintenance of peace”. In other words tackling violations of international law was itself one measure taken to address a threat to the peace – see Judgment of the Appeals Chamber of the icty in the Tadic case, Case No. IT-94-1-IT, 10 August 1995, para. 19.

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international criminal tribunal with powers of punishment, while the continuing conflict and refusal to settle peacefully were addressed by a variety of non-forcible and forcible measures imposed by the Security Council. Article 41 empowers the Security Council to use a range of non-forcible measures to tackle threats, one type being ‘sanctions’ or coercive targeted measures aimed at limiting the capabilities of nsas and thereby stopping, or at least limiting, the fighting; another being an international criminal tribunal whose creation was aimed at deterring the commission of egregious violations of international criminal law, the commission of which violated human security and thereby contributed to the overall threat. The Security Council has increasingly recognised that the protection of civilians is an important function in its overall responsibility under Article 24 of the Charter to maintain and restore peace and security.88 In a decision adopted in 1994 (Resolution 942), the Security Council imposed measures after: Expressing appreciation for the efforts undertaken by the representatives of the United Nations, the European Union, the United States of America and the Russian Federation to assist the parties in reaching a settlement, Reaffirming the need for a lasting peace settlement to be signed by all the Bosnian parties, and implemented in good faith by them, and condemning the decision by the Bosnian Serb party to refuse to accept the proposed territorial settlement (S/1994/1081), Viewing the measures imposed by the present resolution and by its previous relevant resolutions as a means towards the end of producing a negotiated settlement to the conflict.89 To drive home the link between recalcitrance in the peace process with its determination of a threat to the peace, the Security Council: first expressed “its approval of the proposed territorial settlement for the Republic of Bosnia and Herzegovina which has been put to the Bosnian parties as part of an overall peace settlement”; secondly expressed “its satisfaction that the proposed territorial settlement has now been accepted in full by all except the Bosnian Serb 88 89

u.n. Doc. S/RES/1265 (1999). u.n. Doc. S/RES/942 (1994). See also u.n. Doc. S/RES/820 (1993). For us measures see Executive Order 12934, October 25, 1994 – Blocking Property and Additional Measures with Respect to the Bosnian Serb-Controlled Areas in the Republic of Bosnia and Herzegovina, stated to be not only adopted in the light of un sc Resolution 942, but containing ‘additional steps’.

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party”; and finally, strongly condemned the “Bosnian Serb party for their refusal to accept the proposed territorial settlement, and demands that that party accept this settlement unconditionally and in full”.90 The Resolution then obliged all States to undertake a range of measures to prevent ‘economic activities’ carried on within their territories by any entity, wherever incorporated or constituted, which was owned or controlled, directly or indirectly, by individuals or entities within areas of Bosnia controlled by the Bosnian Serbs. ‘Economic activities’ were defined broadly to include “all activities of an economic nature, including commercial, financial and industrial activities and transactions, in particular all activities of an economic nature involving the use of or dealing in, with or in connection with property or interests in property”.91 It was clear that the embargo did not apply to supplies for medical purposes and foodstuffs, or products for essential humanitarian needs, notified to the Sanctions Committee established by the Security Council in 1991.92 In addition to a range of other non-forcible measures designed to cripple the economy of the Bosnian Serb areas, the 1994 Resolution included an early version of the ‘listing’ process that has become emblematic of targeted sanctions in the modern era. The Security Council decided that States were to prevent the entry into their territories of members of the Bosnian Serb authorities, Bosnian Serb military and paramilitary authorities, those persons supporting Bosnian Serb forces, and those violating the measures imposed by this and a previous resolution and, further, requested that the relevant Sanctions Committee “establish and maintain an updated list, based on information provided by States and competent regional organizations, of the persons falling within this paragraph”.93 These measures were only terminated in 1996 following the Dayton Accords and the holding of peaceful elections in Bosnia.94 7

Al-Qaida: The Break with Territorially Focused Measures

One trend in un Security Council targeted sanctions against nsas, noted above, is a move towards widening the concept of ‘threat to the peace’, so that action taken to tackle the threat include measures directed at deterring or 90 91 92 93 94

u.n. Doc. S/RES/942 (1994), op. paras. 1–3. Ibid., paras. 7–9. u.n. Doc. S/RES/724 (1991). u.n. Doc. S/RES/942 (1994), op. para. 14. u.n. Doc. S/RES/1074 (1996).

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stopping the violence by nsas, and measures aimed at those responsible for violations of human rights law and humanitarian law. Although not present in the sanctions against unita, punitive non-forcible measures were included in the Security Council’s responses to the violence in Bosnia but in the form of the creation of an international criminal tribunal. This approach was developed in relation to Libya in 2011, when targeted sanctions were combined with a referral to the icc. However, in more recent episodes, sanctions (in the form of assets freezes, travel bans etc.) have been imposed on nsas either because they undermine the peace process or otherwise threaten the peace, but also if they threaten the human security of civilians, manifested in the commission of violations of international law. This is a reflection of a move towards not only securing peace within the State but also in establishing the security of individuals within it. Thus, although appearing to be a form of punishment for breaches of the law, they remain measures aimed at restoring peace and security but at the level of civilians as well as the State. As well as the examples mentioned above, whereby sanctions were taken on this basis against nsas in the dr Congo, and the car, other examples can be found in Cote D’Ivoire,95 Lebanon,96 and Sudan.97 However, in other instances, targeted measures are more clearly of the unita-type, being directed at those regime elites and nsas who have threatened the peace; for example in Guinea-Bissau,98 Iran,99 North Korea,100 Liberia,101 Sierra Leone,102 Somalia,103 Eritrea,104 South Sudan,105 and Yemen.106 The combination of State security and human security concerns is also found in un Security Council targeted measures aimed at terrorist nsas. Such measures have also shown an increasing global reach, by moving away from targeting nsas found within specific States (although the measures themselves, such as the travel ban or assets freeze should be applied by all States), to targeting them wherever they are found, reflecting the global 95 96 97 98 99 100 101 102 103 104 105 106

For example, u.n. Doc. S/RES/1572 (2004), op. para. 9. For example, u.n. Doc. S/RES/1636 (2005), op. para. 3. For example, u.n. Doc. S/RES/1591 (2005), op. para. 3(c). u.n. Doc. S/RES/2048 (2012), op. para. 6. For example, u.n. Doc. S/RES/1737 (2006), op. paras. 10,12. For example, u.n. Doc. S/RES/1718 (2006), op. para 8 (c). For example, u.n. Doc. S/RES/1343 (2001), op. paras. 2, 5–7. For example, u.n. Doc. S/RES/1132 (1997), op. para. 5. For example, u.n. Doc. S/RES/1844 (2008), op. paras. 1, 3. For example, u.n. Doc. S/RES/1907 (2009), para. 14. u.n. Doc. S/RES/2206 (2015), op. para. 6. For example, u.n. Doc. S/RES/2140 (2014).

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nature of certain terrorist networks. Initially, however, the anti-terrorist measures were more confined. Security Council sanctions against the Taliban and Al-Qaida originated in the late 1990s, with Security Council Resolution 1267 (1999) being adopted specifically in response to the harbouring of Al-Qaida by the Taliban regime in Afghanistan, and more generally as measures against international terrorism essential for the maintenance of international peace and security. Al-Qaida had already established its global terrorist credentials before September 2001 by its attacks on the us embassies in Tanzania and Kenya in 1998, mentioned in the preamble of Resolution 1267. The Resolution was directed at the Taliban for harbouring Al-Qaida and for refusing to extradite them. If the Taliban did not comply with the Security Council’s demands to cease harbouring Al-Qaida, to take measures against them, and to hand Osama bin Laden over to countries where he had been indicted, the Security Council required all States to freeze funds owned and directly controlled by the Taliban, specifically to: Freeze funds and other financial resources, including funds derived or generated from property owned or controlled directly or indirectly by the Taliban, or by any undertaking owned or controlled by the Taliban, as designated by the Committee established by paragraph 6 below, and ensure that neither they nor any other funds or financial resources so designated are made available, by their nationals or by any persons within their territory, to or for the benefit of the Taliban or any undertaking owned or controlled, directly or indirectly by the Taliban, except as may be authorized by the Committee on a case-by-case basis on the grounds of humanitarian need.107 The Security Council called upon “all States to act strictly in accordance with the provision of this Resolution, notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or any contract entered into or any licence or permit granted prior to the dates of coming into force of the measures”. Again the reference to the supremacy of un obligations seems to be softened by the non-mandatory language whereby States are “called upon” to act in accordance with those obligations notwithstanding any inconsistent obligations; nonetheless those obligations, including ones of 107 u.n. Doc. S/RES/1267 (1999), op. para. 4 (b). Under op. para. 6 the 1267 Committee was established also to receive and consider information supplied by States on compliance and violations, and to designate individuals to be subject to the measures taken under op. para. 4.

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­ rioritization, exist for States following a decision to impose measures under p Chapter vii, by virtue of Articles 25 and 103 of the un Charter. Its choice of language indicates that the Security Council recognises that the obligations to comply and to give priority to its decisions come from the Charter not from the organ directly.108 The measures would cease to apply as soon as the Taliban complied with its obligations under the Resolution.109 un sc Resolution 1333 (2000) extended these measures beyond members of the de facto government of Afghanistan to clear nsas, namely Osama bin Laden and “individuals and entities associated with him as designated by the Committee”, including those in Al Qaida. As well as an assets freeze, and being denied access to finances and arms, members of Al Qaida and its supporters were, if listed, also subject to travel bans. The relevant paragraph required States: To freeze without delay funds and other financial assets of Usama bin Laden and individuals and entities associated with him as designated by the Committee, including those in the Al-Qaida organization, and including funds derived or generated from property owned or controlled directly or indirectly by Usama bin Laden and individuals and entities associated with him, and to ensure that neither they nor any other funds or financial resources are made available, by their nationals or by any persons within their territory, directly or indirectly for the benefit of Usama bin Laden, his associates or any entities owned or controlled, directly or indirectly, by Usama bin Laden or individuals and entities associated with him including the Al-Qaida organization and requests the Committee to maintain an updated list, based on information provided by States and regional organizations, of the individuals and entities designated as being associated with Usama bin Laden, including those in the Al-Qaida organization.110 108 D.W. Bowett, ‘Judicial and Political Functions of the Security Council and the International Court of Justice’ in H. Fox (ed.), The Changing Constitution of the United Nations (British Institute of International and Comparative Law, 1997), pp. 79–80. 109 u.n. Doc. S/RES/1267 (1999), op. paras. 4, 7, 14. 110 u.n. Doc. S/RES/1333 (2000), op. para. 8 (c). On eu measures see Council Common Position 2002/402/CFSP concerning restrictive measures against Usama bin Laden, members of the Al-Qaida organisation and the Taliban and other individuals, groups, undertakings and entities associated with them and repealing Common Positions 96/746/CFSP, 1999/727/CFSP, 2001/154/CFSP and 2001/771/CFSP oj L 139, 29 May 2002, p. 4. Amended by Common Position 2003/140/CFSP (oj L 53, 28 February 2003, p. 62) (exceptions) and Council Decision 2011/487/CFSP (oj L 199, 2 August 2011, p. 73) (amendment of title and

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Resolutions 1989 and 1988 of 2011 finally separated the measures against the Taliban from those against Al-Qaida, thereby completely severing the nexus between Afghanistan and Al-Qaida, with the sanctions first imposed in Resolution 1267 being applied by the 1267 Committee to Al-Qaida,111 while Resolution 1988 created a new committee to administer those targeted measures directed at the Taliban.112 The targeted measures against the Taliban became more specifically directed at bringing them to the negotiating table.113 It is interesting to note that review by the ombudsperson established by un sc Resolution 1904 in 2009 only applies to those on the Al-Qaida Sanctions List as administered by the 1267 Committee and not to any lists beyond that, including the Taliban list. This seemingly curious anomaly is probably explained by the scope). Most recently amended by Commission Implementing Regulation (eu) 2015/167 of 3 February 2015 amending for the 225th time Council Regulation (ec) No. 881/2002 imposing certain specific restrictive measures directed against certain persons and e­ ntities associated with the Al Qaida network oj L 28, 4 February 2015, pp. 40–41 (to update the Al-Qaida terrorist blacklist to bring it in line with recent revisions by the United Nations Security Council Sanctions Committee). Council Regulation No. 881/2002/EC imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (ec) No. 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan oj L 139/9, 29 May 2002, p. 9. On us measures see, for example, Executive Order 13224 – Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, 66 fr 49079, 24 September 2001. 111 u.n. Doc. S/RES/1989 (2011); reaffirms the assets freeze, travel ban and arms embargo affecting all individuals and entities on the 1267 Committee’s Al-Qaida Sanctions List. Decides to split the Consolidated List, after “noting with concern the continued threat posed to international peace and security by Al-Qaida and other individuals, groups, undertakings and entities associated with it”. 112 u.n. Doc. S/RES/1988 (2011); imposes an assets freeze, a travel ban and an arms embargo on individuals, groups, undertakings and entities associated with the Taliban in constituting a threat to the peace, stability and security of Afghanistan as designated by the Committee on the List established pursuant to Resolution 1988 (2011). 113 u.n. Doc. S/RES/2160 (2014), op. para. 13 of which “Underlines the importance of a comprehensive political process in Afghanistan to support peace and reconciliation among all Afghans, invites the Government of Afghanistan, in close coordination with the High Peace Council, to submit for the Committee’s consideration the names of listed individuals for whom it confirms travel to such specified location or locations is necessary to participate in meetings in support of peace and reconciliation…”.

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overarching pragmatism of the Security Council on the matter of accountability for wrongly listing individuals; that complaints to international, regional and judicial bodies have derived largely from the 1267 list and the office of the ombudsperson is a response to that.114 The lack of remedies elsewhere in the un system, for wrongly listed individuals, puts the creation of the ombudsperson in perspective, but it also fits the prevalent view in the Security Council that such measures are administrative ones taken in response to an international threat caused by the activities of international terrorist organisations and, therefore, any remedial measures should only be of a controlled administrative nature. However, as argued above, long-term listing constitutes a form of punishment that raises issues of legal remedies based on violations of due process norms found located in the international human rights obligations of States. 8 Conclusion Sanctions against nsas are now commonplace and they follow a distinct pattern in types of measures, whether imposed by the un, eu or us. They are taken in response to threats to peace and security, although once one moves away from un measures, the purposes and values protected may become broader and but are potentially not necessarily in the collective interest. Quite often international, regional and national measures are targeted at the same nsas but there may be differences in content and scope. Furthermore, consensus on taking such measures is harder to attain at the un level than at the regional and, even more so, the national level, leading to autonomous regional and national measures, and raising questions about their compatibility with international laws governing non-forcible measures. The doctrine of countermeasures, which after all is confined to-State-to State responses but, moreover, is concerned with responses to violations of international laws not with threats to peace and security, is inadequate as a legal basis for many non-forcible measures taken at the sub-un level. While there is room for collective measures taken to uphold international norms of public order at the regional level as well as the un level, there are doubts about States unilaterally imposing such 114 See criticism of the unevenness of access to remedies by Kimberly Prost in a briefing by the Ombudsperson at the Security Council’s Open Debate on ‘Working Methods of the Security Council’ (S/2014/725): Enhancing Due Process in Sanctions Regimes (23 October 2014), available at http://www.un.org/en/sc/ombudsperson/pdfs/SCBriefing23Oct2014 .pdf (accessed 5 June 2015).

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measures, even though they may be presented as responses to threats to that particular State. However, unlike some instances of unilateral sanctions imposed against States such as Cuba that do incur international censure,115 other unilateral sanctions taken against nsas seem to be endured if not explicitly accepted as lawful. Aspects of the sanctions regimes against nsas are grounded in the existing State-based international legal order, by being a natural extension of sanctions regimes of the past imposed against States as a whole (for example Iraq and Serbia). Such sanctions regimes target those in power, regime elites, de facto authorities or rebels holding territory. The nexus to State-like authority and territory is clear. However, sanctions against nsa terrorist organizations or networks with genuine global reach are more challenging. Although they are clearly premised on protecting international public order norms and values, their scope and reach is potentially greater as the un, regional organizations, and powerful States attempt to extend their application and effectiveness to tackle nsas whose raison d’etre is to challenge the existing international legal order. International legal structures and processes are emerging to achieve these aims but it will be a number of years before the developments that started with sanctions against unita and the Bosnian Serbs not only address the threat represented by groups such as Al-Qaida, and the self-proclaimed Islamic State that operates across the Middle East,116 but also do so in a way that is coordinated and fully in accordance with international law. Indeed, there needs to be greater precision and clarity on the legal parameters and specific norms under which nonforcible measures, sanctions and countermeasures in the collective interest can be taken. While it is easy to accuse powerful States of disregarding international norms, the fact is that there is a lack of progressive thinking on how to achieve a system of sanctions against nsas that empowers but also limits sanctioning in ways that protects internationally agreed norms and values. A first step would be to clarify the nature and content of international public order norms aimed at promoting peace and achieving security (both the security of States and that of civilians – i.e. State security and human security) and, by so doing, place non-forcible measures more squarely in the international legal order 115 See, for example, u.n. Doc. A/RES/67/4 (2012); eu, ‘Demarches Protesting the Cuban Liberty and Democratic Solidarity Act’, 35 ilm (1996), p. 397. 116 In 2014 the un Security Council started imposing targeted sanctions against Islamic State – see u.n. Docs. S/RES/2170 (2014); S/RES/2178 (2014); S/RES/2199 (2015).

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than at present where their invocation is a matter of politics, although their effects are increasingly being judged in legal bodies at national, regional and international levels. What is clear is that to be both effective and lawful there needs to be a greater assimilation of international, regional and national responses to terrorists networks and other nsas that represent threats not only to innocent individuals but to the existing international order.

chapter 7

Sanctions and the Protection of Human Rights: The Role of Sanctions Committees Thilo Marauhn and Ignaz Stegmiller Abstract Sanctions committees have been established to improve the effectiveness and the efficiency of sanctions imposed by the un Security Council, in particular when dealing with non-State actors. These committees share the Council’s character as political organs; however, over time they have acquired normative and administrative powers as subsidiary organs of the Council. Apart from selecting specific targets of un sc sanctions these powers have contributed to improving the fairness of sanctions regimes. Having gradually obtained a role in implementing procedural safeguards to respect the rights of non-State addressees of sanctions and to avoid arbitrary decisions, sanctions committees have to some extent compensated the lack of judicial control over such listings. In sum, sanctions committees enhance the fairness of sanctions regimes but do not serve as a review mechanism in light of human rights standards. They remain political, though embedded in a law-like procedural framework.

Keywords sanctions committee – smart sanctions – targeted sanctions – human rights – judicial review – fairness

1 Introduction Sanctions committees have been established to facilitate the administration, monitoring and implementation of sanctions imposed by the un Security Council.1 Normally, sanctions committees are tailor-made subsidiary bodies of

1 For an early account see P. Conlon, ‘Lessons from Iraq – the Functions of the Iraq Sanctions Committee as a Source of Sanctions Implementation Authority and Practice’, 35 Virginia Journal of International Law (1995), p. 633. For a general overview and for insights into the

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the Council, set up to serve the particular sanctions regime adopted.2 As a matter of routine, they are easy to identify by the number of the resolution on the basis of which they were created. Over time two major shifts in the roles performed by these committees can be identified: First, initially sanctions committees managed economic sanctions direc­ ted against States; with the increasing move towards targeted or smart sanctions, their focus shifted towards individuals.3 Second, sanctions committees moved from effectiveness to fairness and from mere administration to rule of law-based governance. This reflects the growing concern about human rights implications of targeted or smart sanctions.4 In the following, this chapter will highlight the institutional setting of sanctions committees, discussing their legal basis, their composition, and their mandates; furthermore, it will provide an overview of human rights-related practice of sanctions committees and critically review their contribution in so far. The main hypothesis is that sanctions committees enhance the effectiveness and the fairness of sanctions regimes but do not (and perhaps will never) serve as a review mechanism for sanctions regimes in light of human rights standards. They remain political, though embedded in a quasi-judicial procedural framework. 2

Legal Basis

On 29 May 1968, as part of un sc resolution 253 (1968) on Southern Rhodesia, a sanctions committee was established. According to para. 20 of un sc resolution 253 (1968), the committee was established “in accordance with rule 28 of the provisional rules of procedure of the Security Council”. Rule 28 simply practice of the un Security Council see the pertinent website . 2 The Council’s basis for the creation of subsidiary organs is Article 29 of the un Charter: “The Security Council may establish such subsidiary organs as it deems necessary for the performance of its functions”. 3 A. Howlett, ‘Getting “smart”: Crafting Economic Sanctions that Respect all Human Rights’, 73 Fordham Law Review (2004), p. 1199. 4 M. Bothe, ‘Security Council’s Targeted Sanctions against Presumed Terrorists – the Need to Comply with Human Rights Standards’, 6 Journal of International Criminal Justice (2008), p. 541.

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­ rovides: “The Security Council may appoint a commission or committee or a p rapporteur for a specified question”, thereby relying upon Articles 29 and 41 of the un Charter. Article 29 of the un Charter reads: “The Security Council may establish such subsidiary organs as it deems necessary for the performance of its functions”, and Article 41 of the un Charter simply equips the Council with broad powers to “decide what measures not involving the use of armed force are to be employed to give effect to its decisions”. This was the first sanctions committee established. The committee was dissolved on 21 December 1979, when the sanctions were terminated.5 The second pertinent example concerned the implementation of sanctions against South Africa based upon un sc resolution 421 (1977). The Council’s terminology was precisely the same: “Decides to establish, in accordance with rule 28 of its provisional rules of procedure, a Committee of the Security Council” (para. 1). The most recent sanctions committee, at the time of writing, concerns the situation in South Sudan. Para. 16 of un sc resolution 2206 (2015) follows its predecessors: “Decides to establish, in accordance with rule 28 of its provisional rules of procedure, a Committee of the Security Council”. In most cases, the resolutions imposing sanctions, in a separate paragraph, include an explicit decision of the Council “to establish a Committee”. Occasionally, such decision is included in a subsequent resolution adopted by the Council. Committees share the political nature of the Security Council as such.6 3 Composition Apart from the very first sanctions committee,7 their composition has been the same as the composition of the un Security Council at the time of its establishment. In essence, all the members of the Council are represented on the Committee. Some have accordingly described the Committees as “Committees of the Whole”.8 5 un sc Resolution 460 (1979). 6 A. Pellet and A. Miron, ‘Sanctions’ in R. Wolfrum (ed.), The Max Planck Encyclopedia of Public International Law (Oxford: Oxford University Press, 2013), margin note 41. 7 The Committee established in pursuance of resolution 253 (1968) of 29 May 1968 concerning the question of Southern Rhodesia. 8 R. Thakur, The United Nations, Peace and Security: From Collective Security to the Responsibility to Protect (Cambridge: Cambridge University Press, 2006), p. 153.

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Normally, there is a rotating system for the chair on the basis of informal elections, however, excluding the permanent un sc members from the offices of chair and vice-chair. In order to keep in line with the two-year term of office of non-permanent members of the Security Council, membership of sanctions committees has likewise been on the basis of a two-year term of office.9 Occasionally, the sanctions committees are assisted by panels of experts.10 4 Mandates Due to the ad hoc nature of sanctions committees their mandates have varied over time. Since sanctions committees assist the Security Council to implement a particular sanctions regime, their mandates depend on the nature, objectives and content of the sanctions regime. Hence, the primary source for identifying the mandate is the original resolution setting up the sanctions regime.11 However, often these regimes have evolved over time and their content has changed on the basis of subsequent resolutions.12 This has to be borne in mind, when assessing the mandates to be fulfilled by the respective sanctions committees. It is important to note that pertinent resolutions are by no means comprehensive in ascertaining the various committees’ mandates. As the un Security Council has often delegated powers to the committees,13 their practice has likewise shaped their mandates, however, within the limits of un sc authority and subject to un sc supervision. It would be a misperception to consider such practice, however, as a form of self-authorization. The committees have never been entitled to transgress the powers provided by the Security Council; any action beyond such Council authorization would have been ultra vires.

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A. Pellet and A. Miron, supra note 6, margin note 41. By way of example, the sanctions committee established pursuant to un sc resolution 2140 (2014) on Yemen receives assistance in monitoring the implementation of the measures from such a panel of experts, whose tasks are set out in para. 21 of the said Resolution and in para. 21 of un sc Resolution 2216 (2015). See, among others, un sc Resolutions 733 (1992) and 751 (1992) concerning Somalia (as further developed on the basis of Resolutions 1356 (2001) and 1844 (2008)). One of the most pertinent examples is the evolution of the sanctions regimes based upon un sc Resolution 1267 (1999). A. Kolliopoulos, ‘Les Comités des Sanctions de l’Organisation des Nations Unies’ in L. Picchio-Forlati and L.-A. Sicilianos (eds), Economic Sanctions in International Law/Les sanctions économiques en droit international (Leiden: Nijhoff, 2004), pp. 567, 572.

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Notwithstanding the many differences between sanctions committees, they share some common features. Some of them will be highlighted in the following. 4.1 Reporting Probably the most common feature of mandates of sanctions committees has been their examination of reports produced by the un Secretary-General. In addition, they have themselves reported on the implementation of sanctions. Through their respective chairs sanctions committees have presented oral reports to the un sc. On the basis of their analysis of reports and their own reporting, sanctions committees have sometimes made proposals aimed at improving the effectiveness of sanctions regimes.14 Occasionally, they have proposed their expansion and further development. One might describe this part of their mandates as political, since their reporting function directly contributes to the development of sanctions regimes by the un sc. 4.2 Handling Exemptions Increasingly, sanctions regimes curbing trade relations have had to address the problem of humanitarian and related exceptions, ensuring food and medical supply.15 Applications for such exceptions, approval of pertinent applications and the monitoring of their implementation have normally been in the hands of sanctions committees. This involved the identification of supplies not covered by the sanctions regime as well as the consideration of humanitarian needs to be respected by the Council. Also included was the consideration of situations covered by Article 50 un Charter, which reads: “If preventive or enforcement measures against any State are taken by the Security Council, any other State, whether a Member of the United Nations or not, which finds itself confronted with special economic problems arising from the carrying out of those measures shall have the right to consult the Security Council with regard to a solution of those problems”. 14

15

This has not always been successful; the need for linking effectiveness and legitimacy has been strongly put forward by A. Bianchi, ‘Assessing the Effectiveness of un Security Council’s Anti-terrorism Measures’, 17:5 European Journal of International Law (2006), p. 881 (see, in particular, pp. 900–903). R. Geiß, ‘Humanitarian Safeguards in Economic Sanctions Regimes – a Call for Automatic Suspension Clauses, Periodic Monitoring, and Follow-up Assessment of Long-term Effects’, 18 Harvard Human Rights Journal (2005), p. 167.

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In contrast to reporting, this can be considered more or less an administrative part of the mandate of sanctions committees.16 Even though some political discretion may be involved in the handling of exceptions within the broader framework of the sanctions regimes, this does not touch upon the sanctions regime as a whole. 4.3 Sanctions Monitoring Building upon and related to the reporting function, many sanctions committees have additional been assigned the task of monitoring the implementation of sanctions regimes. Some of this monitoring comes close to more refined mechanisms of compliance control, extending from reporting, across fact-finding to a tentative assessment of compliance with the regime. Indeed, sanctions committees have considered information about sanctions violations and they have even recommended appropriate measures to redress such situations.17 In at least one instance,18 a sanctions committee was explicitly tasked to investigate reports of violations of sanctions. Compared to the above two functions performed by sanctions committees the monitoring function entails both administrative and political responsibilities. As can be taken from a comparative perspective at compliance control,19 the procedural part of the monitoring performed by sanctions committees tends to be administrative in nature, whereas the recommendations to redress sanctions violations move into the political sphere. 4.4 Administration of Targeted Sanctions With the development of targeted sanctions,20 the role of sanctions committees has further grown. Sanctions committees have moved from an ­instrumental 16

More generally, see the pertinent title and analysis of the contribution by René Urueña, ‘International Law as Administration – the un’s 1267 Sanctions Committee and the Making of the War on Terror’, 4 International Organizations Law Review (2007), p. 321. 17 On the conceptual notions see Jutta Brunnée, ‘Compliance Control’ in G. Ulfstein, T. Marauhn and A. Zimmermann (eds.), Making Treaties Work (Cambridge: Cambridge University Press, 2007), p. 373. 18 This was the case of the sanctions committee established pursuant to un sc Resolution 864 (1993) concerning the situation in Angola, para. 22, lit. d: “To make periodic reports to the Security Council on information submitted to it regarding alleged violations of the measures imposed by paragraph 19 above, identifying where possible persons or entities, including vessels, reported to be engaged in such violations”. 19 See supra note 17. 20 G. Lysén, ‘Targeted un Sanctions: Application of Legal Sources and Procedural Matters’, 72 Nordic Journal of International Law (2003), p. 291. For a critical account see Joy Gordon, ‘Smart Sanctions Revisited’, 25 Ethics & International Affairs (2011), p. 315.

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to a decisive role in the specification and identification of individuals and entities against which smart sanctions were to be applied. In this context, sanctions committees have taken on a continuous responsibility, not just setting up pertinent lists but also maintaining them. As can be taken from pertinent studies, sanctions committees have not been limited to the identification of addressees, but have increasingly been charged with a number of practical matters in the operation of sanctions regimes, such as the designation of aircraft and points of entry in the application of travel sanctions, the designation of funds in the application of financial sanctions, and the information of States about all such decisions in order to uphold the effectiveness of the sanctions regimes. This has even been described as a form of secondary normative power.21 The more individuals became addressees of sanctions regimes, the more sanctions committees had to address the humanitarian impact of sanctions. Apart from reporting on the impact of sanctions, unintended side effects resulting from the application of sanctions had to be taken up. Over time this has contributed to the development of the informal ombudsman or review procedure in light of human rights concerns when applying smart sanctions. 5

Addressing the Human Rights Implications of Sanctions Regimes

Human rights considerations and the ensuing review procedure have eventually contributed to improving the fairness of sanctions regimes,22 thus balancing the needs of collective security on the one hand and those of human rights protection on the other.23 Having gradually obtained a role in implementing procedural safeguards to respect the rights of non-State addressees of sanctions and to avoid arbitrary decisions, sanctions committees have to some extent compensated the lack of judicial control over such listings. From 2005 onwards, a number of resolutions have included procedural ­safeguards to protect the rights of the persons listed and to avoid arbitrary 21 22

23

A. Kolliopoulos, supra note 13, p. 568. See A. Ciampi, ‘Security Council Targeted Sanctions and Human Rights’ in Bardo Fassbender (ed), Securing Human Rights? Achievements and Challenges of the un Security Council (Oxford: Oxford University Press, 2011), p. 98. For further discussions see C.A. Feinäugle, ‘The un Security Council Al-Qaida and Taliban Sanctions Committee. Emerging Principles of International Institutional Law for the Protection of Individuals?’ in Armin von Bogdandy et al. (eds.), The Exercise of Public Authority by International Institutions (Berlin: Springer, 2010), p. 101. A. Tzanakopoulos, ‘Collective Security and Human Rights’ in E. De Wet and J. Vidmar (eds.), Hierarchy in International Law (Oxford: Oxford University Press, 2012), p. 42.

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decisions.24 The primary focus and the testing ground has been the most farreaching sanctions regime adopted until now, namely the one concerning Al Qaeda and associated individuals and entities as emerging from un sc resolution 1267.25 Emerging from pertinent un sc decisions, States proposing listings have to illustrate their motivation in order to enable sanctions committees to decide on the appropriateness of the listing.26 As a consequence, today sanctions committees have to publish the lists on their websites, and they have to provide information on the States of residence of the listed person. In addition, they have to notify the listing to the individual and a periodic review of listings has now been set up.27 Furthermore, individual persons listed can indirectly submit their case to the sanctions committee, by addressing the so-called Focal Point, which is a bureau that was established on the basis of un sc resolution 1730 (2006) in order to receive pertinent applications and files.28 On top, a third-party review was introduced: un sc resolution 1904 (2009) established the Office of the Ombudsperson and un sc resolution 1989 (2011) strengthened its role. Individuals, and entities subject to sanctions on the 1267 Consolidated List, now have the possibility to submit a request for delisting to an independent and impartial Ombudsperson, appointed by the un SecretaryGeneral. This Ombudsperson is empowered to collect information and material, in order to start a dialogue with the person listed. Such dialogue may eventually involve the State concerned. At the end, the Ombudsperson drafts a report and submits a recommendation to the committee on the request for delisting. While the recommendation as such is not binding, should the 24 25

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27 28

See, among others, un sc Resolutions 1730 (2006), 1735 (2006), 1822 (2008), 1904 (2009), 1989 (2011). On the 1267-Committee and its operations see, among others, Peter Wittig, ‘Making un Sanctions Work: Germany’s Chairmanship of the Al-Qaida/Taliban Sanctions Committee of the un Security Council’, 55 German Yearbook of International Law (2012), p. 561; see also René Urueña, supra note 16. Most important in this regard is un sc Resolution 1617 (2005), para. 4: “Decides that, when proposing names for the Consolidated List, States…shall provide to the Committee a statement of case describing the basis of the proposal”. For further details see A. Pellet and A. Miron, supra note 6, margin note 43. un sc Resolution 1730 (2006), para. 1 provides: “Adopts the de-listing procedure in the document annexed to this resolution and requests the Secretary-General to establish within the Secretariat (Security Council Subsidiary Organs Branch), a focal point to receive de-listing requests and to perform the tasks described in the attached annex”. For more information on the focal point see the Council’s pertinent website at .

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c­ ommittee not follow the recommendation, the matter can be referred to the Security Council.29 All these procedural improvements have tremendously contributed to enhancing transparency of the work of the un Security Council.30 6 Evaluation How does this change the role of the sanctions committees and how does this impact the effectiveness and the fairness of sanctions regimes? It has been argued that these developments should not be exclusively read in a human rights perspective but rather as a step towards establishing rule of law-based governance in the administration of sanctions.31 Whether this is really a convincing assessment may be put into question by the following considerations: Sanctions committees have obtained a rather powerful position in the implementation of sanctions regimes. They specify and detail the more or less general framework established by the un Security Council. The implementation of these sanctions regimes by the sanctions committees entails law-­ making elements (a kind of delegated law-making) and administrative elements. The administrative part of their work must indeed respect basic principles of good governance. However, by addressing the human rights implications of the imposition of smart sanctions as a matter of international administrative law, the political nature of pertinent decisions are pushed to the back seat. This is highly ­problematic 29

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For a comprehensive analysis, see G.L. Willis, ‘Security Council Targeted Sanctions, Due Process and the 1267 Ombudsperson’, 42 Georgetown Journal of International Law (2011), p. 673; see also G. Sullivan and M. de Goede, ‘Between Law and the Exception. The un 1267 Ombudsperson as a Hybrid Model of Legal Expertise’, 26 Leiden Journal of International Law (2013), p. 833. A. Tzanakopoulos, ‘Transparency in the Security Council’ in A. Bianchi and A. Peters (eds.), Transparency in International Law (Cambridge: Cambridge University Press, 2013), p. 367. See, among others, M. Kanetake, ‘The Interfaces Between the National and International Rule of Law – the Case of un Targeted Sanctions’, 9:2 International Organizations Law Review (2012), p. 267. For a more general and relatively early account and analysis of the un sc’s approach to the rule of law see J.M. Farrall, United Nations sanctions and the Rule of Law (Cambridge: Cambridge University Press, 2007). The Council’s efforts to further develop sanctions regimes, as illustrated by un Doc. S/2006/997, will have to continue for the sake of both effectiveness and legitimacy.

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both from the perspective of the effectiveness of sanctions regimes and from the perspective of protecting and safeguarding the human rights of those affected by such regimes. The balancing of imposing sanctions and of protecting human rights standards is a matter that should not be handled in the backyard or behind closed doors. There are, indeed, good reasons to impose harsh sanctions against individuals from the perspective of peace and security; and in most circumstances, pertinent human rights guarantees entail limitations clauses. Furthermore, the un Security Council is a political and not a judicial body, and nothing else applies to sanctions committees. Indeed, the Council should handle substantive human rights considerations itself in an open discourse, providing outer limits for the implementation of sanctions regimes by sanctions committees. Procedural safeguards, however, are best dealt with by an ombudsperson, not by the various sanctions committees; the ombudsperson is the best protection against wrong listings. Lawyers and political scientists should understand the risks of de-politicizing certain decisions, enabling decision-makers to hide behind true or perceived standards of global administrative justice. They should pinpoint where the conflict lines are – and they should not weaken the ever-more important mechanism for the maintenance of international peace and security by opening a platform for quasi-political discourse in administrative disguise. Sanctions committees and an ombudsperson will only be able to safeguard minimum standards in respect of human rights. Given the central importance of maintaining international peace and security, and of addressing the terrorist challenges through State-based international organizations, the un, and the Security Council, should neither be deprived of their political discretion nor of their legitimacy.

chapter 8

Sanctions and Individual Rights Monica Lugato Abstract This chapter focuses on the legal relationship between individual rights and targeted sanctions adopted by the un Security Council, particularly in the field of counterterrorism. It addresses the question of the individual rights entitlements of the targeted individual or entity within the applicable international legal framework, arguing that not only it is an important question as such, but that it raises systemic issues, like those concerning the legal limits to the powers of the Security Council in enacting targeted sanctions under Chapter vii; and of the relationship, from a legal point of view, between the deciding authority – the Security Council – and the implementing ­authority – States or regional organizations. It criticizes the thesis that targeted sanctions decided by the Security Council under Chapter vii displace member States human rights obligations beyond what human rights law itself prescribes.

Keywords targeted sanctions – human rights – primacy of un Charter obligations – conflicting international obligations

1 Introduction This paper focuses on the legal relationship between individual rights and targeted sanctions adopted by the un Security Council. Mainly it will consider targeted counterterrorism sanctions, that is, asset freezes, travel bans and arms embargoes, imposed by the Security Council on terrorists, persons and entities suspected of terrorism and persons and entities associated with them. There is by now a bulk of cases concerning these measures, and they seem to have been a model for further ‘smart’ sanctions imposed on government ‘élites’ and persons and entities associated with them, as a reaction against nuclear proliferation or other major violations of international law, in favour of the protection of civilians, democratisation, and processes of State building. These latter sanctions raise a number of specific problems in international law, such as

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regarding the immunity of States and State officials or their precise nature as State or non-State sanctions.1 For present purposes, however, it is worth recalling a recent judgment of the European Court of Justice, according to which, from the point of view of the individual rights, the problems raised by targeted sanctions are not that different whatever their purpose may be.2 Although recourse to this typology of measures has been dictated by the concern for the dramatic effects of country sanctions on innocent populations,3 their adverse impact on the rights of the targeted persons and entities has in turn become a serious issue. Sustained commentary and the pertinent case law have allowed the initial conundrum concerning the legal accommodation of the interests at stake to be overcome. However, many questions, specific and systemic, remain unanswered: the (substantial) shift from country sanctions, on which the Charter of the United Nations is modelled, to targeted sanctions, directed at individuals and groups, has destabilized, to a certain extent, the legal acquisitions concerning the sanctioning powers of the Security Council and their legal regime. Questions of the individual rights entitlements of the targeted individual or entity within the applicable international legal framework; of the legal limits to the powers of the Security Council in enacting targeted sanctions under Chapter vii; of the respective attributions of deciding authority – the Security Council – and implementing authority – States or regional organizations, remain unsettled. It is the purpose of this chapter to add a few reflections to the on-going debate and, specifically, to criticize the thesis that targeted sanctions displace member States human rights’ obligations beyond what human rights law itself prescribes. After some schematic preliminary observations, the first section of the paper will provide a synthetic overview of the relevant practice on targeted sanctions and human rights; the second will discuss the applicable legal framework. 1 See Chapter 1 by Natalino Ronzitti, Chapter 6 by Nigel White and Chapter 9 by Daniel Joyner in this volume. 2 See eu Court of Justice, Iran Transfo v. Council, Case T-392/11, Judgment of 16 May 2013: as far as the intensity of judicial review of targeted sanctions is concerned, the aim of restrictive measures is not influential (paras. 35–37). The case law to which the paper refers is accessible online on the website of the courts concerned. 3 D. Cortright, G.A. Lopez, L. Gerber-Stelllingwerf, ‘The Sanctions Era: Themes and Trends in un Security Council Sanctions since 1990’ in V. Lowe, A. Roberts, J. Welsh, D. Zaum (eds.), The United Nations Security Council and War. The Evolution of Thought and Practice since 1945 (Oxford: Oxford University Press, 2008), p. 205 ff. Committee on Economic, Social and Cultural Rights, General Comment No. 8 (1997), The relationship between economic sanctions and respect for economic, social and cultural rights, u.n. Doc. E/C.12/1997/8, 12 December 1997.

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Some Preliminary Points

Some preliminary points can be briefly set out. First, it is nowadays generally recognised that targeted sanctions heavily impact the individual rights of targets; to take but one of the most recent judicial statements on the matter, “restrictive measures adopted under Regulation No. 881/2002 have substantial negative consequences and a considerable impact on the rights and freedoms of the persons covered”.4 In the case law, the European Union judicature, the European Court of Human Rights and some national courts have come to recognise this, in relation to restrictive measures directed at different purposes (counter-terrorism, non-proliferation, democratisation, protection of civilians), and in relation to both measures decided by the Security Council and eu or national autonomous measures. Second, the individual rights at stake are primarily the right to effective judicial protection with its corollaries,5 i.e., the right to be informed of the reasons underlying listing, the right to defence, to be heard, to have access to evidence, freedom of movement,6 the right to respect for personal and family life,7 the 4 eu Court of Justice (Grand Chamber), Case C-239/12 P, Abdulbasit Abdulrahim v. Council and Commission, 28 May 2013, para. 70, concerning eu implementation of sc sanctions directed at persons and entities associated with Usama bin Laden, Al-Qaida and the Taliban. An interesting discussion of this judgment, from the point of view of the Security Council, can be found in the Seventeenth report of the Analytical Support and Sanctions Monitoring Team submitted pursuant to resolution 2161 (2014) concerning Al-Qaida and associated individuals and entities, (S/2015/441, 16 June 2015). Particularly severe opinions as to the human rights ‘deficit’ of targeted sanctions, have been pronounced both by the Supreme Court of the uk (infra note 7) and by the Federal Court of Canada (infra note 6). 5 As is universally known among international law and European Union law scholars, a notable contribution in this regard has been offered by the case-law of the European Court of Justice and General Court, starting with the notorious Kadi ‘i’ decision of 2008: eu Court of Justice (Grand Chamber), Yassin Abdullah Kadi and Al Barakaat International Foundation v. Council and Commission, Joined Cases C-402/05 P and C-415/05 P, 3 September 2008; eu General Court, Yassin Abdullah Kadi v. Commission, Case T-85/09, 30 September 2010; and Kadi ‘ii’: eu Court of Justice (Grand Chamber), Commission and United Kingdom v. Yassin Abdullah Kadi, Joined Cases C-584/10 P, C-593/10 P and C-595/10 P, 18 July 2013. 6 Human Rights Committee, Views on Communication No. 1472/2006, Nabil Sayadi and Patricia Vincks, 29 December 2008, u.n. Doc. CCPR/C/94/D/1472/2006; Federal Court of Canada, Abousfian Abdelrazik v. The Minister of Foreign Affairs and The Attorney General of Canada, 4 June 2009. 7 See ECtHR (Grand Chamber), Nada v. Switzerland, 12 September 2010; Supreme Court of the  uk, Her Majesty’s Treasury (Respondent) v. Mohammed Jabar Ahmed and others (fc) (Appellants); Her Majesty’s Treasury (Respondent) v. Mohammed al-Ghabra (fc) (Appellant)

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right to personal freedom,8 the right to property9 and proportionality.10 However, it must be borne in mind that this is simply descriptive of current practice and by no means a limit to further individual rights issues arising. Worth mentioning, within recent developments, are the right to life vis-à-vis restrictions on the payment of ransoms,11 freedom of expression vis-à-vis measures to counter the spread of terrorist violence12 and freedom of movement and the right to return to one’s country vis-à-vis measures to counter foreign fighters.13 The individual right to compensation for harm suffered as a consequence of listing is also an issue: whilst up until recently such claims had generally been dismissed, the General Court (of the European Union) has recently decided in favour of an applicant claiming moral damages (while rejecting for lack of evidence the claim concerning material ones).14 Arguably, this question will increasingly surface in the practice of national and international courts. Third, relevant in a discussion on sanctions and individual rights, though overlooked, is that the official texts concerning targeted counter-terrorism sanctions generally, if not consistently, address the issue of sanctions and individual rights, by calling upon States to ensure their ‘robust implementation’ while abiding by international law and human rights, humanitarian and refugee law. The call has come from the un General Assembly and from the Special

R  (on the application of Hani El Sayed Sabaei Youssef ) (Respondent) v. Her Majesty’s Treasury (Appellant), 27 January 2010. 8 E.g., ECtHR, Nada. Claims concerning the violation of the right to personal freedom have so far not been upheld. 9 Kadi i and ii (supra note 5), ECtHR, Al Dulimi and Montana Management Inc. v. Switzerland, 26 November 2013 (referred to the Grand Chamber 14 April 2014); eu General Court (Seventh Chamber), Iranian Offshore Engineering and Construction Co. v. Council, Case T-95/14, 25 June 2015. 10 Cases Kadi i and ii, Nada; eu General Court, Iranian Offshore Engineering & Construction Co. v. Council, Case T-95/14, 25 June 2015. 11 sc Res. 2133 (2014); Conclusions of the Council of the European Union, 23 June 2014, www .consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/143318.pdf; Monitoring Team, Fifteenth Report, S/2014/41, paras. 10, 20 and 35–38. 12 Committee of Ministers of the Council of Europe, Declaration sur la liberté d’expression et d’information dans les médias dans le contexte de la lutte contre le terrorisme; Déclaration conjointe des Ministres de la culture de l’Union éuropéenne sur la liberté d’expression, Riga/ Paris, 15 janvier 2015. 13 sc Res. 2178 (2014). 14 eu General Court, Safa Nicu Sepahan v. Council, Case T-384/11, 25 November 2014. Previous damages claims had been rejected: see, in particular, the judgment of the (then) Court of First Instance (Seventh Chamber) in the case T-341/07, Jose Maria Sison v. Council, 30 September 2009, paras. 110–111.

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Rapporteur on Human Rights while countering terrorism, but also from States and from the Security Council itself. In our view, it is an element of interpretation that should be kept present in any reasoning on the legal regime of targeted sanctions in respect of individual rights.15 3

Case Law and Practice: An Overview

So far complaints against targeted sanctions have been brought at un, regional and national level and have concerned both sanctions decided by the Security Council under Chapter vii and national and regional restrictive measures. Litigation concerning ‘smart’ sanctions decided by the Security Council under Chapter vii has been more problematic due to the primacy of the Security Council’s binding Resolution under Articles 25 and 103 of the un Charter, coupled with the initial lack and subsequent ineffectiveness of un remedies. In fact, human rights complaints by targeted individuals or entities, against listings based upon Security Council Chapter vii Resolutions, have initially been rejected by national and regional courts, mainly with the argument that the un member State’s obligation to implement Security Council Chapter vii Res­ olutions, under Article 25 of the un Charter, prevails over its human rights obligations, on the basis of Article 103 of the un Charter.16 Subsequent to the leading judgment by the Grand Chamber of the eu Court of Justice in the Kadi (i) case, in 2008,17 the approach changed: regional and national courts would review national implementation measures rather than the Resolutions imposing the sanctions.18 This allowed them to avoid confronting 15 See further details in paragraph 3.2 and, on its legal significance infra, paragraph 4.3. 16 Cf. eu Court of First Instance, T-315/01, Kadi v. Council and Commission, and T-306/01, Yusuf and Al-Barakaat International Foundation v. Council and Commission, 21 September 2005; Tribunal fédéral Suisse, Nada c. Département fédéral de l’économie, 1A 45/2007, 14 November 2007 and D. c. Département fédéral de l’économie, 2A 785/2006, 23 January 2008 (Oxford Reports on International law in Domestic Courts, available online); and although not concerning targeted sanctions, House of Lords, R (on the application of Al-Jedda) (fc) (Appellant) v. Secretary of State for Defence (Respondent), 12 December 2007. 17 eu Court of Justice, Kadi i (supra note 5). 18 The corresponding judgments (supra note 4 and note 9) have been the object of abundant commentaries: references and discussion in M. Lugato, ‘Sono le sanzioni individuali incompatibili con le garanzie processuali?’, Rivista di diritto internazionale (2010), p. 309 ff., and Id., ‘Diritto alla tutela giurisdizionale, sanzioni individuali contro il terrorismo internazionale e giudici dell’Unione europea’, La legislazione penale

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directly Article 103 of the un Charter and to assess implementing measures in the light of human rights provisions under the national constitution,19 under human rights treaties,20 under the regional organization’s founding treaty.21 Having regard to eu courts, this approach brought their case law concerning judicial review of the acts of the institutions implementing Security Council binding Resolutions in line with their case law on autonomous sanctions,22 which, being ‘purely’ internal acts of the Union, had not fallen prey to Article 103 and were from the start reviewed for compliance with the fundamental rights provision of the eu legal order.23 The European Court of Human Rights has adopted an analogous approach in this respect, holding that national acts implementing Security Council’s sanctions are subject to review as to their compatibility with the European Convention on Human Rights. According to Strasbourg judges, given the lack of equivalent protection at un level, Con­ tracting Parties have to adopt a harmonizing interpretation of the obligations at stake, based on a presumption that the Security Council would not impose on member States the obligation to infringe human rights, unless ‘clear and explicit language’ to the contrary was used. In its recent case law, the European Court of Human Rights has found that the discretion available to the Contracting State at the implementation stage allowed conflict with human rights obligations to be avoided, that is, respect for the individual rights of the target to be ensured.24

19 20 21 22

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(2012), p. 359 ff. In the perspective here under discussion, see the recent, valuable analysis by R. Kolb, L’article 103 de la Charte des Nations Unies, rcadi, Tome 367 (2013), pp. 9–252, comprehensively scrutinizing the origins, meaning and function of the provision; adde, A. Tzanakopoulos, Disobeying the Security Council (Oxford University Press, 2011). Federal Court of Canada, Abousfian Abdelrazik, supra note 6. Human Rights Committee, Sayadi and Vincks v. Belgium, supra note 6. Starting with the mentioned leading Kadi i decision (supra note 5), paras. 299 and 326 specifically. eu Court of Justice, Kadi ii (supra note 5), paras. 138–139. See also Information by eeas and the Commission on the implications of the recent Court cases on eu sanctions policy, Non Paper of 4 November 2013. See Chapter 4 by Marco Gestri in this volume. For a critical analysis of eu litigation on sanctions cases up to 2011 and further references, see M. Lugato, ‘Diritto alla tutela giurisdizionale, sanzioni individuali contro il terrorismo internazionale e giudici dell’Unione europea’, supra note 18. ECtHR (Grand Chamber), Al-Jedda v. The United Kingdom, 7 July 2011; Nada, paras. 175–180 (supra note 7); Al Dulimi, paras. 117–120 (supra note 9) (compare with Behrami and Saramati, para. 148).

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3.1 United Nations Practice The Security Council has acknowledged the shortcomings of the so-called smart sanctions under human rights law. Since 2006 it has introduced a number of mechanisms to ensure fair and clear procedures for listing and delisting, as well as for granting humanitarian exceptions (according to a mandate entrusted on it by multiple sources).25 Resolution 1730(2006) established the Focal point for delisting, amended a number of times in the following years: it receives de-listing requests for all sanctions regimes except for the Al-Qaida one; and it also receives requests for humanitarian exemptions. Under Resolution 1904 (2009), the Security Council established the Office of the Ombudsperson to deal with de-listing requests for the Al-Qaida sanctions list. Within a set time frame, such requests are the object of an impartial assessment by the Ombudsperson – through a gathering of information phase and a dialogue with the interested party phase – and then of a report where the Ombudsperson recommends maintaining the person/entity on the list or, vice versa, delisting. Following recent amendments to the procedure,26 in case the Ombudsperson recommends maintaining the person or the entity on the list, that assessment is final; whereas if delisting is recommended, it can be overturned by consensus in the Sanction Committee or, if that consensus is lacking, it becomes effective in 60 days, unless any Member of the Sanctions committee decides to refer the matter to the Security Council. The Focal point and the Ombudsperson represent improvements of the preexisting situation, which did not contemplate any remedy at un level for listed individuals or entities. However, the prevailing view in judicial decisions is that neither can be equated to an effective remedy. On the Ombudsperson, in particular, which is the more effective of the two, courts have taken the position that it is no substitute for judicial review and it does not afford an effective remedy:27 therefore as long as effective and independent judicial review is not ensured at the un, courts have held that it is ‘essential’ that the targeted 25

26 27

E.g., Report of the High Level Panel on Threats, Challenges and Change, ‘A more secure world: our shared responsibility’, u.n. Doc. A/59/65, 4 December 2004, paras. 178–180. On the role of the Sanctions Committees, see Chapter 9 by Thilo Maraun and Ignaz Stegmiller in this volume. sc Res. 1989 (2011). See notably eu Court of Justice, Kadi i, paras. 323–325 and Kadi ii, paras. 133, 134 (supra note 5); ECtHR, Al Dulimi, para. 120 (supra note 9); the uksc in the Ahmed and Others case, the Federal Court of Canada, in Abdelrazik, shared the same position. The view is also shared by the Special Rapporteur on human rights in the fight against terrorism: in his 2012 Report (u.n. Doc. A/67/396) he recommended in particular that the views of the Ombudsperson on listing and delisting be made binding; that her mandate be extended;

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individuals/entities could refer to regional or national courts to examine any measures taken in application of the sanctions regime.28 Basically, issues remain with its limited mandate (Al-Qaida sanctions list only), lack of independence in decision-making (the Ombudsperson’s decision on delisting is not final but subject to executive review) and access to evidence (no access to confidential evidence is ensured). Also relevant is the fact that a decision to delist is legally different from a judicial decision of annulment of a listing, entailing, from the point of view of the affected individual or entity, substantially more limited effects, as for example the Grand Chamber of the eu Court of Justice has emphasized in its Abdulrahim judgment. A further significant element in the practice of the Security Council is that some of its resolutions on targeted sanctions addressing in particular international terrorism reaffirm “the need to combat by all means, in accordance with the Charter of the United Nations and international law, including applicable international human rights, refugee and humanitarian law, threats to international peace and security caused by terrorist acts, stressing in this regard the important role that the United Nations plays in leading and coordinating this effort”.29 The same call has been steadily reiterated by the General Assembly: the un Global Counter-terrorism Strategy recognizes that fighting terrorism and respecting human rights are “not conflicting goals but complementary and mutually reinforcing aims” and commits to “take measures aimed at addressing violations of human rights and to ensure that any measures taken to counter terrorism comply with their human rights obligations”. According to the Global Counter-Terrorism Strategy Review, adopted on 24 June 2014, “any measure taken by States to combat international terrorism must fully comply with their obligations under international law including the Charter of the United Nations, in particular the purposes and principles thereof, and relevant that a ‘sunset clause’ be added to individual listings and that procedural transparency be increased (para. 22). 28 ECtHR, Al Dulimi, para. 134, supra note 9. The view that an ‘appropriate review process’ of Security Council’s listings and de-listings should be created at the un level is defended by M. Bothe, ‘Security Council’s Targeted Sanctions against presumed Terrorists: The need to comply with Human Rights Standards’, 6:3 Journal of International Criminal Justice (2008), p. 541 ff. and Id., Chapter 2 in this volume. 29 E.g., cf., the recent sc Res. 2161 (2014), “recalling” the previous counter-terrorism Resolutions, beginning with sc Res. 1267 (1999). The formula is found in sc Res. 1269 (1999), fourth recital of the preamble, and is routinely inserted either in the preamble or in the operative part of the majority of Resolutions imposing targeted counter-terrorism sanctions, as from sc Res. 1456 (2003). On the relevance of these “compatibility clauses”, infra, paragraph 4.3.

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international conventions and protocols, in particular human rights law, refugee law and international humanitarian law”.30 At the Sixty-ninth session of the Legal Committee of the un, under agenda item 107 relating to “Measures to eliminate international terrorism”, several delegations identified “commitments to the protection of fundamental freedoms and the rule of law” as “essential elements in the fight against terrorism” and underscored the need for strict observance of the Charter of the United Nations and international law, including human rights, humanitarian and refugee law, as well as due process in countering terrorism.31 This is difficult to reconcile with the idea that human rights are displaced by these Resolutions.32 3.2 State Practice As far as State practice is concerned, it can usefully be observed, for present purposes, that whereas some States have strongly advocated that the Security Council’s targeted sanctions Resolutions require unconditional implementation by States,33 others have engaged in a number of State-led initiatives aimed at improving sanctions (design and procedures), from the point of view of the protection afforded to the rights of the listed individuals or entities.34 It is also worthwhile to recall that official statements abound, at the national and at the regional level, stressing that the fight against terrorism has to comply with human rights standards. In 2014, States adopted by consensus the aforementioned General Assembly Resolution 68/276 on The United Nations Global Counter-Terrorism Strategy Review, showing that they had no objections to its content. By so doing they “recognized” once again that “international cooperation and any measures taken by Member States to prevent and combat terrorism 30

31 32 33

34

The United Nations Global Counter-Terrorism Strategy Review, adopted at its sixty-eigth session, 24 June 2014, u.n. Doc. A/Res/68/276. Cf. eighth preambular paragraph and paras. 5 and 11; see also u.n. Doc. A/Res/60/288, 8 September 2006. Explicitly also ga Res. 60/1, 2005 World Summit Outcome, 24 October 2005, para. 85. Summary of Work, Sixty-ninth session, Measures to Eliminate International Terrorism, Agenda item n. 107, (available at http://www.un.org/en/ga/sixth/69/int_terrorism.shtml). Infra, Section 4. See the position of Bulgaria, Finland, France, Italy, Luxembourg, Hungary, The Nether­ lands, Slovakia, Spain and the uk in the Kadi litigation; and the position of France and the United Kingdom in the Nada case in front of the European Court of Human Rights. They are summarized in the sc Special Research Report, un Sanctions, 25 November 2013, 6, and discussed in D. Cortright and G. Lopez, ‘Reforming Sanctions’ in D.M. Malone (ed.), The un Security Council: From the Cold War to the 21th Century (Boulder, c.o.: Lynner Reinner, 2004), p. 173 ff.

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must fully comply with their obligations under international law, including the Charter of the United Nations, in particular the purposes and principles thereof, and relevant international conventions and protocols, in particular human rights law, refugee law and international humanitarian law”.35 Note the explicit references, first, not only to States but also to “international cooperation”, as bound to “fully comply” with human rights obligations, and, second, to “relevant international conventions and protocols”, suggesting that the call does not concern general international law only but includes treaty law. According to the us Department of State – and notwithstanding a “more decentralized and geographically dispersed terrorist threat” – “[d]efeating a terrorist network requires us to work with our international partners to disrupt criminal and terrorist financial networks, strengthen rule of law institutions while respecting human rights, address recruitment, and eliminate the safe havens that protect and facilitate this activity. In the long term, we must build the capabilities of our partners and counter the ideology that continues to incite terrorist violence around the world”.36 In a motion passed on 1 March 2010, the Foreign Policy Commission of the Swiss National Council (the lower house of the federal parliament) requested the Federal Council to inform the un Security Council that as from the end of 2010 it would no longer unconditionally apply restrictive measures on individuals under the counter terrorism Resolutions.37 In the official statement concerning its sanctions policy, both as far as autonomous and un measures are concerned, the eu states that “[r]estrictive measures must respect human rights and fundamental freedoms, in particular due process and the right to an effective remedy in full conformity with the jurisprudence of the eu Courts”.38 Another significant feature of the above mentioned practice is the emphasis laid on the fact that implementation of the measure is a “principal responsibility 35 36

Supra note 30. Italics added. See also specifically, paras. 13, 33 and 37 of the Resolution. Digest of United States Practice in International Law (Office of the Legal Adviser United States Department of State, 2013), at 35, available at http://www.state.gov/documents/ organization/226409.pdf. The United States have recently expressed concern on the reluctance of the eu to ‘develop factual records that withstand rigorous judicial scrutiny’ and called upon it to introduce mechanism enabling examination of factual information: see L. Norman, ‘u.s. Weighs in on Problems with eu Sanction Regimes’, The Wall Street Journal, 30 January 2015. The newly adopted Rules of Procedure of the General Court now contain a provision on ‘Treatment of information or material pertaining to the security of the Union or that of one or more of its Member States or to the conduct of their international relations’: see Rules of Procedure of the General Court, Art. 105, oj 23 April 2015, L 105, p. 37. 37 ECtHR, Nada, para. 63. 38 Cf., http://eeas.europa.eu/cfsp/sanctions/index_en.htm, emphasis added.

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of the Member States”, while acknowledging the “important role” that international organisms, in primis the complex un apparatus on counter-terrorism have, “in facilitating and promoting coordination and coherence in the implementation of the Strategy at the national, regional and global levels and in providing assistance, upon request by Member States, especially in the area of capacity-building”.39 4

The Applicable International Law

The case law and practice summarised above suggest that both the authority deciding sanctions and the authority implementing them have to abide by international law including human rights, humanitarian law and refugee law measures. As a result, acts not complying with the indicated standards will be open to challenge by the individuals or entities concerned, in front of bodies having the competence to effectively address their human rights claims. The problem of protecting individual rights of persons and entities targeted by Security Council’s Chapter vii Resolutions, lies in the uncertainties concerning the legal relationship between on the one hand the obligation to accept and carry out Security Council’s Chapter vii Resolutions (Article 25 of the un Charter) in combination with the primacy of un Charter obligations established by Article 103 of the same; and, on the other hand, the human rights obligations incumbent on all actors involved, if based upon different sources and having different scope. 4.1 The Obligation to Respect Human Rights In our view, it cannot reasonably be held that the United Nations can in their actions disregard human rights to a greater extent that States can. “[T]o enhance the human condition” has been correctly indicated, with reference to the Security Council, as “the second pillar of its mandate”.40 The United Nations is bound to respect human rights under customary law (in as much as it is not derogated by the Charter or it is peremptory),41 which applies to the un as a 39 40 41

E.g., un ga Res. 68/276, supra note 30, para. 6. In a similar vein, Digest of United States Practice in International Law, 2013, supra note 36, at 35 f. D. Cortright, G. Lopez, Reforming Sanctions, supra note 34, p. 167. The approach was defended by the (then) Tribunal of First Instance in its first decision on Kadi, subsequently annulled by the Court of Justice (supra note 4) and is shared by the Swiss federal Tribunal: cf. its decisions in the Nada and the Al Dulimi and Montana cases (supra note 7 and 9, respectively). On the primacy of Charter obligations over general

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subject of international law, and under the Charter’s Articles 1(3), 55 and 56.42 Article 24(2) of the un Charter explicitly makes the “Principles and Purposes” of the Charter binding upon the Security Council. The general, and according to some views, undetermined nature of these provisions does not, in our view, deprive them of significance for the purposes of the present discussion: in fact, they appear to be a sufficient legal basis to argue that the un, and its organs, are bound, as a minimum, by a general principle of respect for human rights while performing the tasks assigned to them by the Charter.43 In addition, the general principles expressed in those provisions have been remarkably developed and detailed both in customary law and in the subsequent shared practice of the Organization, which, as is well known, continually shapes the legal meaning of the provisions of an international organization’s founding treaty. Within this framework, “one does not have to be a genius to conclude […] that the Security Council itself has to respect human rights” even when it acts for the maintenance of peace and security.44 Thus the Organization is not free of human rights constraints and as far as core human rights are concerned, their respect is to be included among the obligations under the Charter. Arguably, in the area under discussion, the mentioned general statements that the fight against terrorism has to abide by international law, international human rights, humanitarian and refugee law, provide sufficient evidence that un organs acknowledge that their action (and the action of member States) is limited accordingly. As a consequence, it is doubtful that the Security Council

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44

international law, see R. Kolb, L’Article 103 de la Charte des Nations Unies, supra note 18, at 213 ff. See ECtHR (Grand Chamber), Case of Al-Jedda v. The United Kingdom, 7 July 2011, para. 101: “against [this] background”, of Article 1, para. 3, and Article 24 un Charter, “the Court considers that, in interpreting its resolutions, there must be a presumption that the Security Council does not intend to impose any obligation on Member States to breach fundamental principles of human rights”. Cf. M. Lugato, ‘Sono le sanzioni individuali incompatibili con le garanzie processuali?’, supra note 18, p. 321 f.; R. Kolb, L’article 103 de la Charte des Nations Unies, supra note 18, p. 132 ff. That the Charter’s principles and purposes “are the only limitation” to the Security Council’s powers is emphasized in the Special Research Report No. 1, Security Council Action Under Chapter vii: Myths and Realities, 23 June 2008 (available on the Security Council’s website), 6. B. Fassbender, Targeted Sanctions and Due Process, Study Commissioned by the un Office for Legal Affairs, 20 March 2006; V. Gowlland-Debbas, ‘An Emerging International Public Policy?’ in U. Fastenrath, R. Geiger, D.-E. Khan, A. Paulus, S. von Schorlemer, C. Vedder (eds.), From Bilateralism to Community Interest: Essays in Honour of Judge Bruno Simma (Oxford: Oxford University Press, 2011), pp. 241 ff., 253. Concurring opinion of Judge Malinverni, in the Nada case, para. 75.

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could legally demand that member States implement its binding Resolutions disregarding basic human rights. Should it do so, the Resolutions would be in violation of the Charter and therefore invalid.45 Clearer human rights standards bind the eu, since it is “founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights” (Article 2 teu). These rights are today spelled out in the Charter of Fundamental Rights, which under the Treaty of Lisbon “shall have the same legal value as the Treaties” (Article 6(1) teu); the common foreign security policy “shall be guided” “by […] democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law” (Article 21(1) teu). There can hardly be any doubt that the action of the eu has to be in conformity with the human rights standards encapsulated in its founding treaties. Individual States are bound to respect human rights under customary international law, under international agreements to which they are parties, and in most cases under their national constitutions. None establishes an “international sanctions exception”. The admissible restrictions to the enjoyment of fundamental rights are regulated either under general derogation clauses referring to states of emergency, or, for some of the protected rights, in the limitation clauses. So, one has to bear in mind that limitations to the enjoyment of human rights are legally admissible, within the perimeter defined by human rights law. It is within those limits that targeted sanctions’ derogations to human rights would have to be accommodated in order that they can be deemed ‘legal’. The Obligation to ‘Accept and Carry Out’ un Security Council Chapter vii Resolutions and its Priority over Conflicting Conventional Obligations The obligation “to accept and carry out” un Security Council Chapter vii Resolutions, under Article 25 of the un Charter is binding upon all member States of the United Nations. The mentioned provision establishes an obligation for member States to implement those Resolutions at national level, when

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45

As Judge ad hoc Lauterpacht states in his separate opinion in the case on the Application of Genocide Convention, Provisional Measures (i.c.j. Reports 1993, p. 3 ff.): “it is not to be contemplated that the Security Council would ever deliberately adopt a resolution clearly and deliberately flouting a rule of jus cogens or requiring a violation of human rights” (para. 102; italics added).

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they do not have direct effect in their domestic legal orders.46 The obligation spelled out in Article 25 of the un Charter falls under Article 103 of the un Charter, and therefore it enjoys priority over conflicting obligations set out under any other international treaty. Does the legal framework as outlined above imply that no scrutiny at national or regional level could be exercised upon human rights complaints arising from the implementation of Security Council targeted sanctions? As shown in the preceding sections, the answer is in the negative: courts have prevailingly accepted such complaints – and often upheld them – although turning towards what has been called a “technique d’évitement de l’art. 103”.47 Judges (and treaty bodies) have relied on the principle that national, or regional, acts implementing sanctions – even Security Council sanctions under Chapter vii – are subject to the principles on fundamental rights, resulting from the national and regional legal orders, and from international rules commanding respect by the national and regional authorities.48 In general, courts have therefore taken the position that human rights obligations are not displaced by the obligation to carry out the Security Council’s ‘smart’ sanctions, but, generally speaking, have not dealt with the issue under Article 103 unc.49 46 See sc Special Research Report No. 1, Security Council’s Action under Chapter vii, Myths and Realities (supra note 32), p. 14. The point is emphasized in the case-law: see for example, eu Court of Justice, Kadi i, paras. 296, 298; ECtHR, Nada, paras. 176, 195, 212 (supra note 7); Al Dulimi, para. 90 (supra note 9). Critical, on the point concerning Switzerland’s discretion in the implementation of sc Res. 1390 (2002), is the Joint concurring opinion of Judges Bratza, Nicolaou and Yudkivska and the concurring opinion of Judge Malinverni in the Al Dulimi case. 47 R. Kolb, L’article 103 de la Charte des Nations Unies, supra note 18; see also S.E. Eckert and T.J. Biersteker, Due Process and Targeted Sanctions. An Update of the “Watson Report”, Providence-Geneva, 2012, p. 26 ff. (available at http://www.watsoninstitute.org). 48 Paradigmatically, Kadi i and Kadi ii. 49 One notable exception is the House of Lords judgment in Al Jedda (supra note 16), where the opinion that Article 103 does not except any category of treaty from the “any international agreements” to which it refers, was explicitly defended in relation to the echr (cf. the Opinion of Lord Bingham of Cornhill, para. 35). The position relies essentially on the judgment of the icj in the Lockerbie Case and on R. Bernhardt, ‘Article 103’ in B. Simma, H. Mosler, A. Paulus, E. Chaitidou (eds.), The Charter of the United Nations. A Commentary (2nd ed., Oxford University Press, 2002), pp. 1299–1300. Neither, however, deals specifically with the possibly special status of human rights treaties under Article 103. In the Lockerbie case (see infra note 53) there was no human rights agreement at stake. And, in his commentary, Bernhardt does not address the status of human rights treaties under Article 103; he admits, however, both that agreements concluded to implement the Charter can give rise to “obligations under the Charter” under Article 103, thus enjoying

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Among scholars, the prevailing view remains that obligations stemming from human rights treaties are no exception to the priority rule incorporated in Article 103. It is at times conceded that this is not entirely satisfactory, particularly in respect of international human rights obligations. However, it is held, the text of the provision and international practice allow for no other interpretation.50 Are Human Rights Obligations Actually Displaced by Targeted Sanctions? In our view, the approach according to which, under Article 103 of the un Charter, the obligation to implement Security Council Chapter vii Resolutions on targeted sanctions has to be afforded priority over the human rights obligations of un member States towards targeted individuals or entities, does not stand up to closer scrutiny. The main criticisms can be summarized as follows. First, it stems from an interpretation of Article 103 entailing a “manifestly absurd or unreasonable” (Article 32 Vienna Convention on The Law of Treaties) result. To say the least, one would have to accept that the Security Council is legibus solutus: in the case of targeted sanctions one would have to accept that it has the power to limit indefinitely and without review the individual rights of targeted persons and entities, proposed for listing at will by the member States. This is in sharp contradiction with the un Charter, and also with the generally accepted principle according to which the exercise of authority towards the individual as such is constrained by the rule of law, including the separation of powers and generally accepted standards of human rights protection.51 The question is, however, whether a different interpretation is possible. Literally, Article 103 refers to “obligations stemming from any other international agreement”, without any qualification. But international law does not

4.3

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51

priority in case of conflict with obligations arising from other international agreements – and one thinks here primarily about the Covenant on Civil and Political Rights; and that new interpretations of Charter provisions may arise from subsequent practice and consensus in the application of the Charter, resulting in obligations “under the Charter”, “different from those originally undertaken, to which Article 103 becomes applicable” (p. 1297) – and one thinks here of the growing articulation and legal relevance of human rights commitments in the Charter system that we have underlined. See M. Lugato, ‘Sono le sanzioni individuali incompatibili con le garanzie processuali?’, supra note 18, p. 320 ff. with further references; R. Kolb, L’Article 103 de la Charte des Nations Unies, supra note 18, p. 200 ff. The point cannot be developed here, but deserves attention. Cf. House of Lords, Ahmed and Others, supra note 7. See for an initial discussion and references in M. Lugato, ‘Sono le sanzioni individuali incompatibili con le garanzie procedurali?’, supra note 18, Section 9.

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prescribe an exclusively literal interpretation and – it is submitted – such purely textual reading of Article 103 does not take in due account all the criteria in Articles 31 and 32 of the Vienna Convention on the Law of Treaties.52 In addition, as already noted, no certain indications on the matter come from the case law of the International Court of Justice, contrary to some views.53 It is true that so far when judges have engaged with Article 103 they have adhered to the “not entirely satisfactory but inevitable” interpretation of Article 103 that includes human rights obligations in its scope of application. At the same time, it cannot be overlooked that by and large judges have not engaged with Article 103 and ensured respect for human rights obligations by reviewing 52

53

It is argued in previous work on this topic (M. Lugato, op. loc. ult. cit., Section 6), that the circumstance that human rights treaties as such barely existed at the time the Charter was concluded (and the few provisions that existed did not carry the weight they would gain in the subsequent evolution of international law) could suggest that Article 103 was written with no consideration for human rights obligations as such and would therefore have to be interpreted as inapplicable to the relationship between the Charter and human rights obligations. According to R. Kolb, L’Article 103 de la Charte des Nations Unies, supra note 18, at 200–201, the view has no basis in Article 103, or in international practice. In fact, precisely because neither the text of Article 103, nor subsequent practice, offer guidance on the issue at stake (on the limited usefulness of the Lockerbie judgment, below note 53), one is bound to look for other elements to clarify its ambiguities and/or obscureness or to overcome a manifestly absurd or unreasonable interpretive result (Article 32, Vienna Convention on the Law of Treaties, 1969). In this sense, the fact that human rights obligations were nowhere near as distinctive of the international legal system in 1945 as they are today can be included among the ‘circumstances’ of the conclusion (Article 32, Vienna Convention on the Law of Treaties, 1969) of the un Charter explaining why the relationship between human rights and Charter obligations is not covered by Article 103. Interestingly, the same Author takes the position that “le seul Article 103 paraît insuffisant et inadéquat pour traiter d’une question d’une telle importance et ampleur” (p. 122). Supra, note 49. In Lockerbie (Case Concerning the Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie, Libyan Arab Jamahirya v. United States of America, Preliminary Objections, i.c.j. Reports 1998, p. 9 ff., paras. 39 and 42), the potential conflict did not involve a human rights treaty, but the 1971 Montreal Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation; in the Case Concerning Military and Paramilitary Activities in and Against Nicaragua, Nicaragua v. United States of America, Jurisdiction and Admissibility, i.c.j. Reports 1984, p. 392 ff., para. 107, the Court’s statement according to which “all regional, bilateral, and even multilateral, arrangements that the Parties to this case may have made, touching on the issue of settlement of disputes or the jurisdiction of the International Court of Justice, must be made always subject to Article 103 of the Charter”, does not appear to be specifically relevant to present purposes either, because it does not deal with the possible ‘special status’ of human rights treaties under Article 103.

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States or regional acts implementing targeted sanctions. This recent practice suggests that Article 103 is regarded as structurally inadequate for the coordination of the obligations to carry out Security Council Chapter vii Resolutions on targeted sanctions and the obligation to respect and ensure human rights, even though it does not say so explicitly. Second, the question can be asked, whether there is a real conflict between the obligation to carry out Security Council’s Chapter vii targeted sanctions and member States human rights obligations. Two circumstances have to be considered. One is the mentioned, repeated call on States to ensure ‘robust implementation’ of counter-terrorism measures while respecting international law, including human rights, humanitarian and refugee law. This casts doubts on the existence of the ‘conflict’ to be solved through Article 103. In that call one is authorized to see recognition, by the Security Council, that member States of the United Nations have equally reinforced obligations to implement Security Council Chapter vii Resolutions and to protect human rights. On this basis, effective protection of listed subjects’ rights can be pursued, at the implementation stage, in harmony with international human rights agreements themselves, which allow for derogations, without sacrificing the equally imperative objective to fight international terrorism (and, more generally, to abide by the Security Council’s action to maintain international peace and security).54 Perhaps, neither States nor courts, nor scholars on the whole, have so far devoted sufficient attention to these ‘compatibility clauses’.55 Another 54

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The argument was in fact put forward by the applicant in Al-Saadoon and Mufdhi v. United Kingdom, 2 March 2010: “while the government [of the uk] placed repeated reliance on the relevant unscrs, they had failed to refer to the obligations clearly expressed therein that the States concerned had to comply with their international obligations, including under humanitarian and human rights law” (para. 105), but not taken up by the ECtHR. More detailed analysis of such ‘compatibility clauses’ in M. Lugato, ‘Sono le sanzioni individuali incompatibili con le garanzie processuali?’, supra note 18, p. 329 ff.; see also G.A. Lopez, D. Cortright, A. Millar and L. Gerber-Stellingwerf, Overdue Process: Protecting Human Rights While Sanctioning Alleged Terrorists, Report from the fourth Freedom Forum and Kroc Institute for International Peace Studies at the University of Notre Dame (2009), available at http://www.fourthfreedom.org, p. 3 ff. Particularly if one considers the emphasis that the International Law Commission puts on harmonization as a means to solve (apparent) conflicts between international provisions and regimes: cf. Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, Report of the Study Group of the International Law Commission, finalized by M. Koskenniemi, A/CN.4/L.682, 13 April 2006. According to R. Kolb, L’Article 103 de la Charte des Nations Unies, supra note 18, p. 125 f., such ‘compatibility clauses’ can be considered “de présomptions raisonnables” allowing for conflicts to be reduced to the minimum. It is to be added that if the reading proposed

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relevant circumstance is that if the view is accepted that core human rights obligations are among the obligations under the Charter, as argued above, they too enjoy primacy under Article 103. Third, the case law and practice we have been discussing may not be settled  yet, but cannot be disregarded. The fact that the case law has, by and large, avoided the conclusion that, under Articles 25 and 103, Security Council’s targeted sanctions displace human rights obligations; that the majority of States  and international institutions have repeatedly committed to robustly conducting the fight against terrorism while respecting human rights; that, to my knowledge, no claim has been officially raised that States are breaching Articles 25 and 103 unc, as a consequence of their judges annulling listings for violation of human rights obligations,56 are all elements of practice that offer supplementary evidence of how problematic the traditional ‘absolutist’ interpretation of Article 103 is, in the face of the current challenges stemming from the two paramount collective interests at stake: to effectively fight international terrorism, while at the same time upholding the rule of law. Finally, it is worthwhile to briefly return to the issue of the ‘balance of competences’ between the Security Council and member States, raised by targeted sanctions:57 if the Security Council has been conferred the primary responsibility for the maintenance of peace and security, States have and maintain the primary responsibility to protect the individual rights of those under their jurisdiction. In fact, as is well known, international protection of human rights is subsidiary to national protection. If it is so, then it is perfectly convincing that the Security Council should not dictate the procedural and substantial guarantees that have to be ensured to targeted individuals or entities, and limit  itself to a general reminder that those obligations exist and have to be respected. The corresponding task is for States to carry out. In fact, Security Council’s sanctions do not have direct effect in the member States, but require implementation by national authorities. It would seem coherent with such a framework, that targeted sanctions, directly impacting individual rights, are implemented by States in the text is accepted, one further consequence is that it becomes doubtful that one could frame un member States human rights compatible implementation of sanctions as a ‘disobedience’ as in A. Tzanakopoulos, Disobeying the Security Council, supra note 18. 56 In particular, to my knowledge, the Security Council has not done so. In the Fifteenth Report of the Analytical Support and Sanctions Monitoring Team submitted pursuant to resolution 2083 (2012) concerning Al-Qaida and associated individuals and entities (u.n. Doc. S/2014/41, 23 January 2014) the Monitoring Team, taking note of the Kadi ii judgment, simply undertakes to “continue to engage with European Union officials on listing challenges at the European Union level and on due process issues more broadly” (para. 29). 57 See supra note 39 and corresponding text.

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within the l­imits set by human rights law (the respect of which is monitored by national and international bodies).58 The argument according to which the effectiveness of Security Council’s action would be affected is not convincing: it is not by arbitrarily erasing human rights that effectiveness of its action can be ensured. 5

Concluding Remarks

The main points addressed in the present paper can be summarized as follows. Individual rights are a limit both to the decision and to the implementation of targeted sanctions. These limits stem from international law, from eu law and from national law. The interpretation according to which such obligations are subject to the primacy of un Charter obligations, as an effect of Article 103 of the un Charter, does not find general recognition in case-law, nor in the practice of States, which prevailingly recognize that countering terrorism, in particular, requires respect for international law, human rights law, humanitarian law and refugee law. More generally, the acknowledgment that security and human rights are not only imperative, but also interdependent and mutually reinforcing has been a leitmotiv of un and State practice for over a decade now. The pursuit of one does not allow the sacrifice of the other, if not in the most extreme (and temporary) situations, where human rights law itself offers the tools to legally limit the enjoyment of human rights. The existence of a ‘conflict’ between the obligation to implement targeted sanctions and human rights obligations can be doubted: it is in contradiction with the repeated emphasis on the need to respect human rights while countering terrorism; it is also in contradiction with the place that – due to subsequent shared practice and the evolution of the international legal order as a whole – respect for human rights has among the obligations under the present Charter. The challenging step ahead for all those involved – international institutions, States, legislators, judges, scholars – is to objectively assess, within the applicable legal standards, the functions of coercive diplomacy and its aims in any given case, in order to correctly identify and apply effective measures, compliant with those standards; and to establish the tools to enhance capacity to meet the objectives of effective coercive diplomacy without renouncing our standards of civilization beyond what is strictly required and admissible. 58

Along the same lines of reasoning, it is submitted, one should inquire into the question of which judge is in the best position to ensure that fair and clear procedures, and effective review are observed in the implementation of targeted sanctions. See Chapter 2 by Michael Bothe in this volume.

chapter 9

International Legal Limits on the Ability of States to Lawfully Impose International Economic/Financial Sanctions Daniel H. Joyner Abstract This chapter addresses the subject of legal limitations which international law places on the imposition of international economic/financial sanctions, with particular reference to sanctions with counter-proliferation aims – i.e., purposed in stopping the actual or suspected proliferation of weapons of mass destruction (wmd). The chapter will focus on three sources of international legal obligations which impose limits on the application of coercive international economic/financial sanctions: (1) the general international law principle of economic non-coercion; (2) the law of countermeasures; and (3) human rights law. It will conclude that the totality of these obligations of international law limiting the lawfulness of both unilaterally and multilaterally-applied coercive sanctions purposed in counter proliferation, leaves a vanishingly small window for the lawful application of such sanctions.

Keywords economic sanctions – coercion – wmd proliferation

1 Introduction This chapter addresses the subject of legal limitations which international law places on the imposition of international economic/financial sanctions, with particular reference to sanctions with counter-proliferation aims – i.e., purposed in stopping the actual or suspected proliferation of weapons of mass destruction (wmd). However, the analysis in this chapter should be equally applicable to most other cases of the application of coercive economic/financial sanctions. Economic/financial sanctions may be organized and applied under a multilateral framework by States acting in a cooperative manner, under the ­authority of the u.n. Security Council. Alternatively, or sometimes in parallel, sanctions

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can be applied by States on a unilateral basis outside of a Security Council mandate. Under this latter paradigm, States may still coordinate sanctions among themselves as against a common target. Nevertheless, for purposes of legal categorization, this chapter will refer to all sanctions undertaken outside of a Security Council mandate as unilateral sanctions. This chapter will focus on three sources of international legal obligations which impose limits on the application of coercive international economic/ financial sanctions: (1) the general international law principle of economic non-coercion; (2) the law of countermeasures; and (3) human rights law. It will conclude that the totality of these obligations of international law limiting the lawfulness of both unilaterally and multilaterally-applied coercive sanctions purposed in counter-proliferation, leaves a vanishingly small window for the lawful application of such sanctions. 2 Effectiveness First a word regarding the effectiveness of economic/financial sanctions in accomplishing their stated policy ends. This is not to be confused with the effectiveness of sanctions in causing harm to the target State’s overall economy, or suffering to the citizens of the target State, both of which are frequently caused by sanctions. However, the leading academic study of the use of economic sanctions as a tool of foreign policy finds that economic sanctions have historically achieved success in changing target State behavior in the manner desired by the sanctioning States in only thirty-four percent of cases.1 It further notes that, in cases where high-level political interests, such as national security (e.g. wmd proliferation) are involved, the likelihood of sanctions significantly affecting target State behavior in the desired direction is even further diminished. These findings are applicable to both multilateral and unilateral sanctions. A recent study of the effectiveness of international economic sanctions specifically in the context of nuclear nonproliferation, similarly finds that the imposition of economic sanctions against a target State with an existing nuclear program, aimed at halting that program, is unlikely to succeed in changing the target State’s policy toward that program.2

1 G.C. Hufbauer, J.J. Schott, K.A. Elliott and B. Oegg (eds.), Economic Sanctions Reconsidered (3rd ed., Washington d.c.: Peterson Institute for International Economics, 2007), p. 162. 2 See N. Miller, ‘The Secret Success of Nonproliferation Sanctions’, 68 International Organi­ zation, Issue 4 (September 2014), p. 937.

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A further observed corollary problem in the area of counter-proliferation oriented sanctions specifically is that, once adopted, economic sanctions often become entrenched in either or both national and international law and policy, and can become very difficult to rescind without the sanctioning authority losing perceived credibility. For example, in the cases of Security Council -authorized sanctions against Iran and North Korea, where longstanding counter-proliferation sanctions have not had the desired policy effects, even though their collateral effects upon the economy and the civilian populace have been severe, the sanctions programs adopted by the Security Council now arguably stand as a hindrance in and of themselves to a final resolution of the standoff between these countries and their Western detractors.3 The Security Council has, for example, ordered Iran to cease uranium enrichment – a fundamental element of a peaceful nuclear fuel cycle program. The economic sanctions that the Security Council has imposed upon Iran are tied directly to Iran’s compliance with this command, among others.4 However, it is clear from the record of diplomatic negotiations between the P5 + 1 and Iran that any final resolution of the diplomatic crisis regarding Iran’s nuclear program will necessarily involve Iran keeping intact a significant proportion of its uranium enrichment program. This then raises the potential of a diplomatic resolution to the crisis, which includes a requirement of lifting the international sanctions regime on Iran, but which does not include Iran’s prior strict compliance with the command of the Security Council to cease its uranium enrichment program, upon which those sanctions were based. This not-unlikely outcome would force the Security Council into a difficult position, in which it might be forced to choose between its own credibility on the one hand, and a practical resolution to the diplomatic crisis on the other. Thus, observation of counterproliferation-oriented sanctions cases demonstrates that not only are sanctions typically unsuccessful in this context, but worse, they have the potential to become impediments per se to achieving desired policy aims.5 3 See Y. Butt, ‘By Not Lifting Sanctions, West and Obama are Helping Iran Enrich Uraniun’, Christian Science Monitor (25 May 2012). 4 For a listing of un sc Resolutions on Iran, see Arms Control Association, un Security Council Resolutions on Iran, available at https://www.armscontrol.org/factsheets/Security-Council -Resolutions-on-Iran (accessed 5 July 2014). 5 See, e.g., D. Joyner, ‘The New Deal Between the P5 + 1 and Iran’, ejil:Talk! (26 November 2013) (accessed 5 July 2014).

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3 Legality The question of the legality of international economic/financial sanctions as a means of foreign policy coercion is a complex one. Economic/financial sanctions have effectively become the favored default tool of foreign policy, particularly for powerful States, acting alone or cooperatively, to express their displeasure with the policies of less powerful States in a range of issue areas, and to bring pressure to bear on those target States to change their behavior. The Security Council itself seems to have come to regard economic sanctions as the most attractive (i.e. least costly to them) tool in its toolbox of options for dealing with States and non-state actors that it determines to constitute a threat to international peace and security – this notwithstanding the above referenced empirical research which demonstrates the relative inef­ fectiveness of sanctions. This observation has led many to conclude that economic/financial sanctions, in fact, have considerably more to do with cathartically satisfying the sanctioners, and their domestic constituencies, that they are ‘doing something’ about the situation, than they have to do with meaningfully addressing the sanctionee’s displeasing behavior. Consistent with the Lotus principle of international law, as a general proposition, and in the absence of positive legal obligations to the contrary, it is certainly correct that a State has the legal discretion to choose with which other States it pleases to have, and to allow the legal and natural persons subject to its jurisdiction to have, economic/financial dealings.6 Pursuant to this observation, there is undoubtedly a range of sanctions that are applied by States against other States and non-state actors, that are not prohibited by any positive rule or obligation of international law, and are therefore lawful to maintain, such as in the case of a simple retorsion.7

6 This principle provides that “restrictions upon the independence of States cannot…be presumed” and that international law recognizes that States possess “a wide measure of discretion which is only limited in certain cases by prohibitive rules”. The Case of the S.S. “Lotus” (France v. Turkey), Judgment of 7 September 1927, p.c.i.j (ser. A) No.10 (1927). 7 See P.E. Dupont, ‘Countermeasures and Collective Security: The Case of the eu Sanctions Against Iran’, 17:3 Journal of Conflict and Security Law (2012), p. 311; A.V. Lowe and A. Tzanako­ poulos, ‘Economic Warfare’ in R. Wolfrum (ed.), Max Planck Encyclopedia of Public International Law (Oxford: Oxford University Press, 2012), p. 8 (“It is generally accepted that the prohibition of the use of force under [un Charter] Article 2 (4) and under customary law does not preclude the use of economic force”.). The icj in the Nicaragua case found that “[a] State is not bound to continue particular trade relations longer than it sees fit to do so, in the absence of a treaty commitment or other specific legal obligation”. Military and Paramilitary

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However, it is also true there are a number of sources of positive international legal obligation, located within a variety of substantive areas of inter­ national law, which may be applicable to the imposition of certain coercive international economic/financial sanctions, and which may significantly circumscribe States’ and international organizations’ lawful discretion to impose them. Michael Bothe has reviewed a number of these sources in discrete legal regimes in his contribution to this volume. In this chapter, I would like to add to this consideration a brief review and discussion focused on three substantive areas: (1) the general international law principle of economic non-­coercion; (2) the law of countermeasures; and (3) human rights law. 3.1 Economic Warfare and the Principle of Economic Non-Coercion Although coercive international economic/financial sanctions applied unilaterally by States are generally held not to comprise per se a breach of Article 2(4) of the u.n. Charter, which prohibits the threat or use of international force, nor on their own to constitute the commencement of an armed conflict, nevertheless in a meaningful sense coercive sanctions adopted during peacetime, either unilaterally or multilaterally through the Security Council, are a means of economic warfare.8 And indeed, some of the chief proponents of the use of coercive sanctions refer to them as such.9 Though ‘economic warfare’ is not a legal term of art, it does usefully capture both the intent of those applying such sanctions, as well as the effects of those sanctions upon the target State(s). As Vaughan Lowe and Antonios Tzanakopoulos have written: Economic warfare is not only a means of imposing pressure which supports military action. Certain measures taken in peacetime resemble traditional means of economic warfare to such an extent that it may be fair to say that economic warfare, in the form of economic coercion, is also an alternative to – and not simply a complement of – armed conflict.10 President Hassan Rouhani of Iran has recently commented on the violent nature of the sanctions imposed upon Iran by the Security Council and by States acting unilaterally:

Activities in and against Nicaragua (Nicaragua v. United States), Judgment of 27 June 1986, i.c.j. Reports 1986, 14, p. 138. 8 See A.V. Lowe and A. Tzanakopoulos, ‘Economic Warfare’, ibid., p. 8. 9 See e.g., J. Zarate, Treasury’s War: The Unleashing of a New Era of Financial Warfare (Public Affairs, 2013). 10 A.V. Lowe and A. Tzanakopoulos, ‘Economic Warfare’, supra note 7, p. 8.

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Unjust sanctions, as manifestation of structural violence, are intrinsically inhumane and against peace. And contrary to the claims of those who pursue and impose them, it is not the States and the political elite that are targeted, but rather, it is the common people who are victimized by these sanctions. Let us not forget millions of Iraqis who, as a result of sanctions covered in international legal jargon, suffered and lost their lives, and many more who continue to suffer all through their lives. These sanctions are violent, pure and simple; whether called smart or otherwise, unilateral or multilateral. These sanctions violate inalienable human rights, inter alia, the right to peace, fight to development, right to access to health and education, and above all, the right to life. Sanctions, beyond any and all rhetoric, cause belligerence, warmongering and human suffering.11 Particularly as the authorization and use of economic/financial sanctions, especially by powerful States against weaker States, has become so commonplace during the post-Cold War period, it is important to recognize that international economic/financial sanctions that are purposed in coercing a target State to change its behavior, are measures of economic warfare potentially no less destructive in their effects upon the target State, and particularly upon its civilian population, than military force. In recognition of this fact, a number of scholars have proposed that the law of armed conflict, or at least principles derived from that body of law, should apply to the imposition of coercive economic/financial sanctions, both by States acting unilaterally as well as under the authorization of the Security Council, even during peacetime. In a comprehensive presentation of this line of analysis, in an article published in the European Journal of International Law in 1998, Michael Reisman identified a number of these principles.12 First, the related principles of necessity and proportionality: The principle of proportionality under international law caps the quanta of damage that the necessity inquiry suggests. Therefore, even if ­necessary, 11

12

Statement by H.E. Dr Hassan Rouhani, President of the Islamic Republic of Iran, at the Sixty-eight Session of the United Nations General Assembly [sic], New York (24 September 2013) available at https://papersmart.unmeetings.org/media2/157530/iran.pdf (accessed 5 July 2014). W.M. Reisman and D.L. Stevick, ‘The Applicability of International Law Standards to United Nations Economic Sanctions Programs’, 9 European Journal of International Law (1998), pp. 86–141.

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a sanctions programme cannot exceed the somewhat broadly construed bounds of proportionality. Collateral damage, as part of general damage, must also be proportional. The referential point of evaluation for proportionality under the law of armed conflict is the immediate or prospective consequences of the act that triggered the contingency. This inquiry into proportionality must also necessarily be prospective. Second, the principle of discrimination between combatants and noncombatants: Economic sanctions are destructive. Potentially, they could be even more destructive, at least in terms of collateral damage, than uses of the military instrument…. To allow unilateral or multilateral actors to use economic sanctions in a manner inconsistent with the minimization of collateral harm would undermine the fundamental goals of international law that are expressed in the prescribed law of armed conflict…. More limited and precise economic sanctions are to be preferred over more general and undiscriminating programmes. Given the destructiveness of economic sanctions programmes, it would seem that genuinely effective general embargoes, which, by definition, cannot discriminate between combatant and non-combatant, should be impermissible and that there is now a need for a much more refined use of the economic sanction. Third, the principle of necessity of a periodicity of review of sanctions programs: [E]conomic sanctions programmes must continuously update their information as the programme proceeds to ensure that they are consistent, in their effects, with international law. The necessity for the use of explicit contextuality here is very important to ensure compliance no less than to test allegations of abuse. Implicit in Reisman’s analysis is the conclusion that serious, coercive economic sanctions, applied unilaterally by States or under the authorization of the Security Council, should per se trigger the application of the jus in bello, and principles contained therein. This is a problematic conclusion, as it is difficult to fit the idea of economic/financial sanctions satisfying the requirements for constituting a formal armed conflict, with the orthodox interpretation of provisions in sources of the jus in bello defining an armed conflict.

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However, many of the same principles that Reisman identifies in the law of armed conflict – necessity, proportionality, discrimination, review – can be found, and argued more persuasively to be formally applicable to coercive ­economic/financial sanctions, in general international law. As Lowe and Tzanakopoulos observe: The exercise of economic pressure, even in the absence of specific obligations, must not exceed a certain limit, lest it constitute a violation of the customary principle of non-intervention. Accordingly, economic measures not otherwise prohibited by international law become unlawful if they aim to coerce the target State in respect of matters which each State has the right to decide freely, such as the choice of a political, economic, social and cultural system…. Certain parallels between measures of economic warfare in armed conflict and economic measures in peacetime are clearly identifiable. The concept of imposing a strain on the targeted economy so as to procure submission (in war) or to induce compliance with international obligations (in peacetime) is one common feature. So, too, is the basic limitation of proportionality, even if the precise test will differ depending on whether economic warfare is waged during armed conflict or in peaceful circumstances.13 Lowe and Tzanakopoulos here identify as applicable inter alia the general international law principle of non-intervention, and note that one aspect of the principle of nonintervention is a corollary principle which has been iterated in a number of treaties and u.n. General Assembly resolutions, i.e. the right of States to be free from political or economic coercion by other States.14 As stated in u.n. General Assembly Resolution 3281:15 Article 1 Every State has the sovereign and inalienable right to choose its economic system as well as it political, social and cultural systems in accordance with the will of its people, without outside interference, coercion or threat in any form whatsoever. 13 14 15

A.V. Lowe and A. Tzanakopoulos, ‘Economic Warfare’, supra note 7, pp. 11, 13. See M. Shaw, International Law (6th ed., Cambridge: Cambridge University Press, 2008), p. 1147. Charter of Economic Rights and Duties of States, g.a. Res. 3281 (xxix), Art. 1, u.n. Doc. A/RES/29/3281 (12 December 1974); see also g.a. Res. 2625 (xxv), Annex, principle 3, u.n. Doc. A/RES/25/2625 (24 October 1970); g.a. Res. 44/215, u.n. Doc. A/RES/44/215 (22 December 1989); g.a. Res 66/186, u.n. Doc. A/RES/66/186 (22 December 2011).

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Article 32 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. The number of occasions on which this principle has been included in u.n. General Assembly resolutions, and the overwhelmingly positive voting record in favor of these resolutions in the General Assembly, provides evidence supporting the conclusion that this principle of economic non-coercion has likely entered into the corpus of customary international law.16 Accordingly, international economic/financial sanctions that are purposed in coercing States to change their behavior in issue areas in which it is their sovereign right to choose their own policies, are likely in violation of the customary international law principle of non-coercion, which again is simply one specific manifestation of the customary law principle of nonintervention. Here a distinction may exist as between sanctions applied unilaterally by States, and sanctions applied under the authority of the Security Council. While the principle of economic non-coercion applies to States acting unilaterally – e.g. to the previously referenced sanctions applied by the u.s. and the e.u. against Iran for counterproliferation purposes – in Article 41, the u.n. Charter explicitly authorizes the Security Council to mandate economic/financial sanctions in response to a determined threat to international peace and security. It is therefore less clear what application the principle of economic non-coercion should be understood to have upon the actions of the Security Council itself. This question ties into a larger debate which has obtained among international legal scholars for some time, regarding whether and to what extent the Security Council is bound by rules of customary international law, and whether through acting under its Chapter vii authority the Security Council may override some or all of those principles of general international law.17 Most ­scholarly 16

See P.E. Dupont, ‘Countermeasures and Collective Security: The Case of the eu Sanctions Against Iran’, supra note 7, p. 316. 17 See, e.g., D. Schweigman, The Authority of the Security Council Under Chapter vii of the u.n. Charter (The Hague: Kluwer Law International, 2001); A Reinisch, ‘Developing Human Rights and Humanitarian Law Accountability of the Security Council for the Imposition of Economic Sanctions’, 95 American Journal of International Law (2001), pp. 851–872; C. Michaelsen, ‘Human Rights as Limits for the Security Council: A Matter of Substantive Law or Defining the Application of Proportionality?’, 19:3 Journal of Conflict and Security Law (2014), pp. 451–469.

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commentary accepts the notion that the Security Council is prima facie bound by general customary international law. Article 103 of the u.n. Charter does, however, provide that: “In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail”. Some observers have argued on the basis of this provision that when the Security Council acts under its Chapter vii powers, the obligations of States to obey those decisions should be taken in priority to any contradictory principle of customary international law. However, by the plain meaning of its terms, the supremacy principle of Article 103 applies only to circumstances in which a State’s obligations under the u.n. Charter come into conflict with its obligations under some other treaty. Article 103 is therefore a simple conflict of treaty obligations provision, that should be read narrowly.18 Article 103 may therefore not be invoked to justify Security Council decisions that violate principles of general customary international law, including principles of international human rights law, the law of armed conflict, or, arguably, the principle of economic non-coercion, as it has been described above. In fact, the balance of case law from international tribunals, and scholarly commentary argue the contrary.19 Separate from the question of applicability is the substantive question of when economic pressure upon a target State rises to the level of coercion. Natalino Ronzitti has offered a comprehensive review of this question in his contribution to this volume, and I do not wish to replicate it here. It is clear, however, that the assessment of whether economic pressure has amounted to  unlawful coercion will be highly fact specific, and must be assessed on a ­case-by-case basis. 18

19

See A. Paulus, ‘Article 103’ in B. Simma, D.E. Khan, G. Nolte and A. Paulus (eds.), The Charter of the United Nations: A Commentary, (Oxford: Oxford University Press, 2012), Vol. 2, pp. 2132–2133 (“The wording of Art. 103 suggests that it only applies to treaties and other agreements, not to customary international law. The travaux preparatoires support this view. The drafters refused to adopt a formula that explicitly included customary international law and other legal sources”). See generally D. Joyner, ‘The Security Council as a Legal Hegemon’, 43 Georgetown Journal of International Law (2012), p. 225; D. Schweigman, The Authority of the Security Council Under Chapter vii of the u.n. Charter, cit.; E. de Wet, The Chapter vii Powers of the United Nations Security Council (Oxford: Hart Publishing, 2004); A. Tzanakopoulos, Disobeying the Security Council (2011); E. de Wet, ‘From Kadi to Nada: Judicial Techniques Favouring Human Rights over United Nations Security Council Sanctions’, 2 Chinese Journal of International Law (2013), pp. 787–807.

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3.2 Countermeasures However, under the law of State responsibility, it is possible for States to unilaterally maintain lawful economic/financial sanctions that are applied in response to an allegedly unlawful act of the target State, even if the sanctions are themselves prima facie illegal, if the sanctions meet the criteria for lawful countermeasures.20 The criteria for lawful application of countermeasures, both procedural and substantive, can be found in the ilc’s Draft Articles on State Responsibility.21 The subject of the lawfulness of sanctions applied by the e.u. specifically in the context of counterproliferation oriented sanctions targeting Iran, has been comprehensively examined by Pierre-Emmanuel Dupont. Referring to the criteria for lawful application of countermeasures in this context, Dupont has concluded the following: As regards the substantial conditions for the recourse to countermeasures found in arsiwa, applied to the measures considered – namely the oil embargo and the measures taken against the Central Bank of Iran – it may be argued inter alia that (i) the existence of the wrongful act, on which the lawfulness of the countermeasures ultimately rests, is dubious in this case; (ii) whether the eu, in the case considered, qualifies as an ‘injured’ international organization, entitled as such to take countermeasures, is also dubious, (iii) the measures at issue do not prima facie comply with the requirement of proportionality of countermeasures and (iv) the availability of recourse by States (or regional organizations) to countermeasures in situations in which the Security Council has taken action under Chapter vii of the u.n. Charter, is a matter of controversy.22 This same analysis would apply mutatis mutandis to any other unilateral application of countermeasures under these or similar facts, including unilateral u.s. sanctions on Iran. As Dupont’s analysis has shown, unilateral countermeasures applied for counter-proliferation purposes will typically be difficult to apply lawfully by reference to the criteria for lawful countermeasures under 20 21 22

See generally P.E. Dupont, ‘Countermeasures and Collective Security: The Case of the eu Sanctions Against Iran’, supra note 7. Articles on Responsibility of States for Internationally Wrongful Acts, g.a. Res. 56/83, Annex, u.n. Doc. A/RES/56/83/Annex (12 December 2001). P.E. Dupont, ‘Countermeasures and Collective Security: The Case of the eu Sanctions Against Iran’, supra note 7, p. 325.

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the law of State responsibility. It is further important to note, that, as Lowe and Tzanakopoulos have explained: If the peacetime measures of economic warfare are in violation of obligations of the acting State under international law and cannot be justified as countermeasures, they will engage the international responsibility of the State. They will thus themselves serve as grounds for resort to countermeasures or even self-defence by the injured State.23 Thus, the application of sanctions as countermeasures, if unlawfully applied, can result in the liability of the sanctioning State and additionally give rise to the potential for the target State to itself respond with lawful countermeasures. 3.3 Human Rights Lastly, the possibility that international economic/financial sanctions, whether applied unilaterally by States, or multilaterally through the Security Council may violate obligations of the sanctioning States, or the United Nations itself, under international human rights law, has been a subject of increasing modern concern. As noted previously, severe, coercive economic sanctions, particularly applied by powerful States against weaker States, can have devastating effects on the economy and infrastructure of the target State, leading to widespread suffering and deprivation for the civilian population of the State. There is a controversial threshold issue on this question, regarding whether States have human rights obligations regarding persons not in their territory or under their effective control. The most recent scholarship and case law recognizes that extra-territorial human rights obligations can apply to States when they engage in forceful action abroad, even in peacetime.24 As Nils Melzer has explained: The notion of ‘jurisdiction’ for the purposes of human rights law has been said to focus on conduct rather than territory, and to emphasize the duty of States to conduct their operations according to human rights standards with regard to all individuals who may be under their effective control or who may be directly affected by their actions.25 23 24

25

A.V. Lowe and A. Tzanakopoulos, ‘Economic Warfare’, supra note 7, p. 12. See M. Milanovic, Extraterritorial Application of Human Rights Treaties: Law, Principles and Policy (2013); N. Melzer, Targeted Killings in International Law (Oxford: Oxford University Press, 2008), p. 138–139; ECtHR, Issa and Others v. Turkey (Merits), Application No. 31821/96, Judgment of 16 November 2004, 41 e.h.r.r. 567 (2004), paras. 69–71. N. Melzer, ibid., p. 138.

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In brief, international human rights obligations follow a State’s conduct, and the effects of that conduct upon individuals, whether they are located within the acting State or extraterritorially. It would appear that the use of coercive international economic/financial sanctions upon a target State would fit well into this scope of application. And particularly as similar forcible actions against a foreign civilian population would be prohibited or at least severely limited by customary international humanitarian law during a time of armed conflict, as a simply intuitive matter it would seem impossible for States to argue that their use of targeted force through economic warfare during peacetime against a foreign civilian population, should not give rise to obligations to respect the human rights of those targeted civilians.26 Economic/financial sanctions imposed during peacetime may therefore unlawfully infringe upon the following human rights of civilians in target States, found in both conventional and customary international law: the rights to life; health; an adequate standard of living, including food, clothing, housing and medical care; and freedom from hunger.27 Similarly, there is another threshold question as to whether and to what degree the Security Council itself is bound by international human rights law obligations in its authorization of economic/financial sanctions pursuant to its Chapter vii powers. As recognized previously, the Security Council does have explicit authority under Article 41 of the un Charter to authorize economic/ financial sanctions in a case in which it determines the existence of a threat to international peace and security. However, Security Council-authorized sanctions regimes, because of their coordinated nature potentially among many States, also have the greatest potential to severely affect the civilian population of the sanctioned State. It is important to recall that in Article 25 of the u.n. Charter, Member States are obligated to “accept and carry out the decisions of the un sc in accordance with the present Charter”. This provision has been interpreted to require Member State compliance only with Security Council sanctions decisions which are themselves in compliance with the provisions and principles of the

26

See Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Armed Conflicts (Protocol i), Arts. 54, 69, 70, 8 June 1977, 1125 u.n.t.s. 3. 27 See udhr, Arts. 3, 25, ga Res. 217A(iii), u.n. Doc. A/810 (1948); iccpr, Art. 6(1), 16 December 1966, 999 u.n.t.s. 171; Convention on the Rights of the Child, Arts. 6(1), 27(1), 20 November 1989, 1577 u.n.t.s. 3; icescr, Arts. 11(1), 11(2), 12, 16 December 1966, 993 u.n.t.s. 3.

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u.n. Charter.28 This interpretation is strengthened by a view of Article 25 in its context within the u.n. Charter, and in particular by the text of Article 24 which immediately precedes it. Article 24 provides that: In discharging these duties the Security Council shall act in accordance with the Purposes and Principles of the United Nations. These purposes and principles therefore comprise important limitations on the power of the Security Council to act, even under its Chapter vii authority. Among the paragraphs in Article 1 of the u.n. Charter, which are explicitly designated to constitute the “Purposes of the United Nations”, is paragraph 1, which lists one such purpose as: To maintain international peace and security, and to that end: to take effective collective measures for the prevention and removal of threats to the peace, and for the suppression of acts of aggression or other breaches of the peace, and to bring about by peaceful means, and in conformity with the principles of justice and international law, adjustment or settlement of international disputes or situations which might lead to a breach of the peace.29 Thus, the obligation on u.n. Member States to “accept and carry out the decisions of the Security Council” is intrinsically linked to the Security Council itself acting in accordance with the purposes and principles of the United Nations, one of the foremost of which is to act in accordance with international law. As noted previously, there is a growing consensus among inter­national legal scholars that the Security Council is bound by general customary international law, inclusive of customary international human rights law. Yet another purpose of the United Nations, included among the paragraphs of Article 1 of the u.n. Charter, is contained in paragraph 3: To achieve international co-operation in solving international problems of an economic, social, cultural, or humanitarian character, and in 28

29

See D. Joyner, ‘Non-proliferation Law and the United Nations System: Resolution 1540 and the Limits of the Power of the Security Council’, 20:2 Leiden Journal of International Law (Cambridge: Cambridge University Press, 2007); A. Peters, ‘Article 25’ in B. Simma, D.E. Khan, G. Nolte and A. Paulus (eds.) The Charter of the United Nations: A Commentary, cit., Vol. 1, pp. 807–819. Emphasis added.

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p­ romoting and encouraging respect for human rights and for fundamen­tal freedoms for all without distinction as to race, sex, language, or religion.30 Thus, in order for the Security Council to exercise its Chapter vii powers lawfully in accordance with the purposes of the United Nations, it must promote and encourage respect for human rights. It can hardly do so if it, itself, violates human rights law in its application of economic/financial sanctions, in the counterproliferation context, or in any other context.31 This subject of the application of international human rights law to Security Council sanctions has recently been thoroughly considered by Christopher Michaelsen, in an article in the Journal of Conflict and Security Law.32 Michaelsen discusses in particular the principle of derogation, present in many human rights law instruments, and the argument made by some scholars that, when the Security Council acts pursuant to its Chapter vii powers, it is implicitly signaling its intention to derogate from normally applicable human right law. This derogation argument could also be made more directly by States acting unilaterally as well. In the context of Security Council sanctions, Michaelsen finds significant utility in the principle of proportionality, which is a general principle of international law, whose manifestations can be found throughout the sources of both international human rights law and international humanitarian law. Specifically, the principle of proportionality is generally applicable to derogations from human rights obligations.33 Thus, Michaelsen argues, if one assumes (in harmony with the bulk of jurisprudence and scholarly commentary on the issue) that the Security Council is bound by international human rights law obligations with regard to its decisions to impose international economic/financial sanctions, then in order for the Security Council to validly derogate from those obligations in a given case of sanctions application, the sanctions program being authorized must, inter alia, be demonstrably compliant with the principle of proportionality. This conclusion is particularly persuasive as it provides a mechanism for application of a principle that is so pervasive in both international human 30 31

32

33

Emphasis added. See D. Schweigman, The Authority of the Security Council Under Chapter vii of the u.n. Charter, cit.; A Reinisch, ‘Developing Human Rights and Humanitarian Law Accountability of the Security Council for the Imposition of Economic Sanctions’, 95 American Journal of International Law (2001), pp. 851–872. See C. Michaelsen, ‘Human Rights as Limits for the Security Council: A Matter of Substantive Law or Defining the Application of Proportionality?’, 19:3 Journal of Conflict and Security Law (2014). See C. Michaelsen, ibid., pp. 462–464.

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rights law and international humanitarian law, and which seems so commonsensical as a prudent limitation upon the ability of both States acting unilaterally, and the Security Council acting multilaterally, to impose economic/ financial sanctions – i.e. to engage in economic warfare – against a target State. So what would be the practical application of the principle of proportionality to the ability of States acting unilaterally, and to the Security Council acting multilaterally, to lawfully impose economic/financial sanctions upon a target State? The calculation of proportionality in this context could be quite c­ omplex – but then it ever is so (e.g. civilian casualties vs. legitimate military goals in the jus in bello). Each case would of course be unique, and driven by its own particular facts. In the cases of Iran and North Korea, where crippling international sanctions have been imposed, that have caused serious and widespread privation and economic suffering for ordinary civilians, in attempt to coercively influence the autocratic and idealistic leaders of those countries to change policy course on a matter of national security sensitivity, I would propose that international sanctions have run afoul of this principle of proportionality. But what of the concept of “targeted sanctions”, which is an idea arising from the experience of the truly draconian international embargo imposed on Iraq after the 1990–1991 Gulf War. What if international sanctions are targeted only at specific industries related, for example, to a country’s nuclear program, and to government officials directly involved in that program? Could not such sanctions be seen to pass a proportionality test? The answer would appear to be yes, in theory. And indeed, it is in this targeted vein that international sanctions on Iran and North Korea began. However, as time passed, and the target governments (predictably) did not change their behavior in the manner purposed by the sanctions, in both cases there was a steady “sanctions creep” to make the respective sanctions programs at the multilateral level larger in scope and application. Furthermore, in both cases, unilateral sanctions were imposed by powerful States, including particularly the u.s. and the e.u., that went well beyond the scope of the sanctions programs approved by the Security Council, and in particular tightened restrictions on financial transactions with target State financial institutions. As both the multilateral and unilateral sanctions regimes grew more comprehensive in scope, the effect upon the civilian populace of the targeted States became more severe. So again, if international sanctions can be targeted, and remain targeted, on only those actors who are closely related to the threat deemed to exist, the proportionality test for proper derogation may potentially be met. But unfortunately, recent cases do not illustrate this.

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Finally, one further aspect of the application of international human rights law to the imposition of international economic/financial sanctions in the counter proliferation context can be seen in the recent decisions of the European General Court, and the European Court of Justice, which have annulled certain financial sanctions applied by the e.u. against Iranian individuals, companies, and financial institutions.34 Monica Lugato has reviewed these judgements in her contribution to this volume. The essential holdings of these cases are that the right of the targeted entities to due process of law was violated by the failure of the sanctioning authorities to reveal the evidentiary basis for the application of sanctions. This common practice by sanctioning bodies in the context of counter-proliferation-oriented sanctions – to withhold evidence concerning the rationale for application of sanctions from the accused – has been importantly checked in these e.u. cases.35 4 Conclusion This brief review has attempted to demonstrate that, notwithstanding the general freedom of States to choose those other States with which they please to have, and to allow their subject natural and legal persons to have, economic/ financial relations, there are a number of positive sources of international law which circumscribe the ability of States to lawfully apply coercive economic/ financial sanctions against other States. The totality of these obligations of international law limiting the lawfulness of both unilaterally and multilaterally-applied coercive economic/financial sanctions, reveal a legal landscape in which there is a vanishingly small ­window of lawfulness for such sanctions, applied for counterproliferation purposes, or indeed for any purposes. It is almost certain that no application of unilateral counterproliferation sanctions to date has met all of these legal requirements. Further, multilateral applications of such sanctions under the authority of the Security Council should be reevaluated in light of the recognition of these limitations. 34

35

M. Lester, ‘European Sanctions Law and Practice, ecj Signals its Approach to Iran Sanctions Cases in 2 Appeals’, European Sanctions Blog (2 December 2013), available at http://europeansanctions.com/2013/12/02/ecj-signals-its-approach-to-iran-sanctions -cases-in-2-appeals/ (accessed 5 July 2014). See D.H. Joyner, ‘Arms Control Law, eu Courts and Iran Sanctions’ (25 July 2013), available at http://armscontrollaw.com/2013/07/25/eu-courts-and-iran-sanctions/ (accessed 5 July 2014).

chapter 10

An Overview of International Sanctions’ Impact on Treaties and Contracts Andrea Atteritano and Maria Beatrice Deli* Abstract This chapter focuses on the impact of international sanctions on treaties – particularly bilateral investment treaties and treaties of friendship, commerce and navigation – as well as on contracts. Regarding the impact of international sanctions on bits and fcn, possible conflicting obligations between their provisions and decisions imposing sanctions have been examined from both a national and an international perspective. Particularly, the analysis has dealt with provisions governing conflict of rules and remedies available to states (either the sanctioned state or the counterparty) that are parties to bits and fcn treaties. As far as contracts are concerned, the paper encompasses a brief analysis of the different standpoints of state Courts in a number of countries, as it is the national law governing the relevant contract that regulates the contract’s implementation and determines the legal consequences of certain situations as well as the remedies potentially available to the parties.

Keywords international sanctions – targeted sanctions – treaties – contracts – force majeure

1 Introduction This paper analyses the impact of international sanctions on treaties – particularly Bilateral Investment Treaties (bits) and Treaties of Friendship, Commerce and Navigation (fcn) – as well as on contracts. In the notion of international sanctions we have included both sanctions imposed by the United Nations Security Council pursuant to Chapter vii of the un Charter and the sanctions imposed by the Council of the European * Sections 1, 4, and 5 by Andrea Atteritano. Sections 2 and 3 by Maria Beatrice Deli.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_011

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Union pursuant to eu treaties. Their legal regime is undoubtedly different and to some extent eu sanctions may easily be assimilated to national sanctions such as those imposed, for instance, by the United States Government. Nonetheless, they are adopted at an international level and might impact national legal systems, and must therefore be considered as international. Regarding the impact of international sanctions on bits and fcn, possible conflicting obligations between their provisions and decisions imposing sanctions shall be examined from both a national and an international perspective. Particularly, the analysis will focus on provisions governing conflict of rules and remedies available to States (either the sanctioned State or the counterparty) that are parties to bits and fcn treaties. Regarding contracts, the paper will encompass a brief analysis of the different standpoints of State Courts in a number of countries, as it is the national law governing the relevant contract that regulates the contract’s implementation and determines the legal consequences of certain situations as well as the remedies potentially available to the parties. 2

Bilateral Investment Treaties and Friendship, Commerce and Navigations Treaties: Content and Legal Effects

A bit is an international agreement establishing the terms and conditions for private investment by nationals and companies of one country in another country, whilst fcn treaties have been considered as the us alternative to the European bit Model.1 fcns did not specifically focus on investments: their principal goal was to facilitate navigation and trade, but at the same time they contained three main components of the modern bits, namely treatment provisions, expropriation and exchange control.2 As in the early 1980s the us gradually shifted from fcns to bits, a number of scholars consider that fcns represented the first generation of bits.3 However, even after this shift, fcn treaties continued to impact investment 1 W. Alschner, ‘Americanization of the bit Universe: The Influence of Friendship, Commerce and Navigation (fcn) Treaties on Modern Investment Treaty Law’, 5 Goettingen Journal of International Law (2013), p. 456. 2 F. Ghodoosi, ‘Combatting Economic Sanctions: Investment Disputes in Times of Political Hostility, a Case Study of Iran’, 37 Fordham International Law Journal (2014), p. 1757. 3 W.M. Reisman, M. Arsanjani, G. Westerman, International Law in Contemporary Perspective (2nd ed., New York: Foundation Press, 2004), p. 460; M. Sornarajah, The International Law on Foreign Investment (Cambridge: Cambridge University Press, 2010), pp. 180–82.

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policy-making in the United States. Firstly, key fcn features such as preestablishment commitments, non-conforming measures, and investor rights survived the us policy-shift and have since found their way into International Investment Agreements (iias) around the world. Secondly, as an alternative to simple and specialized European bits, fcn treaties have inspired a new generation of iias that are complex and comprehensive, containing a fine-tuned mix of rights and obligations, and treating investment alongside other policy concerns. Thirdly, the spread of fcn-inspired treaties coincides with a certain demise of European-style bits. As policy-makers turn to the us instead of Europe for investment policy innovation, we observe an Americanization of the iia universe.4 bits are, as some scholars believe, the product of the fear of the developed countries of nationalization and expropriation:5 indeed, by the 1950s both customary international law and its practice were under attack by developing country hosts. The expropriation of Liamco’s concessions in Libya in 1955, and the nationalization of the Suez Canal by Egypt a year later, served notice of a new militancy on the part of investment hosts. The nationalization of sugar interests by Cuba in the 1960s as well as the nationalization processes performed by Iran in 1951 further undercut the assumptions about the security of international investments.6 Bilateral Investment Treaties were the solution to this problem. Indeed, by no coincidence the date of birth7 of bits practically coincides with the years of large nationalizations and/or expropriations performed by some developing countries and, more specifically, 25 November 1959, when Pakistan and Germany signed the first bit.8 Since then (particularly in the ‘90s) bits have become the most important international legal mechanism for the encouragement and governance of foreign direct investments, with around 2,600 bits all over the world.9 bits are innovative in a number of respects, as, for instance, they require an explicit commitment on the part of the potential host government and involve 4 W. Alschner, supra note 1, p. 456. 5 K.J. Vandevelde, ‘A Brief History of International Investment Agreement’, 12 U.C. Davis Journal of International Law & Policy (2006), pp. 167–169. 6 Z. Elkins, A.T. Guzman, B.A. Simmons, ‘Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960–2000’, 60 International Organization (2006), p. 813. 7 W. Alschner, supra note 1, p. 456. 8 Treaty between Pakistan and the Federal Republic of Germany for the Promotion and Protection of Investments (25 November 1959) 457 u.n.t.s. 23; R. Dolzer, C. Schreuer, Principles of International Investment Law (2nd ed., Oxford: Oxford University Press, 2012), p. 6. 9 K.J. Vandevelde, Bilateral Investment Treaties: History Policy and Interpretation (Oxford: Oxford University Press, 2010), p. 1.

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direct negotiations with the government of potential investors. In this way, bits increase the political ante for the host government and raise expectations of performance, which turn out to meddle in a complex way if an international sanction is imposed. The typical bit offers a wider array of substantive protections than customary rules.10 According to some scholars, there are four possible ways that bits relate to investments:11 they can protect, promote, liberalize, or regulate them. The majority of bits, however, focus on protection and rarely tend to define their legal regime, leaving the investor and the home State free to define it in the contract (although within the limits defined in the bit). bits typically incorporate four major components:12 i.

general treatment of investments and investors: in this part of the bits, governments commit themselves to national treatment, the most favourite nation, fair and equitable treatment and also the umbrella clause; ii. standards related to expropriation: in these clauses, governments usually commit themselves to compensate the investor in case of nationalization and expropriation. Compensation is usually calculated based on the fair market value of the investment; iii. provisions related to the free transfer of currency, investments and investment interests both in and outside the country: countries impose different currency policies and limitations on the amount exported on foreign currencies. The bits guarantee free transfer of foreign currency for investors; iv. arbitration clauses: an important part of almost all bits, which is pivotal to the attraction of foreign investment, is the dispute settlement mechanism. Foreign investors tend to be sceptical about national Courts deciding cases related to government measures. They prefer arbitration bodies to mainly adjudicate based on international laws and standards. 3

Conflicting Obligations under International Law

International sanctions interact in a very complex way with bits, fcns and, in general, with foreign investments. The main issue emerges when the State is 10 11 12

Z. Elkins, A.T. Guzman, B.A. Simmons, supra note 6, p. 811. K. Vandevelde, supra note 9, p. 5. J. Crawford, R.D. Bishop, W.M. Reisman, Foreign Investment Disputes: Cases, Materials and Commentary (The Hague: Kluwer Law International, 2005), pp. 10–11.

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caught in the middle between the obligations to comply with the international sanctions and the obligations to implement the bit or fcn treaty stipulated with the sanctioned State. This problem arises with both traditional – such as an embargo – and targeted sanctions against individuals and corporations. However, in dealing with conflicting obligations under international sanctions and other treaty obligations, the main difference is certainly between sanctions imposed by the un Security Council and sanctions imposed at an eu level. un sanctions are imposed in accordance with Chapter vii of the un Charter13 whilst the eu applies sanctions in the framework of the Common Foreign and Security Policy (cfsp). Restrictive measures have been frequently imposed by the eu in recent years, either on an independent basis or upon implementing binding resolutions of the un Security Council.14 Conflicting obligations can find an easier solution in case of un sanction as, pursuant to Article 103 of the un Charter, un obligations – including those imposed by the Security Council – prevail over the conflicting “obligations under any other international agreement”. Hence, if, for example, the Security Council imposes the freezing of the assets of suspected terrorists, the State hosting the assets of one of the listed individuals shall comply with the Security Council’s resolution, regardless of any bit provision.15 According to some scholars, treaties at odds with un sanctions may be terminated pursuant to Article 64 of the 1969 Vienna Convention on the Law of Treaties whereby “If a new peremptory norm of general international law emerges, any existing treaty which is in conflict with that norm becomes void and terminates”. This approach cannot be shared. Even though the content of existing jus cogens provisions is unclear, sanctions are imposed by the un Security Council based on a treaty provision which, by definition, cannot be considered as a jus cogens rule. Furthermore, sanctions are imposed on a temporary basis and the termination of conflicting treaties is not even a practical and fair solution. Conversely, it might be argued that in the case of un sanctions, bits and fcn treaties with the sanctioned State are automatically suspended, in line

13 See http://www.un.org/sc/committees/. 14 See http://eeas.europa.eu/cfsp/sanctions/docs/index_en.pdf. 15 D.F. Donovan, ‘Investment Treaty Arbitration’ in G.A. Bermann and L. Mistelis (eds.), Mandatory Rules in International Arbitration (Huntinton, ny: Juris Publishing, 2011), p. 278; F. Ghodoosi, ‘Combating Economic Sanctions: Investment Disputes in Times of Political Hostilities, A Case of Study of Iran’, cit., p. 1775.

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with the approach the Italian Government took when sanctions were adopted against Libya in 2011.16 Article 103 of the un Charter may be invoked when an eu regulation implements sanctions previously imposed by the Security Council but an eu Member State cannot rely on such provisions to escape treaty obligations and relevant responsibility when complying with sanctions that the eu imposed on an independent basis or when eu sanctions ‘expands’ un sanctions.17 eu treaties do not include a rule similar to Article 103 of the un Charter and, according to some scholars, European countries should not rely on the primacy of eu obligations to put aside international obligations undertaken with a bit or fcn treaty.18 The solution is to be sought elsewhere and, in particular, in the impact that an international sanction might have on the effectiveness of an existing bit / fcn treaty. In other words, can a bit/fcn treaty be suspended or terminated in case of international sanctions in accordance with Articles 54–64 (particularly Articles 61, 62) of the Vienna Convention of the Law of Treaties? First of all, it must be acknowledged that “the vclt’s exit provisions, together with those set forth in the agreement itself, are intended to be exhaustive”.19 This means that termination or suspension of a treaty pursuant to eu sanctions must find room inside Articles 54–64 of vclt. 16

17 18

19

un Security Council Resolution 1973, S/RES/1973 of 17 March 2011. In the Parliamentary session of 24 March 2011, the then-Italian Minister of Foreign Affairs, Franco Frattini, spoke about the effects of sanctions over the Italo-Libyan bit: “until the adoption of un Resolution 1973, the agreement was de facto suspended, but now, with the entry into force of Resolution 1973, pursuant to Article 103 of the un Charter, there is an absolute and automatic prevalence of un obligations over those undertaken by member States with any other international or bilateral agreement”. As a consequence, there had been “not just a de facto suspension, but a legal and automatic suspension of all the provisions set forth by the bit, whose application would of course be formally forbidden by Resolution 1973”. That is why “within un framework […] we have seized between 6 and 7 billion euro attributable to Gaddafi. We have also provided sanctions in the energy sector”. Minister Frattini also noted that “colonel Gaddafi threatened eu countries that he would have replaced European suppliers with non-eu ones. Now he can no longer do it, because […] we are all protected in the same way”. F. Ghodoosi, supra note 2, p. 1774. See: R. Kwiecień, ‘The Primacy of European Union Law over National Law Under the Constitutional Treaty’, 6 German Law Journal (2005), p. 1479; and A. Dashwood, ‘The continuing bipolarity of the eu external action’ in I. Govaere, E. Lannon, P. Van Elsuwege, S. Adam (eds.), The European Union in the World. Essays in Honour of Marc Maresceau (Leiden: Brill, 2014). L.R. Helfer, ‘Terminating Treaties’ in Duncan B. Hollis (ed.), The Oxford Guide to Treaties (Oxford: Oxford University Press, 2012), p. 636.

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Based on Article 61 of vlct, a possible ground for the termination/suspension of treaties is the impossibility to perform for the permanent or temporary disappearance or destruction of an object indispensable for their implementation. Article 61 also excludes that a party may terminate the contract “if the impossibility is the result of a breach by that party” and it might be argued that the suspension or termination of the bit/fcn could be invoked only by the sanctioned State. On the other hand, the sanctioned State may have no interest in requesting the termination or suspension of the bit/fcn (it would rather have an interest in claiming compensation) unless this is the result of its intention to apply countermeasures against the European State. In such context, there would be no need for the sanctioned State to ground the request for suspension/termination on Article 61 of the Vienna Convention. This possibility would stem from the general principles governing international State responsibility. In addition to the above, the impossibility which is necessary to trigger the termination or suspension of a treaty must be a material one, e.g. the submergence of an island, the drying up of a river or the destruction of a dam,20 and the impossibility deriving from an eu sanction does not seem to meet this requirement. It might be of better help Article 62 of vclt, whereby a treaty may be terminated due to a fundamental change of circumstances, if: (i) the change is of circumstances existing at the conclusion of the treaty; (ii) the change is fundamental and was not foreseen by the parties; (iii) the existence of the circumstances constituted an “essential basis” of the parties’ consent to be bound by the treaty; and (iv) the effect of the change was to “radically transform the extent of the obligations still to be performed under the treaty”. The term “circumstances” has to be interpreted in a broad sense,21 as a tacit condition of the agreement:22 the supervening eu sanction – and most of all, the crisis situation triggering its adoption – could be regarded as a “fundamental change of circumstances”. Furthermore, it is not required that the original obligation has become impossible to perform,23 but it is sufficient that, due to the fundamental change, the extent of the obligation is different from what it was originally 20

21 22 23

Draft Articles on the Law of Treaties, with Commentaries, ilc, Article 58, u.n. Doc. A/6309/Rev.1 (1966). On the same line, see N. Ronzitti, Introduzione al Diritto Internazionale (4 ed., Torino: Giappichelli, 2013), p. 217. Fisheries Jurisdiction (United Kingdom v. Iceland), Judgment of 2 February 1973, i.c.j. Reports 1973, para. 30 et seq., pp. 847–849. Arrets du Tribunal Federal Suisse, 8 Recueil Officiel (2010) 57. A. Racke GmbH and Co. v. Hauptzollamt Mainz, C-162/96, Advocate General Jacobs, Opinion, e.c.r. I-3684 (1998).

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undertaken.24 As stated by the International Court of Justice, the concept of “extent” relates to the burden of the obligation still to be performed, indeed in the change must have increased the burden, rendering the obligation something essentially different.25 The obligation has to become, for one of the parties, an intolerable burden or an unreasonable sacrifice which was not contemplated in the treaty.26 The matter is complex. To date, no international tribunal has applied the doctrine of fundamental change of circumstances, but at the same time no international tribunal has denied its existence:27 “in almost all cases in which the doctrine has been invoked before an international tribunal, the latter, while not rejecting it in principle, has refused to admit that it could be applied to the case before it”.28 This is because “the threshold for what amounts to a fundamental change is high, as is evident from the wording of Article 62 of the vclt”,29 that expresses the principle in a negative and conditional way (“a fundamental change of circumstances […] may not be invoked [the principle] unless”). As a matter of fact, the icj itself stated that such wording “requires that the plea of fundamental changes of circumstances be applied only in exceptional cases”.30 Thus, the termination of a treaty due to the application of the rebus sic stantibus clause is an exception, while stability is the rule.31 Accordingly, in the two main cases dealing with Article 62 of vclt (the Fisheries Jurisdiction Case and the Gabcikovo-Nagymaros Dam Dispute) the icj rejected the plea of termination of the treaty due to fundamental change of circumstances. The only case in which the doctrine at hand was upheld by an international  Court, is the cjeu case Racke v. Hauptzollamt Mainz.32 Following the outbreak of the hostilities in former Yugoslavia, the Council of the European 24

25 26 27 28 29 30 31 32

T. Giegerich, ‘Article 62, Fundamental Change of Circumstances’ in O. Dorr and K. Schmalenbach (eds.), Vienna Convention on Law of Treaties: A Commentary (Berlin: Springer, 2012), p. 1089. Fisheries Jurisdiction (United Kingdom v. Iceland), Judgment of 2 February 1973, i.c.j. Reports 1973, para. 43. A. Vanvoukos, Termination of Treaties in International Law: the Doctrine of Rebus sic Stantibus and Desuetude (Oxford: Clarendon Press, 1985), p. 194. A. Aust, Modern Treaty Law and Practice (3rd ed., Cambridge: Cambridge University Press, 2014), p. 263. R. Jennings and A. Watts, Oppenheim’s International Law (Oxford: Oxford University Press, 1992), p. 1307. M. Fitzmaurice and O. Elias, Contemporary Issues in The Law of Treaties (2005), p. 183. Case concerning the Gabcikovo-Nagymaros Project (Hungary v. Slovakia), Judgment of 25 September 1997, i.c.j. Reports 1997. M. Fitzmaurice and O. Elias, supra note 29, p. 183. A. Racke GmbH and Co. v. Hauptzollamt Mainz, Case C-162/96, Advocate General Jacobs, Opinion, e.c.r. I-3655 (1998).

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Communities suspended the operations of the Cooperation Agreement concluded with Yugoslavia. As a result, an importer of Yugoslav wines commenced litigation before a German Court, which led to a request to the European Court of Justice for a preliminary ruling as to the validity of the suspension. The Court found that two conditions were to be satisfied for a successful invocation of the fundamental change of circumstances: from one side, the “maintenance of a situation of peace” in the host State, as it is “indispensable for neighbourly relations”. Nonetheless, the Court found that this was not applicable to the case. From the other side, the Court ruled that it is sufficient that no purpose was served by continuing to grant preferences with a view to stimulating trade where Yugoslavia was breaking up as customary international law does not require an impossibility to perform obligations.33 This decision has been regarded as a more lenient version of the doctrine of fundamental change of circumstance than the one of the icj’s.34 In any case, it must be also considered that the background situation was something different from the icj cases analysed earlier (was in a neighbour country in spite a ceasefire agreement, etc.). It must also be taken into account that the termination/suspension of the bit – for States that are parties to the Vienna Convention – is not automatic and the procedure set forth by section 4 of the Vienna Convention applies. In any event, the arbitration clause included in the bit/fcn will continue to be binding for the States and the sanctioned State would be entitled to claim compensation for breach of treaty obligations in the meantime. In a possible dispute, the European State might argue that in case of non-compliance with eu sanctions, it would be reprimanded by eu institutions, but the sanctioned State could easily object that this is a domestic problem with no relevance on an international level. Invoking us and eu sanctions is similar to invoking internal laws for justification of breach. Neither party can resort to conflicting internal laws for the breach of a contract.35 Indeed, similarly to us sanctions,36 eu sanctions are not compelling for non-member States. However, unlike with the us, a specific argument relating to eu member States could be invoked, i.e. the fact that the eu is indeed an international organisation, whose determinations are separated from those of single eu member states. 33 34

M. Fitzmaurice and O. Elias, supra note 29, p. 184. J. Klabbers, ‘Re-inventing the Law of Treaties: the Contribution of the ec Court’, 30 Netherlands Yearbook of International Law (1999), p. 59. 35 F. Ghodoosi, ‘Combating Economic Sanctions: Investment Disputes in Times of Political Hostilities, A Case of Study of Iran’, cit., p. 1776. 36 In Hajmaghani v. Giti Tajhiz Tec Co Ltd (Paris Appellate Court, Case No. 12/23757) the Judge found that a us ban prohibiting to sell goods to Iran and potentially affecting a contract did not apply for reasons of applicable law under Article 9 of Regulation Rome i.

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In this respect, the Draft Articles on Responsibility of States for Internationally Wrongful Acts (darsiwa)37 and, particularly, Articles 17 and 18, seems to be of interest. Pursuant to Articles 17 and 18 the State which directs and controls another State or coerces the same to commit an internationally wrongful act is internationally responsible for that wrongful act. As long as a ‘binding resolution’ can be assimilated to a form of direction and control, some scholars have argued that according to Article 17 darsiwa, an international organisation is responsible if a member State violates an international obligation for implementing a legally binding act.38 However, this does not automatically excludes the joint responsibility of the member State, which remains an open issue39 also in light of Article 57 darsiwa, whereby “These articles are without prejudice to any question of the responsibility under international law of an international organization, or of any State for the conduct of an international organization”.40 Clearly this issue requires further investigation. Unfortunately, State practice provides no support since States are quite reluctant to bring claims against their counterparties in case of international sanctions. Countermeasures are, indeed, clearly easier, more effective and represent the swiftest possible reaction for the sanctioned State. For instance, after eu sanctions were issued against Russia due to the Ukrainian crisis, Russia adopted counter-restrictive measures against European countries, such as Decree (Ukaz) no. 560, a ban over eu agricultural products41 and – so far – no eu member State has undertaken any claim in response. 4

The Implementation of International Sanctions at a Domestic Level: A Justification for Withdrawal or a Ground for Compensation?

International sanctions also impact contractual relationships between sanctioned States and private parties or – in case of targeted sanctions – between 37

Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, ilc, u.n. Doc. A/RES/56/83 (2001) [hereinafter, darsiwa]. 38 N. Ronzitti, Introduzione al Diritto Internazionale, cit., p. 407. 39 Such question was actually arisen by the Special Rapporteur in the sixth un Commission. In particular it was questioned if a binding decision of an international organisation can be seen as a circumstance precluding wrongfulness for the complying member State. See u.n. Doc. A/C.6/60/S.R.12 (23 November 2005). 40 Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, ilc, u.n. Doc. A/RES/56/83 (2001), p. 142. 41 See http://www.confindustria.it, i.e. the website of the General Confederation of Italian Industry.

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corporations/individuals. For instance, many multinational corporations that principally invested in the oil and gas sectors have withdrawn their business due to sanctions (including the targeted sanctions) that have affected the Islamic Republic of Iran. Nonetheless, the paper shall mainly focus on targeted sanctions as this entails multiple (and new) issues on various levels.42 Consider the following scenarios: − a Rome-based company enters into a supply contract with a foreign seller which, after the execution of the first supplies and before finalisation of any payment, is included among those listed entities whose assets and cash flows are frozen; or − a Milan-based manufacturer enters into a supply contract with a foreign buyer, which is subsequently sanctioned with a ban to export its own goods. Should the Roman buyer execute the payment despite the ‘freezing asset measure’? Would the company in Milan find itself under the obligation to supply relevant commodities notwithstanding the freezing asset? What contractual remedies could these companies seek? In short: what happens to contractual obligations hit by targeted sanctions? In attempting to answer these questions, it is to be observed that before making any decisions, companies are first to establish whether – in relation to the relevant sanction – they benefit from any exemption (e.g. because the sanction gives parties to affected pre-existing contracts a certain amount of time to comply with the new sanctions regime) or whether they can seek licences from relevant authorities to exempt them from the prohibition in question (e.g. licences by uk Asset Freezing Unit of the hm Treasury that are granted – in limited cases – on a case-by-case basis).43 English Courts, for instance, appear to closely connect the fate of a contract affected by a targeted sanction to the exemption regime as they consider this issue from the angle of the doctrine of frustration of contract. There is frustration in the event of a fundamental change in circumstances subsequent to the conclusion of the contract, this change being not a fault of either the parties, resulting in the contract being either impossible to perform or deprived of its commercial purpose. In this event, in which neither party may sue for breach, the contract is frustrated and each party is discharged from future obligations under the same contract. 42 43

C. Tevendale and M. De Brugiere, ‘Contractual Disputes and Practical Implications Arising from Sanctions in the Aftermath of the Arab Springs’, 22 World ecr (2013), p. 2. Ibid., p. 2.

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As a general remark, English Courts are not persuaded by the theory whereby sanctions may release the parties from their contractual obligations on grounds of frustration, in line with the leading case Andrew Millar & Co Ltd v. Taylor and Co Ltd [1916] 1 kb 402, where the Court of Appeal found that a contract for export of goods was not frustrated by an embargo withdrawn after 15 days and before the end of the normal delivery period. Nonetheless, English case law has sometimes accepted the hypothesis that contract may be frustrated by sanctions. According to the English Court’s main tendency, in order to argue that a sanction has frustrated a contract, it is necessary to prove that no licence could be obtained or that – despite the use of the best efforts –, the licence was not accessible. Indeed, even if sanctions might frustrate a contract by making the performance impossible, they will not cause such outcome in case of evidence that a licence could be sought and expected to be forth coming.44 This conclusion derives from the reasoning standing behind two major cases in terms of sanctions affecting contracts: Melli Bank plc v. Holbud Ltd [2013] ewhc 1506 (Comm.) and dvb Bank se and others v. Shere Shipping Co Ltd and others [2013] ewhc 2321 (Comm.). In both cases, the Court rejected the defendant’s argument whereby the relevant contract was frustrated on the basis that, inter alia, the defendant itself had not applied for a licence which could have been obtained and enabled the parties to perform the contractual obligations. On the other side, in the event that the impossibility to obtain a licence made an obligation incapable of being performed indefinitely due to the existence of sanctions, the result is that a supervening event has significantly changed the nature of the contractual obligations and, in these cases, the contract may be well considered frustrated, as noted by scholars.45 Although the Courts have taken a robust attitude to businesses seeking to avoid their obligations, in some cases they have also recognized that banks and other businesses may be unable to perform contracts as a result of sanctions. For example, in AI-Kishtaini v. Shansal [2001] ewca Civ 264, the Court of Appeal held (with some reluctance) that a debtor who had repaid more than the amount due to his creditor was not entitled to recover the overpayment because the payment had contravened the sanctions against Iraq which were in force at the time. The Court of Appeal also rejected the debtor’s argument that this bar to recovery contravened the debtor’s right to the peaceful enjoyment of his property, holding that the case was clearly within the public

44 45

J. Fisher qc and A. Baradon, ‘Assessing and Managing the Impact of Economic Sanctions on Commercial Contracts’, Practical Law, October 2015. Ibid.

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interest exception to this right (not least because this was another example of a situation in which the parties could have obtained a licence for the payment). British Courts’ approach, despite offering remarkable inputs, can hardly be relied upon especially in those States where frustration of contract is not part of the relevant legal system. In these countries, Courts have faced the problem at issue from a different perspective, which is often connected to the notion of force majeure. Italian law, for instance, provides for a number of contractual remedies that a party may trigger to face the pathological phase of an agreement and/or a breach of contract. Among these remedies is allowing the parties to an agreement to seek compensation for damages and to unilaterally terminate the contract, this latter remedy being enforceable only under certain circumstances. Specifically, contract termination is possible whenever, after perfecting the agreement: (a) the counterparty has seriously breached the agreement; (b) the performance of the obligation has become excessively onerous because of extraordinary and unforeseeable events; (c) the implementation of the contract has become impossible due to an external event (so-called supervened impossibility, impossibilità sopravvenuta). In the event that termination is caused by a serious breach of the contract, the performing party (i.e. the party not in breach) may also seek damage compensation. Conversely, this claim is not explicitly provided for the case of supervened impossibility.46 Furthermore, damage compensation can generally be sought by creditors in the event the counterparty does not correctly perform the relevant obligation, except if the latter entity proves that the breach of contract stems either by a supervened impossibility to perform the obligation or by other factors that are not attributable to its own conduct. In terms of contracts affected by sanctions, inspiring inputs can be retrieved from the case Fincantieri-Oto Melara S.p.A v. Iraq Government and Ministry of Defence addressed by the Court of First Instance of Genoa in 1995. In the 1980’s a number of Italian warships manufacturers entered into a supply contract with the Iraqi Ministry of Defence for the supply of warships and weapons. Subsequently, part of the supply could not be provided because of the embargo sanction that affected Iraq following their invasion of Kuwait in 1990. The

46

Article 1463 and following of the Italian Civil Code – regulating the supervening impossibility – do not also provide with compensation of damages. For this reason, this kind of remedy has also been renamed “termination without compensation”, see V. Roppo, Il Contratto (Milano: Giuffrè Editore, 2001), p. 961.

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Court of First Instance of Genoa ruled that the contract was to be considered terminated due to supervened impossibility faced by the Italian companies in performing the relevant obligation, i.e. the supply. Interestingly, the Court found that the abovementioned impossibility was attributable to, and caused by, Iraq because the country had consciously – and culpably – exposed itself to the risk of incurring international sanctions by invading Kuwait. In light of the above, the Court of First Instance of Genoa upheld the plaintiff’s claim, ruling for the termination of the contract and finding the Italian companies entitled to be compensated by Iraq’s government for its culpable conduct. Agreeing with the general principle set out by the Fincantieri-Oto Melara v. Iraq case, some Italian scholars have argued that the termination of the abovementioned contract would not be justified under the ‘supervened impossibility’ clause. Rather, in this case Fincantieri-Oto Melara’s right to consider the agreement as terminated would find its own cause in a ‘breach of contract’ carried out by the Iraqi government. To support their argument, scholars recall the bona fides clause (buona fede contrattuale) which they consider breached when a party engaging in an illicit conduct (attack on Kuwait) capable of making the counter-obligation (supply of ships and other assets) impossible to execute.47 Agreeing with this interpretative line would make it easier to justify the award of damage ordered by the Court of First Instance of Genoa, which, as seen above, under Italian law is explicitly provided only for termination for serious breach of contract. However, the scholars’ theory, despite being stimulating and appreciable, appears far-fetched as it could hardly be argued that a conduct that has nothing to do with the contractual obligations set forth by the relevant agreement can fall within the scope of ‘breach of contract’. In short, scholars appear to base their approach on the principle that “a self-induced frustration is not a frustration at all, but a breach of contract”.48 The Fincantieri-Oto Melara v. Iraq case sets out a post-sanction scenario that could theoretically be deemed viable also in the context of contractual relationship where a party is included in the list of targetable entities. Indeed, in the event of a targeted sanction issued after the perfection (and possible partial performance) of the contract, the investor could trigger the unilateral termination of the agreement and, thus, argue that it is no longer bound to the contractual provisions and relevant obligations set forth therein. 47 48

A. Lazari, ‘Armi da guerra e guerra delle armi: prima condanna italiana per la Ybris di Saddam’, 2 Danno e responsabilità (1997), p. 217. P.S. Atiyah, An Introduction to the Law of Contract (Oxford: Clarendon Press, 1961), p. 141.

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This solution is also supported by the Vienna Convention on Contracts for the International Sale of Goods (cisg), and in particular by Article 79 (1), which codified the force majeure clause, even though non expressis verbis: “A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences”. In the us, contractual clauses considering the consequences of sanctions are also seen as falling within the scope of “contractual force majeure provisions”, i.e. clauses enumerating a list of extraordinary events which, if occurred, justify the breach of the contract. As far as the United States are concerned, the doctrine of force majeure is codified in ucc 2–6154 and excludes contractual liability of a party in the event that non-performance of the relevant obligation is due to “the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made (…)”. us Courts usually recognize two requirements that are to be met for event of these types (including government sanctions) to justify the non–performance of the relevant obligation: (i) the event must be beyond the parties’ reasonable control; and (ii) the event must make on-going performance commercially impracticable or impossible.49 The force majeure clause of the icc mirrors, for instance, the above mentioned provision, and, in addition, lists the various impediments tantamount to force majeure, including governmental measures (typically embargoes). The essential elements that need to be satisfied to invoke force majeure are the unforeseeability of the impediment and, its inevitability, its irresistibility (i.e. outside the control of the parties), and that it must render performance of the obligation impossible. In general, trade sanctions imposed are deemed to be force majeure events under the theory known as fait du prince (act of Government). As with other impediments, the nature and effects of the fait du prince are critical to decide whether the sanctions are tantamount to force majeure.50 By way of example, a Hungarian arbitral tribunal found that the sanctions imposed by the un against the Socialist Federal Republic of Yugoslavia 49

50

T.S. Hishoff, J.R. Miller, ‘Force Majeure and Commercial Impracticability: Issues to Consider Before Next Hurricane or Natural Disaster Hits’, 29 Michigan Business Law Journal (2009), p. 17. E. Geisinger, P. Bartsch, J. Raneda, S. Ebere, ‘The Impact of International Trade Sanctions on Contractual Obligations and on International Commercial Arbitration’, 4 International Business Law Journal (2012), pp. 405–457.

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amounted to a force majeure event within the meaning of Article 79 cisg, because it prevented paying the Yugoslav seller of goods during the time of the embargo.51 Force majeure, on the other hand, tends to be strictly applied also by Russian Courts. In Meat Yard llc v. Russian Agricultural Bank ojsc (Case No. A218837/2012), the Russian Federal Court found that an order issued by a Russian authority itself, banning the import of goods from the European Union, did not represent a force majeure event capable of being invoked by the parties. More specifically, Meat Yard was a Russia-based slaughterhouse selling meat. Russian Agricultural Bank ojsc, a bank specializing in sponsorship of entities conducting business in the area of agriculture, provided Meat Yard with three loans in September, October and December 2011, all to be returned in two years. However, In March 2012 the Russian Federal Service for Veterinary and Phytosanitary Surveillance issued an order prohibiting import of livestock from the European Union in the Russian Federation. Meat Yard filed a claim to alter the terms of Loan agreements concluded with Russian Agricultural Bank on the basis of fundamental change of circumstances, asking the Court to postpone the due dates under the Loan agreements. Meat Yard invoked the Order as the one giving rise to a fundamental change of circumstances. The Courts of all instances analysed the Order not only from the perspective of fundamental change of circumstances, but also from a force majeure perspective. The reasoning appears to be a bit clumsy, but it is useful as it is a rare case flashing light on the attitude of Russian Courts toward sanctions. Eventually, the Federal Commercial Court for the North-West region (Court of Cassation) dismissed the argument that the Order represented a fundamental change of circumstances and a force majeure event and noted that entrepreneurship is risky by its nature and business difficulties constitute an essential part of it. In the Court’s view, considering that there had been examples of the same orders in the past, Meat Yard could have predicted the issuance of the Order. Hence, in the Court of Cassation’s view import restrictions did not amount to a force majeure event. The risk, which typically resides within the entrepreneurial business activity, has been identified as a cause to exclude the force majeure event as seen in the Tekhnoline llc v. Roskarantinservice llc (Case No. A05-7583/2012), which was again finally settled by the Federal Commercial Court. 51

Arbitration Court of the Chamber of Commerce and Industry of Budapest, Case No. vb 96074, 10 December 1996.

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Tekhnoline (the buyer) concluded a sales contract with Roskarantin­ service (the seller). The goods were to be supplied in three instalments. Roskarantinservice supplied the first two instalments. However, the third instalment was not supplied due to issuance of the order of the Government of the Russian Federation prohibiting import of livestock. Tekhnoline filed a claim for return of the part of the advance payment as well as interest. Roskarantinservice invoked the Disposition as a circumstance allowing the exemption defence. The Russian Courts which dealt with these cases pointed out that the sales contract did not specify the goods’ necessary country of origin, therefore, the goods could be purchased by the seller elsewhere. In addition, the seller was a commercial entity, which by undertaking to supply the goods agreed to bear all risks related to such an undertaking and had to plan the dates of supplies in such a way, as to allow it to duly fulfil its obligations. Thus, the Order did not amount to a force majeure event and Tekhnoline’s claim was therefore upheld. In addition to what has been mentioned, in terms of European Restrictive Measures it is to be highlighted that eu regulations which impose sanctions now often include a provision which tends to give an answer to the question we raised at the beginning of this paragraph. This clause usually reads as follows: “Refusal to make funds or economic resources available, carried out in good faith on the basis that such action is in accordance with the Regulation, shall not give rise to liability of any kind on the part of the natural or legal person or entity implementing it, or its directors or employees, unless it is proved that the funds and economic resources were frozen as a result of negligence”.52 This may provide a defence to liability for breach of contract.53 In this regard, in Soeximex sas v. Agrocorp International Pte Ltd [2011] ewhc 2743 (Comm.) (an application to remit an arbitration award for reconsideration on the grounds of serious irregularity), Soeximex, a French company had agreed to buy Burmese grain from a Singaporean seller; the payment was to be made by letter of credit with “tt reimbursement from New York bank”. Soeximex failed to obtain the letter of credit and the seller treated this as a repudiatory breach and sought damages. Soeximex raised multiple arguments, among which, one may be relevant in other cases which involve eu sanctions issues. Although Soeximex had failed to show that the contract (or payment for

52 53

Council Regulation (eu) No. 45/2014 of 20 January 2014 amending Regulation (eu) No. 204/2011 concerning restrictive measures in view of the situation in Libya. J. Fisher qc and A. Baradon, supra note 44.

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it) would have breached eu sanctions, the Council Regulation imposing sanctions against Burma (194/2008, as amended) provided that if a party refused in good faith to make funds available on the basis that to do so would breach the eu sanctions, the refusal shall not give rise to any liability, unless it was provided that the refusal was the result of negligence (Article 14). Soeximex argued that it had acted in good faith and could therefore rely on this defence. The seller argued that this argument was bound to fail because it was the banks which had refused to open the letter of credit, not Soeximex. Mrs Justice Gloster dbe considered that this was a reasonable argument. As mentioned, the equivalent of the Article 14 defence is now a standard provision of eu sanctions regulations, and it is a point which is potentially important to banks and other financial institutions charged with implementing sanctions. On the other hand – and notwithstanding the foregoing – in some instances (e.g. provisions implementing sanction against Russia), eu regulations have expressly provided that sanctions could not be relied upon to justify failure to perform the obligations stemming out of a contract entered into prior to the date “on which such natural or legal person, entity or body was listed (…), provided that the Member State concerned has determined that the payment is not, directly or indirectly, received by [the person listed]”.54 Hence, for instance, in our case, the Italian company could invoke the termination of the agreement and opt not to proceed with the payment or with the supply of the manufactured commodities. Although this kind of approach would seem to be theoretically reasonable and applicable in a number of concrete cases, it also leaves a number of open issues. One of the problems, for instance, is that in some cases the continuing performance of the contract would constitute a criminal offence.55 As a matter of fact, in many instances, non-compliance with restrictive measures can lead to criminal sanctions such as fines or prison terms, and sometimes even to confiscation of assets. In certain jurisdictions, non-compliance can also result in the revocation or temporary suspension of export licences (for instance, relating to the export of military equipment). On the other hand, public opinion is also usually particularly harsh on business entities entering into a “pact with the devil”,56 so that, in certain cases, it

54 55 56

Article 2.5. Council Decision 2014/145/CFSP of 17 March 2014. J. Fisher qc and A. Baradon, supra note 44. E. Geisinger et al., supra note 50, p. 405.

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can turn out to be more convenient to terminate these types of contracts, also from a social perspective. In light of all the above and also due to the proliferation of trade sanctions as well as the continuous mutation of the sanctions regime vis-à-vis certain countries,57 actors in international trade must be cautious when engaging in transactions with sanctioned countries, entities or individuals. Usually, different domestic laws seem to adopt a similar approach to resolving the issues raised by the interaction between sanctions and contractual undertakings, and, more specifically, illegality where the contract was entered into after trade sanctions were already in place versus supervening impossibility where the parties entered into the contract prior to the entry into force of the trade sanctions.58 That is why solutions to the questions and issues raised at the opening of this paragraph might be given by the contracting parties themselves in the phase of the formation of the agreement. Indeed, nowadays, the most “prudent”59 and farsighted investors opt to place “anti-international-sanction” representations and obligations in contractual arrangements. As a matter of fact, sophisticated parties already include in their contracts provisions governing the allocation of risks in the event of governmental intervention, in particular where performance of the contractual undertakings is subject to an import or export licence. Such provisions are significantly important in business involving ‘sensitive’ sectors, such as the oil or nuclear industries, or where the parties enter into a contract for the delivery of goods to a State on which sanctions are likely to be imposed. According to such contractual provisions, the parties, inter alia: − declare not to be included in any sanction list nor to be controlled by or linked to any entity that is included in the sanction list; − declare not to be located or organised in any sanctioned country; − undertake not to contribute nor to fund any entity linked to the terrorism activities or included in the so-called black lists. Hence, in the context of international contracts, a good recommendable practice would be to conceive and include clauses and representations that clearly define the consequences of targeted sanctions on fate of the contract. In doing so, parties would be aware of their rights before such measures materialise, 57 58 59

See, for instance, the Vienna Agreement dated 14 July 2015 which lifted multilateral and national sanctions against Iran. E. Geisinger et al., supra note 50, p. 405. J. Fisher qc and A. Baradon, supra note 44.

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rather than after the sanctions event.60 This would result in making multinational, medium-sized and small companies feel safer in investing in those countries that are more exposed to the risk of targeted sanctions. 5

Concluding Remarks

International sanctions clearly impact on relationships between States at an international level and between contractual parties (both State and private entities) of transnational agreements. In addition, remedies for the parties to an international treaties or national contracts are not always available and straightforward. With respect to un sanctions, States may certainly rely on Article 103 of the un Charter to avoid consequences from non-compliance with treaty obligations at odds with the sanctions imposed by the Security Council but there are no similar provision that a State can invoke in case of eu sanctions. A number of provisions of the Vienna Convention on the Law of the Treaties may be used to trigger the termination or the suspension of the treaty that conflicts with the eu sanctions in force, but the path in these cases is not easy and the risk of being sued by other States for breach of treaty obligations and damage compensation clearly exists. It is for this reason that the eu institutions are trying to better refine the mechanism of sanctions by including some safeguard clauses. In the absence of a common regulation, the scenario is even more complicated when dealing with the impact of the international sanctions on contracts, governed by different national laws and enforced by State Courts or arbitrators. None of the national systems took into consideration in this paper has a specific legislation that clearly addresses the effects of the international sanctions on contracts and this issue is primarily faced by national Courts and arbitrator by interpreting and applying general rules of law. Some Courts relied on the doctrine of the frustration of contracts and some other to force majeure whilst, in some legal systems, sanctions cannot justify the withdrawal from contracts. The approach can 60

C. Tevendale and M. De Brugiere, supra note 42. The authors also highlight that problems can arise where contracts in a supply chain are not drafted consistently. Indeed, it may happen that despite a contracting party can claim force majeure under one contract, this do not mean that other parties will be able to claim under other contracts lower down the chain. This is so because “the scope of the force majeure provision – and perhaps the governing law- may well vary. If so, one party may find itself in the invidious position of having to accept non-performance by its supplying counterparty whilst being held accountable for non-delivery by the counterparty to which it is liable to sell”.

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therefore vary and parties to a certain contract are exposed to the risk of conflicting decisions. It is also for this reason that international sanctions are currently subject of discussion during the negotiations of transnational contracts and some safeguard clauses are often included in the final agreement. The last issue that might affect parties’ remedies in case of international sanctions is their reviewability by Courts or arbitrators but the solution is not straightforward and cannot be dealt with in this paper. Theoretically, two kinds of scrutiny by Courts or by arbitrators are possible. One is what we name ‘hard scrutiny’, which means the review of the legitimacy of a measure. In principle, Courts cannot judge on the merit of a political choice.61 The other is what we may call ‘formal scrutiny’ and this implies checking that the measures have been implemented in compliance with national – or eu – procedures. Hence, judicial ‘review’ may only be the formal assessment of compatibility of the sanctions with fundamental human rights or procedural rules. The ‘hard scrutiny’ is roughly the equivalent of a diffuse system of judicial review of constitutionality à la Marbury vs. Madison62 and if the European Court of Justice certainly has – to certain extent – a control over acts adopted by eu institutions, the reviewability of un sanctions by the icj is more debated as testified by the Lockerbie affair.63 In any event, all the procedural requirements that must be met to apply for the review of international sanctions before any competent international Court limit the chances of a real scrutiny. The ‘formal scrutiny’ is a more feasible option but is also less effective as the Kadi Cases64 show. Even if Mr Kadi was excluded from the list of suspected terrorists subject to freezing assets measures decided at a un level for breach of certain requirements,65 a new regulation was issued and Mr Kadi was listed again and had to file a new motion to be excluded. This is certainly not the right place to deal with this delicate issue but the approach of the national Courts would be likely more homogeneous, should a judicial review of international sanctions be granted in an effective and fair way, and also the risk that international sanctions could be disregarded would be likely limited. 61 62 63

64 65

T.M. Franck, ‘Courts and Foreign Policy’, 83 Foreign Policy (1991), p. 66. J.E. Alvarez, ‘Judging the Security Council’, 90 American Journal of International Law (1996), p. 2. Case concerning questions of interpretation and application of 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United States), Preliminary Objections, Judgment of 27 February 1998, i.c.j. Reports 1998, para. 115 [hereinafter, Lockerbie]. See also Lockerbie, 68 (Dissenting opinion of Judge Scwhebel). Kadi ‘I’ case; Commission and United Kingdom v. Yassin Abdullah Kadi (No. 2), Joined Cases C-584/10 P, C-593/10 P and C-595/10, (2011), o.j. C72/9 [hereinafter, Kadi ‘ii’ case]. Kadi ‘ii’ case, Opinion 16.

chapter 11

un Sanctions Targeting Individuals and icc Proceedings: How to Achieve a Mutually Reinforcing Interaction Marina Mancini Abstract This chapter shows that the Security Council sanctions mechanism and the icc mechanism intersect in many ways. It examines how they impact on each other and investigates how frictions between them can be removed and a mutually reinforcing interaction can be achieved. The author submits that a harmonious relationship between the two mechanisms would be of mutual benefit and advance the achievement of their respective goals, and identifies several steps that should be taken to this end.

Keywords Security Council – International Criminal Court – asset freeze – travel ban – reparations

1 Introduction The practice of the last decade reveals that an increasing number of individuals are subject to both un Security Council targeted sanctions and icc investigation or prosecution. This can be explained by the fact that the Security Council sanctions often target individuals who are deemed responsible for situations threatening or violating international peace and security and that the icc jurisdiction covers, in the words of Article 1 of the Rome Statute, “the most serious crimes of international concern”, which are frequently committed in those situations. Indeed, the Security Council sanctions mechanism and the icc mechanism may have a relevant impact on the attainment of each other’s goal, the maintenance or restoration of the international peace and security and the pursuit of individual accountability for the most serious international crimes respectively. Depending on the circumstances, they may support or hinder the achievement of each other’s goal. This chapter focuses precisely on the interplay between the

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_012

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two mechanisms. It investigates how they impact on each other and explores how frictions between them can be removed and a mutually reinforcing interaction can be achieved. 2

un Targeted Sanctions and icc Investigations

For the reasons stated above, it is not surprising that the icc Prosecutor initiates investigations in respect of crimes committed in situations which are also on the Security Council’s agenda. As at the time of writing (June 2015), the Prosecutor had opened an investigation into five situations in which targeted sanctions were adopted by the Security Council, namely the situations in the Democratic Republic of the Congo (2004),1 Darfur-Sudan (2005),2 the Central African Republic (2007),3 Libya (2011)4 and Côte d’Ivoire (2011).5 The situations in the Democratic Republic of the Congo and the Central African Republic were referred to the Prosecutor by the territorial State (self-referral), under Article 14 of the Rome Statute.6 Those in Darfur-Sudan and Libya were referred to the Prosecutor by a Security Council Resolution adopted under Chapter vii of the un Charter, in accordance with Article 13 (b) of the Statute.7 As to the situation in Côte d’Ivoire, the Prosecutor initiated an investigation proprio motu, following the Pre-Trial Chamber authorization, pursuant to Article 15 of the Statute.8 Whenever they intervene in the same situation, the icc Prosecutor and the Security Council might greatly benefit, in fulfilling their respective mandates, 1 ICC-OTP-20040623-59, Press Release: The Office of the Prosecutor of the International Criminal Court Opens Its First Investigation, 23 June 2004. 2 ICC-OTP-0606-104, Press Release: The Prosecutor of the icc Opens Investigation in Darfur, 6 June 2005. 3 ICC-OTP-20070522-220, Press Release: Prosecutor Opens Investigation in the Central African Republic, 22 May 2007. 4 ICC-OTP, Statement: icc Prosecutor to Open an Investigation in Libya, 2 March 2011. 5 ICC-CPI-20111003-PR730, Press Release: icc Pre-Trial Chamber iii Authorises the Prosecutor to Launch an Investigation in Côte d’Ivoire, 3 October 2011. 6 See: ICC-OTP-20040419-50, Press Release: Prosecutor Receives Referral of the Situation in the Democratic Republic of Congo, 19 April 2004; ICC-OTP-20050107-86, Press Release: Prosecutor Receives Referral Concerning Central African Republic, 7 January 2005. 7 As to Darfur-Sudan, see Security Council Resolution 1593 of 31 March 2005, para. 1. With regard to Libya, see Security Council Resolution 1970 of 26 February 2011, para. 4. 8 ICC-02/11-14, Decision Pursuant to Article 15 of the Rome Statute on the Authorisation of an Investigation into the Situation in the Republic of Côte d’Ivoire, 3 October 2011.

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from enhanced cooperation. For example, regular exchange of information and documents on a confidential basis would help the Security Council Sanctions Committees to identify individuals who should be subject to sanctions and the Office of the Prosecutor to collect evidence against persons under investigation. With regard to this, one has to mention the 2004 Relationship Agreement between the un and the icc, which provides a framework for cooperation between the two international organizations.9 It requires them to “cooperate closely, whenever appropriate, with each other and consult each other on matters of mutual interest” (Article 3). In particular, the un and the Court are obliged to arrange “to the fullest extent possible and practicable” for the exchange of information and documents of mutual interest (Article 5, para. 1). As noted above, the supply of information and documents by the Prosecutor would certainly facilitate the Sanctions Committees’ work of identifying individuals who should be sanctioned. This is especially true when the Security Council sanctions are also directed at those responsible for acts that violate international humanitarian law or human rights law, as in the case of the travel ban and the asset freeze imposed with respect to the situation in the Central African Republic,10 Côte d’Ivoire,11 the Democratic Republic of the Congo,12 Libya13 and Sudan.14 On the other hand, it would be highly useful for the Prosecutor, when investigating a situation in which targeted sanctions have been imposed, whether referred by the Security Council or not, to expeditiously access information and documents of the relevant Sanctions Committee. In this regard, Article 18 of the above mentioned Relationship Agreement binds the un to cooperate with the Prosecutor and to enter into such arrangements or agreements as may be necessary to facilitate cooperation, when this is sought by the latter for the conduct of an investigation (para. 1). It also stipulates that the un and the 9

10 11 12 13 14

u.n. Doc. A/58/874, Relationship Agreement between the United Nations and the International Criminal Court, 20 August 2004. On the content of the agreement see Schabas, The International Criminal Court. A Commentary on the Rome Statute (Oxford: Oxford University Press, 2010), p. 73 ff. See Security Council Resolution 2134 of 28 January 2014, para. 37 (b). See: Security Council Resolution 1572 of 15 November 2004, para. 9; Security Council Resolution 1975 of 30 March 2011, para. 12. See: Security Council Resolution 1698 of 31 July 2006, para. 13; Security Council Resolution 1807 of 31 March 2008, para. 13 (d), (e). See: Security Council Resolution 1970 of 26 February 2011, para. 22 (a); Security Council Resolution 2174 of 27 August 2014, para. 4 (a). See Security Council Resolution 1591 of 29 March 2005, para. 3 (c).

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Prosecutor may agree that the former provide documents or information to the latter “on condition of confidentiality and solely for the purpose of generating new evidence” (para. 3). Nevertheless, it appears that up until now cooperation between the Security Council and the icc Prosecutor on the matters under analysis has been episodic and no direct line has been established between the Office of the Prosecutor and the Sanctions Committees.15 In light of this, in its thirteenth session (8–17 December 2014), the Assembly of States Parties to the Rome Statute called inter alia for “increased cooperation between Sanctions Committees and the Court”.16 3

un Targeted Sanctions and icc Arrest Warrants

At any time after the initiation of an investigation, the icc Prosecutor may request the Pre-Trial Chamber to issue a warrant of arrest against persons allegedly responsible for crimes within the Court’s jurisdiction, in accordance with Article 58, para. 1 of the Rome Statute. Whenever the Prosecutor’s request is granted, it is advisable that un targeted sanctions be imposed on the individuals subject to the arrest warrant. As noted above, the icc has jurisdiction over the most serious crimes of concern to the international community, which are recognized in the Preamble of the Rome Statute to “threaten the peace, security and well-being of the world”. The Security Council’s imposition of a travel ban and an asset freeze can be a powerful tool for isolating the persons sought by the Court and preventing them from accessing resources to continue actions amounting to the above mentioned crimes and threatening international peace and security. Of course, this goal can be achieved only if the travel ban and the asset freeze are implemented effectively by all un members.

15 Kaye, The Council and the Court: Improving Security Council Support of the International Criminal Court, University of California, Irvine School of Law, 2013, p. 19. See ICCASP/12/42, International Criminal Court, Assembly of States Parties, Report of the Court on the Status of Ongoing Cooperation between the International Criminal Court and the United Nations, Including in the Field, 14 October 2013, para. 5, which notes that it is the un Office of Legal Affairs that transmits and coordinates the judicial cooperation requests of the icc organs to the un. 16 ICC-ASP/13/Res.5, Strengthening the International Criminal Court and the Assembly of States Parties, in ICC-ASP/13/20, Assembly of States Parties to the Rome Statute of the International Criminal Court, Thirteenth Session, New York, 8–17 December 2014, Official Records, vol. i, p. 35 ff., p. 38, para. 18 (b).

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In situations where the Security Council has already established a targeted sanctions regime, it is crucial that the relevant Sanctions Committee include the individuals subject to an icc arrest warrant in the sanctions list. This should raise no difficulty when sanctions also target those who commit violations of international humanitarian law or human rights law, as the persons sought by the icc easily fit in that category. If this is not the case, the Security Council should consider amending the designation criteria so as to sanction the aforementioned category of individuals too. The adoption of sanctions against persons subject to an icc arrest warrant is all the more important in situations which have been referred to the Prosecutor by the Security Council. As a matter of fact, it is expected that at least in these situations the Council will support the Court’s action by taking appropriate measures. The failure to do so undermines the Security Council’s own credibility. As to the five situations currently under icc investigation in which a Security Council’s targeted sanctions regime is in place, only in three of them do the persons subject to an arrest warrant feature on the sanctions list. They are the situations in the Democratic Republic of the Congo, Libya and Côte d’Ivoire. Indeed, in all of them the issue of the arrest warrant by the icc PreTrial Chamber followed the listing by the relevant Sanctions Committee. With regard to the situation in the Democratic Republic of the Congo, an arrest warrant was issued against Thomas Lubanga Dyilo (10 February 2006),17 Bosco Ntaganda (22 August 2006 and 13 July 2012),18 Germain Katanga (2 July 2007),19 Callixte Mbarushimana (28 September 2010),20 Sylvestre Mudacumura (13 July 2012)21 and Mathieu Ngudjolo Chui (6 July 2007).22 All but Mbarushimana were included in the sanctions list, which is maintained by the Sanctions Committee established pursuant to Security Council Resolution 1533 (2004), 17

ICC-01/04-01/06-2, Chambre préliminaire i, Le Procureur c. Thomas Lubanga Dyilo, Mandat d’arrêt, 10 février 2006. 18 See: ICC-01/04-02/06-2, Chambre préliminaire i, Le Procureur c. Bosco Ntaganda, Mandat d’arrêt, 22 août 2006; ICC-01/04-02/06-36-Red, Pre-Trial Chamber ii, The Prosecutor v. Bosco Ntaganda, Decision on the Prosecutor’s Application under Article 58, 13 July 2012. 19 ICC-01/04-01/07-1, Chambre préliminaire i, Le Procureur c. Germain Katanga, Mandat d’arrêt à l’encontre de Germain Katanga, 2 juillet 2007. 20 ICC-01/04-01/10-2, Chambre préliminaire i, Le Procureur c. Callixte Mbarushimana, Mandat d’arrêt à l’encontre de Callixte Mbarushimana, 28 septembre 2010. 21 ICC-01/04-01/12-1-Red, Pre-Trial Chamber ii, The Prosecutor v. Sylvestre Mudacumura, Decision on the Prosecutor’s Application under Article 58, 13 July 2012. 22 ICC-01/04-02/07-1, Chambre préliminaire i, Le Procureur c. Mathieu Ngudjolo Chui, Mandat d’arrêt à l’encontre de Mathieu Ngudjolo Chui, 6 juillet 2007.

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on 1 November 2005.23 Mbarushimana was listed on 3 March 2009.24 As for the situation in Libya, on 27 June 2011 Pre-Trial Chamber i issued an arrest warrant against Muammar Gaddafi,25 Saif Al-Islam Gaddafi26 and Abdullah Al-Senussi.27 They had been on the sanctions list, which is maintained by the Sanctions Committee established under Security Council Resolution 1970 (2011), since 26 February 2011.28 Regarding the situation in Côte d’Ivoire, an arrest warrant was issued against Laurent Gbagbo (23 November 2011),29 Charles Blé Goudé (21 December 2011)30 and Simone Gbagbo (29 February 2012).31 Blé Goudé was included in the sanctions list, which is maintained by the Sanctions Committee established pursuant to Security Council Resolution 1572 (2004), on 7 February 2006; while Laurent Gbagbo and Simone Gbagbo were listed on 30 March 2011.32 In striking contrast, up to the time of writing, none of those who were subject to an arrest warrant in connection with the situations in Darfur-Sudan and the Central African Republic has been included in the sanctions list by the relevant Sanctions Committee. However, as to the situation in the Central African Republic, only one arrest warrant was issued for the alleged commission of international crimes. This was the arrest warrant against Jean-Pierre Bemba Gombo for crimes against humanity and war crimes, which was issued on 23 May 2008.33 All the other arrest warrants, i.e. those of 20 November 2013 23 24 25 26 27 28 29 30 31 32 33

List established and maintained by the 1533 (2004) Committee, available at http://www .un.org/sc/committees/1533/pdf/1533.pdf, accessed on 30 June 2015. Ibid. ICC-01/11-01/11-2, Pre-Trial Chamber i, Warrant of Arrest for Muammar Mohammed Abu Minyar Gaddafi, 27 June 2011. ICC-01/11-01/11-3, Pre-Trial Chamber i, Warrant of Arrest for Saif Al-Islam Gaddafi, 27 June 2011. ICC-01/11-01/11-4, Pre-Trial Chamber i, Warrant of Arrest for Abdullah Al-Senussi, 27 June 2011. List established and maintained by the 1970 (2011) Committee, available at http://www .un.org/sc/committees/1970/1970.pdf, accessed on 30 June 2015. ICC-02/11-01/11-1, Pre-Trial Chamber iii, Warrant of Arrest for Laurent Koudou Gbagbo, 23 November 2011. ICC-02/11-02/11-1, Pre-Trial Chamber iii, Warrant of Arrest for Charles Blé Goudé, 21 December 2011. ICC-02/11-01/12-1, Pre-Trial Chamber iii, Warrant of Arrest for Simone Gbagbo, 29 February 2012. List established and maintained by the 1572 (2004) Committee, available at http://www .un.org/sc/committees/1572/pdf/1572.pdf, accessed on 30 June 2015. ICC-01/05-01/08-1, Chambre préliminaire iii, Le Procureur c. Jean-Pierre Bemba Gombo, Mandat d’arrêt à l’encontre de Jean-Pierre Bemba Gombo, 23 mai 2008.

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against the same Bemba Gombo, Aimé Kilolo Musamba, Jean-Jacques Mangenda Kebongo, Fidèle Babala Wandu and Narcisse Arido, were issued for alleged offences against the administration of justice in connection with the Bemba Gombo case opened in 2008.34 Moreover, all the persons sought by the icc but Arido were arrested and transferred to The Hague before the adoption of Security Council Resolution 2134 (2014), which imposed individual targeted sanctions in connection with the situation in the Central African Republic.35 With regard to the crimes allegedly committed in Darfur-Sudan, an arrest warrant was issued against Ahmad Muhammad Harun and Ali Muhammad Ali Abd-Al-Rahman (also known as Ali Kushayb) on 27 April 2007,36 against the Sudanese President Omar Al Bashir on 4 March 2009 (for crimes against humanity and war crimes)37 and on 12 July 2010 (for genocide),38 and against Abdel Raheem Muhammad Hussein on 1 March 2012.39 At the time of writing, all the aforementioned persons are still at large.40 Several States called, without success, for their inclusion in the Sudan sanctions list, which is maintained by the Sanctions Committee established pursuant to Security

34

ICC-01/05-01/13-1-Red2, Chambre préliminaire ii, Le Procureur c. Jean-Pierre Bemba Gombo, Aimé Kilolo Musamba, Jean-Jacques Mangenda Kebongo, Fidèle Babala Wandu et Narcisse Arido, Mandat d’arrêt à l’encontre de Jean-Pierre Bemba Gombo, Aimé Kilolo Musamba, Jean-Jacques Mangenda Kebongo, Fidèle Babala Wandu et Narcisse Arido, 20 novembre 2013. 35 Information available on the icc website at http://www.icc-cpi.int/en_menus/icc/situations%20and%20cases/situations/situation%20icc%200105/Pages/situation%20icc -0105.aspx, accessed on 30 June 2015. 36 See: ICC-02/05-01/07-2, Pre-Trial Chamber i, The Prosecutor v. Ahmad Muhammad Harun (“Ahmad Harun”) and Ali Muhammad Ali Abd-Al-Rahman (“Ali Kushayb”), Warrant of Arrest for Ahmad Harun, 27 April 2007; ICC-02/05-01/07-3-Corr, Pre-Trial Chamber i, The Prosecutor v. Ahmad Muhammad Harun (“Ahmad Harun”) and Ali Muhammad Ali AbdAl-Rahman (“Ali Kushayb”), Warrant of Arrest for Ali Kushayb, 27 April 2007. 37 ICC-02/05-01/09-1, Pre-Trial Chamber i, The Prosecutor v. Omar Hassan Ahmad Al Bashir (“Omar Al Bashir”), Warrant of Arrest for Omar Hassan Ahmad Al Bashir, 4 March 2009. 38 ICC-02/05-01/09-95, Pre-Trial Chamber i, The Prosecutor v. Omar Hassan Ahmad Al Bashir (“Omar Al Bashir”), Second Warrant of Arrest for Omar Hassan Ahmad Al Bashir, 12 July 2010. 39 ICC-02/05-01/12-2, Pre-Trial Chamber i, The Prosecutor v. Abdel Raheem Muhammad Hussein, Warrant of Arrest for Abdel Raheem Muhammad Hussein, 1 March 2012. 40 Information available on the icc website at http://www.icc-cpi.int/en_menus/icc/ situations%20and%20cases/situations/situation%20icc%200205/Pages/situation%20 icc-0205.aspx, accessed on 30 June 2015.

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Council Resolution 1591 (2005).41 This Resolution imposed a travel ban and an asset freeze, inter alia, on individuals “who impede the peace process, constitute a threat to stability in Darfur and the region, commit violations of international humanitarian or human rights law or other atrocities” (para. 3 (c)) and mandated the Committee to designate persons subject to the said measures. President Al Bashir and the other individuals currently under an icc arrest warrant for crimes in Darfur apparently satisfy the above description. Their exclusion from the sanctions list appears to be due to the lack of consensus among the Committee members. It should not be forgotten that, like the other Sanctions Committees, the Sudan Sanctions Committee consists of all the members of the Security Council and it reaches its decisions by ­consensus of its members.42 Also in light of this case, in the last few years various States have repeatedly stressed the need for coordination between the Sanctions Committees and the icc so as to align the sanctions lists with the Court’s arrest warrants.43 The icc itself called for “the automatic listing of persons sought by the Court once a warrant for their arrest has been issued by a Pre-Trial Chamber for the alleged commission of crimes with the jurisdiction of the Court, particularly where the situation has been referred by the Security Council”.44

41

42

43

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List established and maintained by the 1591 (2005) Committee, available at http://www .un.org/sc/committees/1591/pdf/1591.pdf, accessed on 30 June 2015. See the remarks of: France, in u.n. Doc. S/PV.6974, Security Council, 6974th Meeting, 5 June 2013, p. 9; Australia, in u.n. Doc. S/PV.7080, Security Council, 7080th Meeting, 11 December 2013, p. 11; Luxemburg, ibid., p. 9; and Lithuania, in u.n. Doc. S/PV.7199, Security Council, 7199th Meeting, 17 June 2014, p. 10. Security Council Committee established pursuant to Resolution 1591 (2005) concerning Sudan, Guidelines of the Committee for the Conduct of Its Work, as revised and adopted on 23 December 2013, available at http://www.un.org/sc/committees/1591/pdf/Sudan _guide_E.pdf, accessed on 30 June 2015, pp. 1, 4. See the remarks of: France, in u.n. Doc. S/PV.6849, Security Council, 6849th Meeting, 17 October 2012, p. 23; Estonia, ibid., p. 28; Australia, in u.n. Doc. S/PV.6849 (Resumption 1), Security Council, 6849th Meeting, 17 October 2012, p. 7; Costa Rica, ibid., p. 17; Romania, in u.n. Doc. S/PV.7285 (Resumption 1), Security Council, 7285th Meeting, 23 October 2014, p. 3; and Malaysia, ibid., p. 22. See also: Mistry, Ruiz Verduzco, The un Security Council and the International Criminal Court, Chatham House, 16 March 2012, p. 9; Kaye, The Council and the Court: Improving Security Council Support of the International Criminal Court, cit., p. 21. ICC-ASP/12/42, International Criminal Court, Assembly of States Parties, Report of the Court on the Status of Ongoing Cooperation between the International Criminal Court and the United Nations, including in the Field, cit., p. 8.

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un Travel Ban and Transfer of Persons to or from the icc

As noted above, the Security Council’s imposition of a travel ban can significantly help isolate persons subject to an icc arrest warrant. However, absent a specific exemption, it practically prevents the State on whose territory such persons are found from transferring them to The Hague into the Court’s custody. This also occurs when, besides being a un member, the State at issue is a party to the Rome Statute, and consequently it is obliged to comply with the icc requests for arrest and surrender under Article 89, para. 1 of the Statute, since the obligations on un member States arising from the un Charter prevail over conflicting obligations under any other treaty according to Article 103 of the Charter. It is therefore essential that the Security Council lift the travel ban on the aforementioned individuals, so as to enable their transfer to The Hague. As a matter of fact, the travel ban also needs to be lifted when persons subject to it have received a summons to appear pursuant to Article 58, para. 7 of the Rome Statute, so that they can appear before the icc. In addition, an exemption from the travel ban is needed when the listed individuals have been acquitted or the charges against them have not been confirmed, in order to allow them to return from The Hague to the residence State, as well as when they have been convicted, so as to enable their transfer to the State where the sentence shall be served.45 However, only the most recent Security Council Resolutions imposing travel restrictions contain an exemption clause that covers many of the above mentioned cases. Such clause stipulates that the travel ban shall not apply “where entry or transit is necessary for the fulfillment of a judicial process”.46 As regards Security Council Resolutions establishing travel restrictions with respect to the situations currently under icc investigation, it is included only in Resolution 1970 of 26 February 2011 concerning Libya (para. 15 (b)) and Resolution 2134 of 28 January 2014 regarding the Central African Republic 45

46

See, for example, the case of Callixte Mbarushimana, who was arrested and surrendered to the icc custody by the French authorities on 25 January 2011. After Pre-Trial Chamber i declined to confirm the charges against him, Mbarushimana was released from the Court’s custody on French territory, as he requested, on 23 December 2011. ICC-CPI20111223-PR760, Press Release: Callixte Mbarushimana is Released from the icc Custody, 23 December 2011. See: Resolution 1988 of 17 June 2011 relating to the Taliban in Afghanistan, para. 1 (b); Resolution 1989 of 17 June 2011 concerning Al-Qaida, para. 1 (b); Resolution 2048 of 18 May 2012 regarding Guinea-Bissau, para. 5 (b); Resolution 2140 of 26 February 2014 relating to Yemen, para. 16 (b); Resolution 2206 of 3 March 2015 concerning South Sudan, para. 11 (b).

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(para. 31 (b)).47 Resolution 1649 of 21 December 2005 relating to the Democratic Republic of the Congo ambiguously stipulates that the travel ban shall not apply where the Sanctions Committee “authorizes in advance, and on a case by case basis, the transit of individuals…participating in efforts to bring to justice perpetrators of grave violations of human rights or international humanitarian law” (para. 3).48 It is not completely clear whether such individuals can be the alleged perpetrators themselves. The above mentioned clause providing for exemption from the travel ban “where entry or transit is necessary for the fulfillment of a judicial process” is certainly more appropriate. Nevertheless, not even it includes the cases where the listed individual needs to return from The Hague to the resident State following his or her acquittal or non-confirmation of the charges against him or her. Strikingly, no clause exempting the transfer to or from the icc from the travel ban, whatever its formula, is included either in Resolution 1591 of 29 March 2005 relating to Darfur-Sudan or in Resolution 1572 of 15 November 2004 or any of the subsequent Resolutions renewing the travel restrictions with regard to the situation in Côte d’Ivoire.49 Actually, up to now the transfer to The Hague of individuals sought by the icc and subject to a travel ban has always taken place on the basis of a case by case assistance provided by the relevant Sanctions Committee. For example, as for the transfer of Laurent Gbagbo from Abidjan to The Hague into the Court’s custody, on 29 November 2011 the Côte d’Ivoire Sanctions Committee approved a request for exemption from the travel ban, submitted by the Permanent Missions to the un of Côte d’Ivoire and the Netherlands,50 presumably on the ground that such exemption “would further the objectives of the Council’s 47 48

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The travel ban imposed by Resolution 2134 (2014) and the related exemptions were renewed until 29 January 2016 by Resolution 2196 of 22 January 2015 (paras. 4, 5). The same formula is contained in Resolution 1807 of 31 March 2008, para. 10 (c). The travel ban and the related exemptions thereby provided for were renewed until 1 July 2016 by Resolution 2198 of 29 January 2015, para. 3. See: Resolution 1643 of 15 December 2005, para 1; Resolution 1727 of 15 December 2006, para. 1; Resolution 1782 of 29 October 2007, para. 1; Resolution 1842 of 29 October 2008, para. 1; Resolution 1893 of 29 October 2009, para. 1; Resolution 1946 of 15 October 2010, para. 1; Resolution 1975 of 30 March 2011, para. 12; Resolution 1980 of 28 April 2011, para. 1; Resolution 2045 of 26 April 2012, para. 6; Resolution 2101 of 25 April 2013, para. 6; Resolution 2153 of 29 April 2014, para. 12; Resolution 2219 of 28 April 2015, para. 12. u.n. Doc. S/2011/808, Letter dated 29 December 2011 from the Chair of the Security Council Committee established pursuant to resolution 1572 (2004) concerning Côte d’Ivoire addressed to the President of the Security Council, Annex, para. 27.

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resolutions, for peace and national reconciliation in Côte d’Ivoire and stability in the region” under para. 10 of Security Council Resolution 1572 (2004).51 In this respect, it is to be noted that the Guidelines of the Côte d’Ivoire Sanctions Committee, as well as those of the other Sanctions Committees, specify that each request for exemption from the travel restrictions shall be submitted, on behalf of the listed person, to the Chairman of the Committee through the Permanent Mission to the un of his or her State of nationality or residence or through a un office.52 Although there is no information that the transfer of listed individuals to or from The Hague has ever been hindered by the relevant Sanctions Committee, there is no doubt that it could be facilitated by direct dialogue and routine cooperation between the icc and the Sanctions Committees.53 Above all, it could be expedited by the Security Council’s granting of an express exemption from the travel ban for the transfer to and from the Court.

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As to the transfer to the icc of Charles Blé Goudé, see u.n. Doc. A/69/321, Report of the International Criminal Court, 18 September 2014, para. 70. See Security Council Committee established pursuant to Resolution 1572 (2004) concerning Côte d’Ivoire, Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 13 June 2005 and revised on 1 July 2014, available at http://www.un.org/sc/ committees/1572/pdf/Guidelines-1%20July%202014.pdf, accessed on 30 June 2015, p. 13. See also: Security Council Committee established pursuant to Resolution 1533 (2004) concerning the Democratic Republic of the Congo, Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 6 August 2010, available at http://www .un.org/sc/committees/1533/pdf/S%20AC.43%202010%20Guidelines%20FINAL%20% 286%20August%202010%29.pdf, accessed on 30 June 2015, p. 13; Security Council Committee established pursuant to Resolution 1970 (2011) concerning Libya, Provisional Guidelines of the Committee for the Conduct of Its Work, as adopted by the Committee on 25 March 2011 and revised on 25 October 2011, available at http://www.un.org/sc/committees/ 1970/pdf/Provisional%20Guidelines.pdf, accessed on 30 June 2015, p. 10; Security Council Committee established pursuant to Resolution 1591 (2005) concerning the Sudan, Guidelines of the Committee for the Conduct of Its Work, as revised and adopted on 23 December 2013, available at http://www.un.org/sc/committees/1591/pdf/Sudan_guide_E. pdf, accessed on 30 June 2015, p. 11 f.; Security Council Committee established pursuant to Resolution 2127 (2013) concerning the Central African Republic, Guidelines of the Committee for the Conduct of Its Work, as revised and adopted on 19 February 2014, available at http://www.un.org/sc/committees/2127/pdf/CAR_Guidelines_v.4_E.pdf, accessed on 30 June 2015, p. 12. On this point, see the statement of the icc Prosecutor Fatou Bensouda at the Security Council meeting on the Security Council working methods of 23 October 2014: u.n. Doc. S/PV.7285, Security Council, 7285th Meeting, 23 October 2014, p. 5.

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un Asset Freeze and icc Forfeiture or Reparation Orders

Turning to the asset freeze imposed by the Security Council, as discussed above, it can help dry up the resources of persons sought by the icc, so that it is more difficult for them to keep perpetrating international crimes and remaining at large. However, once they have been tried and convicted, the Security Council’s asset freeze may prevent the enforcement of the Court’s sentence and reparation order. It is to be noted that, in addition to imprisonment, the icc may sentence a person convicted of a crime under Article 5 of the Rome Statute to a fine and/ or a forfeiture of proceeds, property and assets derived directly or indirectly from that crime, in accordance with Article 77, para. 2 of the Statute. Moreover, the Court may order reparations to the victims of the crime, to be provided by the convicted directly and/or through the Trust Fund for Victims under Article 75, para. 2 of the Statute.54 For the enforcement of fines, forfeiture or reparation orders, the icc needs the cooperation of the States where the property and assets of the sentenced person are located. Only States parties, however, are under an obligation to give effect to fines, forfeitures or reparations ordered by the Court, according to Article 109, para. 1 and Article 75, para. 5 of the Statute. Indeed, whenever the sentenced person is subject to an asset freeze pursuant to a Security Council Resolution, the State party on whose territory the property and assets at issue are located may be forced to choose whether to keep complying with the said Resolution or to enforce the order for forfeiture or reparations. At the time of writing, this situation has not yet materialized. Neither of the individuals already convicted by the icc, Thomas Lubanga Dyilo and Germain Katanga, were sentenced to a fine or forfeiture.55 Moreover, in the Katanga case the reparation proceedings are still underway; while in the Lubanga case the convicted was declared indigent and no property or assets were identified 54 55

Pursuant to Article 79, para. 2 of the Rome Statute, by Court’s order, money and other property collected through fines or forfeiture may be transferred to the Trust Fund. As for the Lubanga case, see: ICC-01/04-01/06-2901, Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision on Sentence pursuant to Article 76 of the Statute, 10 July 2012; ICC-01/04-01/06-3122, Appeals Chamber, The Prosecutor v. Thomas Lubanga Dyilo, Judgment on the Appeals of the Prosecutor and Mr. Thomas Lubanga Dyilo against the “Decision on Sentence pursuant to Article 76 of the Statute”, 1 December 2014. As to the Katanga case, see: ICC-01/04-01/07-3484, Chambre de première instance ii, Décision relative à la peine (article 76 du Statut), 23 mai 2014. Both Katanga and the Prosecutor discontinued their appeal against the judgment of conviction of Trial Chamber ii and decided not to appeal the sentence imposed by that Chamber.

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that could be used for the purpose of reparations,56 the Appeals Chamber ordered collective reparations to be made through the Trust Fund and it simply added that, if the state of indigence was confirmed, Lubanga’s financial situation should be monitored, so that the Trust Fund could claim the advanced resources from him at a later date.57 Nevertheless, the above mentioned situation may well become a reality in the near future, since an increasing number of judicial proceedings before the Court are expected to come to an end in the next few years. Should an icc forfeiture or reparation order refer to assets frozen pursuant to a Security Council Resolution, the State party where they are located, at least when it is a un member state, will be compelled to disregard the order and keep them frozen by virtue of Article 103 of the un Charter. As noted above, under this Article the obligations on un member States arising from the Charter prevail over other treaty obligations, when there is a conflict. The aforementioned State will be able to give effect to the Court’s order, without infringing the un Charter, only where the Council’s Resolution imposing the asset freeze provides an exemption for the case of enforcement of judicial orders for forfeiture or reparations. Surprisingly, none of the Security Council Resolutions establishing an asset freeze with respect to the situations currently under icc investigation contains an exemption clause that covers such case. One has to consider: Resolution 1572 (2004) concerning Côte d’Ivoire;58 Resolution 1591 (2005) relating to Darfur-Sudan; Resolution 1596 of 3 May 2005 on the Democratic Republic of the Congo;59 Resolution 1970 (2011) concerning Libya; and Resolution 2134 (2014) relating to the Central African Republic.60 All of them provide an exemption only for funds, other financial assets and economic resources which 56 57

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ICC-01/04-01/06-2904, Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision Establishing the Principles and Procedures to be Applied to Reparations, 7 August 2012, para. 269. ICC-01/04-01/06-3129, Appeals Chamber, The Prosecutor v. Thomas Lubanga Dyilo, Judgment on the Appeals against the “Decision Establishing the Principles and Procedures to Be Applied to Reparations” of 7 August 2012 with AMENDED Order for Reparations (Annex A) and Public Annexes 1 and 2, 3 March 2015, para. 116 and Annex A, paras. 53, 61. The asset freeze established by Resolution 1572 (2004) and the related exemptions were renewed by the following Resolutions: Resolution 1643 (2005), para 1; Resolution 1727 (2006), para. 1; Resolution 1782 (2007), para. 1; Resolution 1842 (2008), para. 1; Resolution 1893 (2009), para. 1; Resolution 1946 (2010), para. 1; Resolution 1975 (2011), para. 12; Resolution 1980 (2011), para. 1; Resolution 2045 (2012), para. 6; Resolution 2101 (2013), para. 6; Resolution 2153 (2014), para. 12; Resolution 2219 (2015), para. 12. See also Resolution 1807 (2008), paras. 11, 12. The asset freeze thereby established and the related exemptions were renewed until 1 July 2016 by Resolution 2198 (2015) (para. 3). The asset freeze imposed by Resolution 2134 (2014) and the related exemptions were renewed until 29 January 2016 by Resolution 2196 of 22 January 2015 (paras. 7, 8).

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are determined by the relevant member State, under the Sanctions Committee control, to be necessary for “basic expenses” or “extraordinary expenses” or to be “the subject of a judicial, administrative or arbitral lien or judgment”, provided inter alia that the lien or judgment was entered prior to the date of the Resolution.61 The very same provision is included in most of the other Security Council Resolutions imposing an asset freeze.62 Interestingly, in Resolution 1970 (2011), the Security Council, though referring the situation in Libya since 15 February 2011 to the icc Prosecutor, “expresses its intention to ensure that asset frozen…shall at a later stage be made available to and for the benefit of the people of the Libyan Arab Jamahiriya” (para. 18), without mentioning the possibility that such assets be made available also for reparations to the victims of crimes that would be ascertained by the Court.63 Since in the next few years many cases currently pending before the icc will be decided, it is of paramount importance that States parties are in the position of being able to enforce the Court’s sentences and reparation orders without infringing any Security Council Resolution. To this end, the current Council’s sanctions regimes relating to situations under the icc investigation need to be amended so as to include an exemption from the asset freeze for the enforcement of the Court’s sentences and reparation orders. It is also advisable that such exemption be provided for in all the Security Council Resolutions imposing an asset freeze, as the icc Prosecutor is supposed to open an investigation into new situations in the near future. 6

un Asset Freeze and icc Protective Measures for the Purpose of Forfeiture

It is worth noting that under Article 57, para. 3 (e) of the Rome Statute, following an arrest warrant or a summons to appear, the icc Pre-Trial Chamber may 61 62

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See: Resolution 1572 (2004), para 12; Resolution 1591 (2005), para. 3 (g); Resolution 1596 (2005), para. 16; Resolution 1970 (2011), para. 19; Resolution 2134 (2014), para. 33. See: Resolution 1718 of 14 October 2006 concerning the Democratic People’s Republic of Korea, para. 9; Resolution 1737 of 27 December 2006 regarding Iran, para. 12; Resolution 1844 of 20 November 2008 relating to Somalia, para. 4; Resolution 1907 of 23 December 2009 concerning Eritrea, para. 14; Resolution 2140 (2014) regarding Yemen, para. 12; Resolution 2206 (2015) relating to South Sudan, para. 13. See also Resolution 1973 of 17 March 2011: the Security Council “affirms its determination to ensure that asset frozen…shall, at a later stage, as soon as possible be made available to and for the benefit of the people of the Libyan Arab Jamahiriya” (para. 20).

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issue requests to States for assistance “to take protective measures for the purpose of forfeiture, in particular for the ultimate benefit of victims”. According to Article 93, para. 1 (k) of the Statute, such requests, to which States parties are obliged to comply, refer to “the identification, tracing and freezing or seizure of proceeds, property and assets and instrumentalities of crimes for the purpose of eventual forfeiture”. Actually, as made clear by Pre-Trial Chamber i in the Lubanga case, the aforementioned protective measures can be aimed at securing the enforcement of a future penalty of forfeiture as well as a future reparation order.64 Whenever the property and assets to be identified, traced and frozen or seized are owned by a person subject to an asset freeze pursuant to a Security Council Resolution, information provided confidentially by the relevant Sanctions Committee might be of help in determining the States to which requests for assistance should be addressed. To date, the icc Pre-Trial Chamber has issued several requests to both States parties and non-States parties for the taking of the aforementioned protective measures with respect to property and assets of persons who were already subject to Security Council sanctions. However, only a few of them have been declassified and made public on the Court’s web site.65 As regards Muammar Gaddafi, Saif Al-Islam Gaddafi and Abdallah Al-Senussi, in November 2011, the icc Prosecutor informed the Security Council that at the end of September of the same year the Court had sent “requests for assistance to Libya, State Parties, 64

ICC-01/04-01/06-8-US-Corr, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Decision concerning Pre-Trial Chamber i’s Decision of 10 February 2006 and the Incorporation of Documents into the Record of the Case against Mr Thomas Lubanga Dyilo, 24 February 2006, paras. 132–135. Pursuant to Article 75, para. 4, of the Statute, the TrialChamber too may issue the above mentioned requests, once the defendant is convicted, in order to give effect to a reparation order. However, such requests may come too late, since the defendant’s property and assets may have been put beyond the Court’s reach well before the conviction. According to Rule 99, para. 1, of the Rules of Procedure and Evidence, the Pre-Trial Chamber and the Trial Chamber may act proprio motu or at the request of the Prosecutor or of victims who have made a request for reparations or undertaken to do so. 65 See: ICC-01/04-01/06-22-tEN, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Request to the Democratic Republic of the Congo for the Purpose of Obtaining the Identification, Tracing, Freezing and Seizure of Property and Assets Belonging to Mr Thomas Lubanga Dyilo, 9 March 2006; ICC-01/04-01/06-62-tEN, Pre-Trial Chamber i, The Prosecutor v. Thomas Lubanga Dyilo, Request to States Parties to the Rome Statute for the Identification, Tracing and Freezing or Seizure of the Property and Assets of Mr Thomas Lubanga Dyilo, 31 March 2006; ICC-01/04-01/07-7-tENG, The Prosecutor v. Germain Katanga, Request to the Democratic Republic of the Congo for the Purpose of Obtaining the Identification, Tracing, Freezing and Seizure of the Property and Assets of Germain Katanga, 6 July 2007.

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and five un Security Council non-State Parties” (sic) to identify, trace and seize or freeze all their assets.66 Following the Pre-Trial Chamber’s request, in March 2012 Italy seized assets supposed to be owned by the Gaddafi family worth more than one billion euros.67 Assets seized included equity stakes of the Libyan Investment Authority (lia), a Libyan government agency, in Italianlisted companies UniCredit, Eni and Finmeccanica. lia, however, successfully challenged their seizure before the Court of Appeals of Rome, on the ground that the assets in question were no longer controlled by the Gaddafi family, but by the new Libyan Government on behalf of the Libyan people.68 Generally, however, the amount and location of property and assets frozen pursuant to a Security Council Resolution or in execution of an icc request are strictly confidential. Scant or no information can be found in the media. Where a Court’s request for assistance to take protective measures refers to property and assets already frozen in accordance with a Security Council Resolution, it is submitted that Article 93, para. 9 (b) of the Rome Statute shall apply.69 As per this article, the requested State shall inform the icc that the property and assets in question are already subject to a un freeze and the Court shall direct 66

icc-otp, Luis Moreno-Ocampo, Prosecutor of the International Criminal Court, Statement to the United Nations Security Council on the Situation in Libya, pursuant to unscr 1970 (2011), New York, 2 November 2011, available at http://www.icc-cpi.int/NR/rdonlyres/AC6273F2 -B27D-4BA5-B6A4-A23856FAC887/283927/StatementICCProsecutorLibyaReporttoUNSC021113 .pdf, accessed on 30 June 2015. It is to be noted that on 22 November 2011, Pre-Trial Chamber i terminated the case against Muammar Gaddafi, following his death. See: ICC-01/11-01/11-28, The Prosecutor v. Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Al-Senussi, Decision to Terminate the Case against Muammar Mohammed Abu Minyar Gaddafi, 22 November 2011. 67 See: Sequestrati beni di Gheddafi per oltre 1,1 miliardi di euro, 28 March 2012, available at http://www.repubblica.it/economia/2012/03/28/news/sequestro_gheddafi-32358828/; A Pantelleria sequestrati beni alla famiglia Gheddafi per 20 milioni di euro, 16 May 2012, available at http://www.ilsole24ore.com/art/notizie/2012-05-16/pantelleria-sequestrati -beni-famiglia-115817.shtml?uuid=AbklUOdF, accessed on 30 June 2015. 68 See: Shearman & Sterling Overturns € 1 Billion Seizure of lia Assets in Italy, 25 July 2012, available at http://www.shearman.com/en/newsinsights/news/2012/07/shearman-sterling -overturns-1-billion-seizure-o__, accessed on 30 June 2015. 69 ICC-ASP/11/28, Assembly of States Parties, Report of the Bureau on Cooperation, Annex ii, Summary of the 1 October 2012 Workshop on Cooperation, Including Proposals and Suggestions from the Participants, para. 11. Under Article 93, para. 9 (b), of the Statute, “where…the request from the Court concerns information, property or persons which are subject to the control of a third State or an international organization by virtue of an international agreement, the requested States shall so inform the Court and the Court shall direct its request to the third State or international organization”.

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its request to the Security Council. It is unknown whether this situation has already occurred. In any case, in order to handle it, a direct dialogue appears to be necessary between the icc and the relevant Sanctions Committee. In principle, one can see no reason why the Sanctions Committee should oppose the seizure, in execution of a Court’s request, of property and assets already frozen pursuant to a Security Council Resolution. A problem, however, may arise afterwards, should the icc impose a forfeiture and/or reparations on the owner of such property and assets, persisting the un freeze. As illustrated above, in this case, absent an exemption from the un freeze for the enforcement of judicial orders for forfeiture or reparations, un member States shall be bound to keep the property and assets in question frozen and ignore the Court’s order by virtue of Article 103 of the un Charter.70 For States parties to the Rome Statute, however, that behavior will constitute a violation of Article 109, para. 1 and Article 75, para. 5 of the Statute. 7 Conclusion As shown above, the Security Council sanctions mechanism and the icc mechanism intersect in many ways. A harmonious relationship between them would be of mutual benefit and advance the achievement of their respective goals. To this end several steps are necessary. To begin with, cooperation should be deepened between the Security Council and its Sanctions Committees, on the one hand, and the Court and its organs, on the other, in situations in which they are both involved. Regular exchange of information and documents on a confidential basis should be arranged for. As noted above, it would help the Sanctions Committees to identify individuals to include in the sanctions list and the Office of the Prosecutor to collect evidence against persons under investigation.71 Moreover, it would facilitate the Sanctions Committees’ work of localizing the property and assets to freeze pursuant to a Security Council Resolution and the Pre-Trial Chamber’s task of identifying the States which should be requested to take protective measures under Article 57, para. 3 (e) of the Rome Statute.72 Furthermore, the Security Council’s targeted sanctions regimes should be designed or adjusted so as to back the icc action as much as possible. Individuals to be sanctioned should include those responsible for violations of 70 See supra para. 5. 71 See supra para. 2. 72 See supra para. 6.

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international humanitarian law or human rights law. Once an arrest warrant is issued by the Pre-Trial Chamber, the individual subject to it should be placed on the sanctions list without delay.73 In addition, an exemption from the travel ban should be provided for the transfer to and from The Hague of persons involved in proceedings before the icc.74 Similarly, an exemption from the asset freeze should be established for the enforcement of the Court’s orders for forfeiture or reparations.75 Finally, the interaction between the Security Council sanctions mechanism and the icc mechanism could greatly benefit from the presence of a subsidiary organ of the Security Council mandated to routinely address the various questions relating to the Council’s relationship with the Court. As called for by several States, this mandate could be assigned to a newly established body or to the existing Informal Working Group on International Tribunals, which up until now has examined only matters concerning the International Tribunals for the Former Yugoslavia and Rwanda and the Special Court for Sierra Leone.76 Obviously, one cannot forget that the icc was created neither by a Security Council Resolution, like the International Tribunals for the Former Yugoslavia and Rwanda, nor by an agreement between the un and a member State, like the Special Court for Sierra Leone. It cannot be ignored that three permanent members of the Council are not currently parties to the Rome Statute (China, Russian Federation and the United States). However, support for the Court’s action is crucial if the Security Council really intends to translate its frequent statements on accountability for international crimes into tangible efforts to end impunity. Indeed, it is imperative in situations which have been referred to the icc Prosecutor by the Security Council. It is expected that the latter will follow up its referrals with appropriate measures. The failure to do so, as in the case of the Darfur-Sudan situation, seriously undermines the Council’s own credibility. 73 See supra para. 3. 74 See supra para. 4. 75 See supra para. 5. 76 See u.n. Doc. S/2012/860, Letter dated 20 November 2012 from the Permanent Representatives of Costa Rica, Jordan and Liechtenstein to the United Nations addressed to the President of the Security Council. See also the remarks of: France, in u.n. Doc. S/PV.6849, Security Council, 6849th Meeting, cit., 23; Lithuania, in u.n. Doc. S/PV.7285, Security Council, 7285th Meeting, 23 October 2014, p. 17; Romania, in u.n. Doc. S/PV.7285 (Resumption 1), Security Council, 7285th Meeting, cit., p. 3; Guatemala, ibid., p. 5; Hungary, ibid., p. 37; Netherlands, ibid., p. 9. See the position of the icc Prosecutor Fatou Bensouda on the issue, in u.n. Doc. S/PV.7285, Security Council, 7285th Meeting, cit., p. 5  f. As to the Informal Working Group on International Tribunals, see Sievers, Daws, The Procedure of the un Security Council (4th ed., Oxford: Oxford University Press, 2014), p. 518 f.

chapter 12

From Effective to Useful Sanctions: Lessons Learned from the Experience of the European Union Francesco Giumelli Abstract The eu has resorted to sanctions in most crises of the past two decades: from the former Yugoslavia conflicts to the more recent cases of Iran, Syria and Russia. Sanctions have been increasingly used, but it not clear whether their adoption brings about desirable policy outcomes. Why does the eu impose sanctions if they do not work? The chapter argues that the effectiveness of sanctions should be understood in terms of usefulness. Effectiveness is measured against the achievement of policy objectives, usually the behavioural change of targets, but sanctions are instruments of foreign policy and they can be useful rather than effective. The study of the eu experience has led to nine lessons on ways in which sanctions can be useful and, thus, effectiveness could be understood. This chapter enriches the discussion on why sanctions are imposed even if they do not change the behaviour of targets.

Keywords European Union – sanctions – effectiveness – foreign policy – international crises

1 Introduction The sanctions imposed by the Council of Ministers in the aftermath of the MH17 accident in July 2014 on Russian entities and citizens were seen as a strong diplomatic measure, but also as a natural step after the escalation of the crisis in eastern Ukraine. This came after years of discussions on Iran and Syria, several rounds of sanctions imposed to deal with the consequences of the protests in the mena region (also known as the Arab Spring and Arab awakening, among others) and the two-decade-long arms embargo imposed on China after the events of Tiananmen Square. Sanctions are clearly at the centre of eu foreign policy, but it is less clear whether their adoption brings about desirable

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_013

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policy outcomes.1 Certainly, scholars doubt that sanctions are effective foreign policy instruments, or that they work, but this view does not explain the intense activity of the European Union in imposing restrictive measures. This chapter is about the effectiveness of sanctions and it focuses on the experience of the eu. Why does the eu impose sanctions if they do not work? The argument of the chapter is that the effectiveness of sanctions should be understood in terms of usefulness. Indeed, effectiveness is measured against the achievement of policy objectives, usually the behavioural change of targets, but sanctions are instruments of foreign policy and, as such, they can be useful rather than effective. The study of the eu experience did lead to lessons learnt about ways in which sanctions can be useful and, thus, effectiveness can be understood. For instance, sanctions do not only aim at changing the behaviour of targets, but sanctions are useful because they can constrain the capabilities of targets and send signals in international politics. Moreover, sanctions can be relevant to ongoing negotiations, they allow the eu to play a role in international politics, and they can complement other foreign policy instruments, among other things. In total, nine lessons have been identified from the eu experience that enrich the discussion on why sanctions are imposed even if they do not change the behaviour of targets. This chapter focuses only on when and how sanctions can be useful. These lessons are drawn by adopting a four-step procedure to analyse sanctions cases. This chapter elaborates on the findings from the book The Success of Sanctions, which analysed all eu sanctions in general, and six cases in depth.2 The chapter is divided into four sections. The first section introduces the effectiveness debate and presents the four-step methodology showing how this moves beyond the ongoing debate on how to measure the effectiveness of sanctions. The second part illustrates the eu record in resorting to sanctions since the end of the Cold War. The third part summarizes the nine lessons that the study on eu sanctions has produced. Finally, the conclusion of the chapter summarizes the main argument of the chapter and suggests how to further the knowledge on the subject.

1 M. Eriksson, Targeting Peace: Understanding un and eu Targeted Sanctions (Farnham: Ashgate, 2011); A. Vines, ‘The effectiveness of un and eu sanctions: lessons for the twentyfirst century’, 88:4 International Affairs (2012), pp. 867–877. 2 F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience (Farnham: Ashgate, 2013). The six cases are the eu sanctions on the us, Belarus, Transnistria, Zimbabwe, Uzbekistan and China.

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The Success of Sanctions

The effectiveness of sanctions has been greatly debated in the past decades. From a nearly general consensus in the 1970s and 1980s that sanctions do not work,3 there exist today more nuanced views on how sanctions work and what they can achieve. Starting with the publication of Economic sanctions reconsidered in 1990,4 numerous studies have been published challenging the negative perception of sanctions as a foreign policy instrument. This section reviews the literature on effectiveness and highlights the need for different approaches to the problem. It was widely acknowledged that sanctions were not a successful foreign policy instrument. Studying the effects of sanctions on Southern Rhodesia, Galtung claimed that sanctions are not of much use because they trigger the rally-around-the-flag effect consolidating the support for the leadership in the targeted country and increasing its tolerance to bear the economic costs of the crisis. Galtung argued that the logic according to which sanctions ought to work, namely that the economic impact would lead to political concessions from targets, is naïve.5 It was evident that we could not ‘ask the pistol to inflict damage of which only the cannon is capable’,6 and that sanctions were not determinant in changing the behaviour of States.7 In 1985, David Baldwin wrote that there are few subjects in political science that achieve greater consensus than the claim that sanctions do not work.8 This wide consensus was the product of generalizing from case studies and from theoretical reasoning, so when the Institute for International Economics in Washington published the results of an empirical research on 114 cases claiming that sanctions worked 34% of the time, the debate entered into a new phase.9 The publication of the database invited further re-evaluations, so International 3 D.A. Baldwin, Economic Statecraft (Princeton, n.j.: Princeton University Press, 1985). 4 G.C. Hufbauer, J.J. Schott and K.A. Elliott, Economic Sanctions Reconsidered (Washington, d.c.: Institute for International Economics, 1990). 5 J. Galtung, ‘On the Effects of International Economic Sanctions: With Examples from the Case of Rhodesia’, 19:3 World Politics, 1967, pp. 378–416. 6 M.S. Daoudi and M.S. Dajani (eds.), Economic Sanctions: Ideas and Experience (London: Routledge and Kegan Paul, 1983), p. 168. 7 M.P. Doxey, International Sanctions in Contemporary Perspective (Basingstoke: Macmillan, 1987). 8 D.A. Baldwin, Economic Statecraft, cit. 9 G.C. Hufbauer, J.J. Schott and K.A. Elliott, Economic Sanctions Reconsidered, cit.; confirmed later in third edition, see G.C. Hufbauer, J.J. Schott, K.A. Elliott and B. Oegg, Economic sanctions reconsidered (3rd ed., Washington, d.c.: Peterson Institute for International Economics, 2007).

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Security hosted a public discussion between Robert Pape, whose analysis suggested that sanctions worked only 5% of the time,10 and Kimberly Elliott, who considered that the sanctions’ glass should be seen as half full and not only half empty.11 From the discussion, it emerged that the point of divergence was constituted by the assessment criteria. On the one hand, Pape held that sanctions by themselves did not achieve much in foreign policy, while Elliot claimed the centrality of sanctions in the process. Yet, this debate replicated the previous one where sanctions effectiveness was evaluated by looking at the extent to which targets had modified their behaviour because of sanctions. Questioning the causal link between sanctions and targets’ behaviour opened new venues for research on effectiveness. Empirical research done by Cortright and Lopez investigated the matter from a more policy perspective and introduced new elements to be considered, such as the fact that sanctions not only aim at changing the behaviour of targets, but they also bear a symbolic value that cannot be disregarded.12 Some thought that sanctions’ effectiveness should be measured according to certain political objectives,13 others pointed out the importance of the signalling element of sanctions,14 and others indicated that the comparative utility of sanctions, namely what would have been a better course of action in the place of sanctions, should be an important component of the assessment.15 Indeed, assessing the effectiveness of sanctions has been a daunting task. However, since the use of sanctions has increased in recent decades despite the scepticism showed in the literature, it is assumed that the discussion is 10

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R.A. Pape, ‘Why Economic Sanctions Do Not Work’, 22:2 International Security (1997), pp. 90–136, and R.A. Pape, ‘Why Economic Sanctions Still Do Not Work’, 23:1 International Security (1998), pp. 66–77. K.A. Elliott, ‘The Sanctions Glass: Half Full or Completely Empty?’, 23:1 International Security (1998), pp. 50–65. D. Cortright and G.A. Lopez, The Sanctions Decade: Assessing un Strategies in the 1990s (Boulder, c.o.: Lynne Rienner Publishers, 2000). K.R. Nossal, ‘International Sanctions as International Punishment’, 43:2 International Organization (1979), pp. 301–322; J. Linsday, ‘Trade Sanctions as Policy Instruments: A Re-Examination’, 30:2 International Studies Quarterly (1986), pp. 153–173. C.T. Morgan and V.L. Schwebach, ‘Economic Sanctions as an Instrument of Foreign Policy: The Role of Domestic Politics’, 21:3 International Interactions (1995), pp. 247–263; J. Fearon, ‘Signaling Foreign Policy Interests: Tying Hands versus Sinking Costs’, 41:1 The Journal of Conflict Resolution (1997), pp. 68–90; and V.L. Schwebach, ‘Sanctions as Signals: A Line in the Sand or a Lack of Resolve?’ in S. Chan and C.A. Drury, Sanctions as Economic Statecraft: Theory and Practice (Basingstoke: McMillan Press, 2000). D.A. Baldwin, ‘The Sanctions Debate and the Logic of Choice’, 24:3 International Security (1999/2000), pp. 80–107.

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nowhere close to over. There are at least three types of attitude towards the effectiveness of sanctions. First, there are those who think that sanctions work occasionally. Second, there are the hard-liners claiming that sanctions rarely work. And third, there are those that claim that the real effectiveness of sanctions should be evaluated only by looking at the specific objective that sanctions aim to achieve. Whereas the first two groups appear to be trapped and self-limited by the success criterion identified mainly with behavioural change, which has been unable to explain many of the sanctions in the past,16 the third group falls short in providing a set of analytical tools that would allow for comparisons and knowledge accumulation. Furthermore, targeted sanctions present peculiarities that are not fully accounted for by the literature on sanctions. Cortright and Lopez have provided an interesting starting point, both empirical and theoretical, but have not yet completed the task.17 Portela and Eriksson have dealt directly with the problem of effectiveness of eu sanctions, but their approaches did not depart from substantially from what had been done in the past.18 Biersteker, Eckert and Tourinho have adopted an innovative and more advanced methodology to the experience of the United Nations (un), but the exercise assumes that effectiveness can be measured.19 In fact, the argument in this chapter is that the ‘facts’ of sanctions can be made sense of only if they are interpreted within their context. Their attempt is to identify and quantify the effectiveness of sanctions, while each case is filled with multiple variables that undermine any attempt to look at sanctions as having ‘worked’ or not. This chapter undertakes a different approach that aims at pinpointing important principles behind the assessment of sanctions. 3

How to Think about Success: A Four-Step Process and the Utility of Sanctions

Sanctions do not ‘work’ or ‘not work’. The effectiveness of sanctions has caused heated discussions due to the highly controversial nature of politics, especially 16 17 18

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F. Giumelli, Coercing, Constraining and Signalling: Explaining un and eu sanctions After the Cold War (Colchester: ecpr Press, 2011). D. Cortright and G.A. Lopez (eds.), Smart Sanctions: Targeting Economic Statecraft (Lanham, m.d.: Rowman & Littlefield Publishers, 2002). M. Eriksson, Targeting Peace: Understanding un and eu Targeted Sanctions (Farnham: Ashgate, 2011); C. Portela, European Union Sanctions and Foreign Policy: When and Why Do They Work? (Milton Park: Routledge, 2010). T.J. Biersteker, S.E. Eckert and M. Tourinho (eds.), Understanding United Nations Targeted Sanctions (Cambridge: Cambridge University Press, forthcoming 2015).

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in times of crisis, when the value of achievements is determined by political, and therefore subjective, considerations. The controversial nature of sanctions is the core problem of their evaluation, therefore attempts to allocate sanctions episodes in the category of ‘success’ or ‘failure’ is methodologically justified, but ontologically weak. Instead, sanctions are instruments and, as such, they can be useful, useless or counterproductive.20 However, the decision on whether sanctions are useful, useless or counterproductive is based on normative considerations rather than scholarly ones. The initial problem should be to agree on a common procedure to base the discussion and to assess whether sanctions have been useful. I have designed a four-step procedure to analytically approach sanctions in order to include variables that go beyond the behaviour of targets, but instead include variables linked to the context and to the sender. The four-step procedure does not lead to an overall assessment, but it aims at disaggregating the different components of sanctions in order to highlight when and how sanctions have played a role in a crisis and, therefore, whether and how they were useful, useless or counterproductive.21 Starting with the behavioural change criterion in mind, this article focuses mainly on how sanctions were useful and the procedure helps to identify ways in which sanctions achieved this. The first step of the analysis is to place sanctions within the larger foreign policy strategy context. Sanctions are very rarely imposed in isolation from other foreign policy instruments, and a proper understanding of what else the sender is doing can provide essential insights to understand what the role of sanctions is. Foreign policy can be conducted through different methods aiming to influence other actors and achieve policy goals. The list of tools available is short. States can use diplomatic means, offer incentives, impose sanctions and use force to determine the outcome of political processes in a favourable way. A foreign policy strategy is a plan that involves all foreign policy instruments employed to achieve policy goals. Therefore, the achievement of foreign policy goals should be attributed to the combination of foreign policy instruments rather than being attributed to each of them individually. 20

21

L.J. Brady, ‘The Utility of Economic Sanctions as a Policy Instrument’ in D. Leyton-Brown (ed.), The Utility of International Economic Sanctions (New York, n.y.: St. Martin’s Press, 1987); D. Leyton-Brown (ed.), The Utility of International Economic Sanctions (New York, n.y.: St. Martin’s Press, 1987); D.A. Baldwin and R.A. Pape, ‘Evaluating Economic Sanctions’, 23:2 International Security (1998), pp. 189–198. F. Giumelli and P. Ivan, ‘The Effectiveness of eu Sanctions – An Analysis of Iran, Belarus, Syria and Myanmar (Burma)’, epc Issue Paper 76 (2013); F. Giumelli, ‘How eu Sanctions Work: A New Narrative’, euiss Chaillot Paper 129 (2013).

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The second step is to define the logic of sanctions. The term logic is borrowed from Galtung’s work and refers to the way in which sanctions are expected to influence their targets. Indeed, the logic of sanctions can be to inflict an economic damage to force a behavioural change to targets. However, sanctions can also have other motivations. For instance, sanctions can be aimed at terrorist organizations from which we do not demand new political behaviour, but the interruption of their political activity. This request equals total defeat, which can be hardly qualified as a request to change their behaviour, but rather as a request to stop their behaviour. This logic will be defined as a constraining one. Finally, sanctions can also serve as signalling device in foreign policy. This can occur for a number of reasons – for instance to underline the importance of a norm, to strengthen the seriousness of other policy measures, to compensate for lack of better alternatives, etc. – that should be included in the assessment of what sanctions have achieved. The three logics respond to the labels of coercive, constraining and signalling sanctions.22 These three logics are often, but not necessarily, present in the same sanctions regime. They identify different ways in which sanctions influence their targets and, consequently, the effects that they can produce should be accounted in every case of sanctions. The third step of the analysis is to identify the effects of sanctions. This is an ex-post evaluation aiming to assess the contribution of sanctions to a sender’s strategy. The objective is to determine what sanctions have achieved considering their role in the overall strategy. This is done against two factors: the impact of sanctions on the target’s economy and the cost borne by the senders. Sanctions can affect targets directly/indirectly and intentionally/unintentionally. The direct impact is the one caused by the sanctions, such as the drop in oil sales due to an oil embargo. Indirect impact refers to what happens to nontargeted sectors, such as the loss of commerce for transport companies when agricultural products are banned. Intended consequences refers to what senders expect or (can easily) predict is to be imposed on targets, such as the reduction of foreign direct investment (fdi) after the imposition of financial sanctions. Instead, unintended consequences refer to effects that are caused by sanctions without the senders’ intention, such as serious humanitarian consequences.

22

F. Giumelli, Coercing, Constraining and Signalling: Explaining un and eu sanctions after the Cold War, cit. This typology was also adopted by the Targeted Sanctions Consortium on the study of un sanctions, see T.J. Biersteker, S.E. Eckert and M. Tourinho (eds.), supra note 19.

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Finally, the last step of this procedure is to evaluate whether the effects, intended and unintended, produced by sanctions are worth the costs borne by the senders and any alternatives to sanctions. Indeed, no purchase can be evaluated without considering its price and whether it could have been bought for the same money. Similarly, sanctions can have effects, but they come at a price for senders and, therefore, the comparative utility of sanctions needs to be evaluated as well.23 This counterfactual exercise is important as it makes it possible to judge whether sanctions were the best option available to senders.24 The assessment of any foreign policy action is conducted after an evaluation of the options available to policy-makers, and this procedure should also be applied to the study of sanctions. Despite the methodological weaknesses that accompany it, this counterfactual exercise is instrumental in clarifying the quality of the contribution of sanctions to foreign policy strategies. In other words, did sanctions bring about effects that could not have been produced by other foreign policy tools and at a lesser cost? Discussing the success of sanctions is far from being an exact science; it is rather a logical process of analysis and a discursive elaboration. The four-step procedure presented above provides the analytical tools to draw lessons from the performance of sanctions in foreign policy. Rather than looking for definite assessments, which have forced the debate to accept rigid criteria for success, the procedure leads to the discovery of how sanctions can be useful in foreign policy contexts. The next section introduces the experience of the eu to which the procedure has been applied and lessons have been drawn. 4 The eu Restrictive Measures: What, Where and Why? The eu has imposed restrictive measures on several occasions and in different contexts since the end of the Cold War. The Maastricht Treaty extended the power of the eu to also include foreign policy matters, and sanctions were one of the foreign policy instruments that fell under the authority of the Council of the European Union. Since the Treaty of Lisbon, as discussed elsewhere in this edited volume, the Council can impose restrictive measures under Article 29 of the Treaty on the European Union as a Common Foreign and Security Policy (cfsp) decision. Given the fact that sanctions are often infringing upon issues related to the creation of a Common Market, which is under the exclusive competence of European institutions, Article 215 of the Treaty on the Functioning of the European 23 24

D.A. Baldwin, ‘The Sanctions Debate and the Logic of Choice’, supra note 15, pp. 80–107. This has been done in us foreign policy, see M.L. O’Sullivan, Shrewd Sanctions: Statecraft and State Sponsors of Terrorism (Washington, d.c.: Brookings Institution Press, 2003).

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Union grants the power to the Council to pass the necessary acts to implement sanctions against natural or legal persons and groups or non-State entities.25 In July 2015, the eu was administering 16 sanctions regimes imposed significantly beyond the mandate of the United Nations.26 The eu used sanctions predominantly in Africa and Asia, but also on the usa and on targets in the Middle-East. Sanctions have been divided into four categories: (1) assets freezes, (2) commodity and service boycotts, (3) travel bans and (4) arms embargoes.27 Arms embargoes encompass decisions to ban the sale of weapons to a certain country, region, group or individual that may use them to carry out actions against peace processes, to undermine the stability of regimes or to violate human rights. These decisions may be directed at dual-use goods and the provision of services such as training or technical support to targets. Whereas the implementation of such measures is delegated to national authorities, eu member States have agreed on a list of dual-use technologies that would have to be treated with scrutiny when sanctions are imposed. Travel bans refer to prohibitions imposed on certain individuals preventing them from leaving or entering the territory of the eu and, whenever applicable, the States that associate themselves with the decision of the Council. This causes inconvenience or prevents banned individuals from carrying out certain actions. A simple example pertains to the new worldwide threat of terrorism, since it is obviously easier for members of terrorist groups to organize attacks if they are allowed to travel in the targeted areas. Travel bans have been criticized for violating the human rights of blacklisted individuals if they have to travel for medical reasons or for undermining peace processes in cases where government leaders are not allowed to participate in international meetings for such purposes. Therefore, exemptions and exceptions are usually considered when the official decisions are made.28 25 26

27

28

C. Beaucillon, ‘Comment choisir ses mesures restrictives? Guide pratique des sanctions de l’UE’, euiss Occasional Paper 100 (2013). Sanctions are imposed on targets in Burma, Bosnia and Herzegovina, China, Egypt, Republic of Guinea, Iran, Libya, Moldova, Russia, Serbia and Montenegro, Syria, Tunisia, Ukraine, the usa, Zimbabwe and its own terrorist list. D. Cortright, G.A. Lopez, and L. Gerber (eds.), Sanctions and the Search for Security: Challenges to un Action (Boulder, c.o.: Lynne Rienner Publishers, 2002); and P. Wallensteen and C. Staibano (eds.), International Sanctions: Between Words and Wars in the Global System (Abingdon: Frank Cass, 2005). E. Cosgrove, ‘Examining Targeted Sanctions: Are Travel Bans Effective?’ in P. Wallensteen and C. Staibano (eds.), International Sanctions: Between Words and Wars in the Global System, cit.; and D. Cortright, G.A. Lopez and L. Gerber (eds.), Sanctions and the Search for Security, cit.

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Financial restrictions can take several forms, such as freezing of bank accounts, prohibition of financial transactions and denying loans to central banks of targeted countries. A ban on new investments in specific areas would also fall under this category, since it would prohibit the granting of loans or the opening of credit lines that could support, either directly or indirectly, the implementation of a target’s plans. There is a lengthy list of measures that fall under this category, and they are imposed with the dual objective of undermining the capabilities of targets while creating personal inconvenience that may affect the decision-making process in their countries.29 Commodity and service boycotts resemble financial restrictions in their expected impact. Commodity boycotts ban the trade in specific products, such as timber, oil, copper and diamonds. Very specific bans have been also imposed on luxury goods, sensitive technologies, minted coins and gold. Services boycotts can cover any assistance to build State or national capacities supporting the achievement of political objectives that have been deemed undesirable by the sender, such as the insurance services provided to oil tankers, training courses in sensitive areas, and the operating of commercial and private flights.30 The eu has resorted to sanctions in a wide range of crises. Taking inspiration from Andrea Charron’s work on un sanctions,31 there are five recurrent scenarios where eu sanctions are used: (1) to manage conflicts, (2) to promote democracy and protect human rights, (3) to assist the consolidation of democratic transitions, (4) to counter the proliferation of dangerous weapons, and (5) to fight international terrorism. The most common crisis type is promotion of democracy, followed by post-conflict consolidation, conflict managementlike crises, non-proliferation and countering terrorism. Managing conflicts refers to situations in which the eu intervenes in civil conflicts or crises where an outbreak of aggression between third parties has already taken place. Episodes under the category promotion of democracy are instances in which 29

D. Cortright, G.A. Lopez and L. Gerber (eds.), Sanctions and the Search for Security, cit.; T.J. Biersteker and S.E. Eckert, Countering the Financing of Terrorism (London: Routledge, 2007); D. Cortright, G.A. Lopez and E.S. Rogers, ‘Targeted Financial Sanctions: Smart Sanctions That Do Work’ in D. Cortright, G.A. Lopez and L. Gerber (eds.), Sanctions and the Search for Security: Challenges to un Action, cit.; R.R. Newcomb, ‘Targeted Financial Sanctions: The us Model’ in D. Cortright and G.A. Lopez (eds.), Smart Sanctions: Targeting Economic Statecraft, supra note 17. 30 D. Cortright and G.A. Lopez (eds.), Smart Sanctions: Targeting Economic Statecraft, supra note 17. 31 A. Charron, un Sanctions and Conflict: Responding to Peace and Security Threats (Abingdon: Routledge, 2011), pp. 7–11.

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the Council has taken action to react to human rights violations and to the deterioration of democratic standards within the targeted community. 5

Lessons Learned from the Case Studies

This intense activity of the eu cannot be explained only by looking at whether targets have changed their behaviour. This is because the focus is on determining whether sanctions are ‘effective’, which leads to sharp conclusions about their utility: if sanctions are effective, then they should be used, but if they are not, then the decision to impose sanctions appears irrational. This logic does not apply in the real world, where it would be better to see whether and how sanctions are useful to foreign policy makers. In this perspective, I have applied the four-step procedure to the experience of the eu in order to explain why sanctions have been applied with such frequency despite the fact that the academic literature has a negative view of them. The application of the four-step procedure has led to the identification of nine lessons on how sanctions can be useful that are presented here below.32 5.1 Lesson Number One: Sanctions Can Coerce, Constrain and Signal The distinction between coercive, constraining and signalling provides analytical advantages compared to the behavioural change approach, according to which sanctions are assessed on whether targets have changed their behaviour as a consequence of sanctions. For instance, Iran should have given up its nuclear ambitions, Iraq should have withdrawn from Kuwait and the genocide in Rwanda should have ended for sanctions to be deemed to have worked. However, this is a simplistic view of how sanctions function. The analysis of the eu experience shows that changing the policy of targets is only one of the concerns of policy-makers, who are equally interested in constraining the capabilities of targets and sending signals to various political actors. These are important and relevant purposes that motivate the imposition of sanctions and that should be assessed independently when sanctions are imposed. The coercing dimension was evident, for instance, in the first phase of the Syrian sanctions in 2011. Following the initial demonstrations from the opposition to the government, the response from the government was criticized by the eu and restrictive measures were imposed on a number of individuals. However, President Assad was not sanctioned as eu members intended to keep the diplomatic channel open with the highest authority in the country. 32

F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience, cit.

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The objective was to change Assad’s behaviour.33 The same strategy was adopted with sanctions on Russia as neither President Putin nor foreign minister Lavrov were prevented from travelling to the eu or hit by sanctions directly. In such cases, the aim of the eu is to alter the behaviour of its targets, but there are other ways in which sanctions can be useful. The constraining element is dominant when it comes to counter-terrorist measures. This is the case for the terrorist listing that the eu has adopted with Common Position 402 in 2002.34 This decision was adopted in the aftermath of the 09/11 attacks and it constitutes one component of the wider strategy on countering terrorism. The eu list has been amended over two hundred times and it contains 10 individuals and 23 entities at the moment of writing.35 The list of foreign terrorist organizations imposes an embargo on arms, a travel ban and a freezing of assets, but it sets out requests that terrorist groups cannot fulfil without terminating their activities. The terrorist list adopted by the eu indicates a number of entities and individuals that are placed under sanctions for their intentions to carry out terrorist acts. There are no specific demands that targets can comply with that would trigger the lifting of sanctions, but sanctions are imposed to make the lives of terrorist organizations more difficult. In such a case, the sanctioning regime should be assessed by looking at the terrorist attacks that are carried out, but by also thinking about the ones that could have occurred had sanctions not be in place. This is a clear example, but the constraining purpose is often in place. When it comes to sanctions on Belarus, the government is certainly limited in its actions due to sanctions, and it has fewer resources that need to be spent wisely if the support of the population is there to stay.36 Once again, sanctions create constraints that limit the range of actions of their targets. Finally, international politics also works somewhat like a theatrical stage, where acting becomes very important to the success of the play. There are situations in which the decision to speak in favour or against an event gains attention and political importance. For instance, Obama’s decision to publicly praise the Dalai Lama early this year sparked a strong reaction from the government of China, and this was simply a statement.37 Symbolic moves in foreign policy 33 34 35 36 37

F. Giumelli and P. Ivan, ‘The Effectiveness of eu Sanctions – An Analysis of Iran, Belarus, Syria and Myanmar (Burma)’, cit. O. Bures, ‘Ten Years of eu’s Fight against Terrorist Financing: A Critical Assessment’, 30:2–3 Intelligence and National Security (2014), pp. 207–233. July 2015. F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience, cit. D. Roberts, ‘Obama Hails Dalai Lama as “Good Friend” during us Prayer Breakfast’, The Guardian, 5 February 2015, available at http://www.theguardian.com/us-news/2015/ feb/05/dalai-lama-obama-avoid-direct-meeting-prayer-breakfast.

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can have several explanations. Acting can be both a reflective and public function. The reflective purpose addresses concerns that originate from domestic politics of senders, while the public function serves the communicative aspect of politics. On the one hand, sanctions are imposed because the sender needs to please domestic constituencies. Certainly, the need to construct a common identity was important to justify the arms embargo that the eu imposed on China in 198938 and sanctions imposed on Myanmar in 2007 following the repression “by Burmese authorities against peaceful protestors and the continuing serious violations of human rights in Burma/Myanmar”.39 For the eu, the very decision to act jointly is an important justification for sanctions. On the other hand, the decision to impose sanctions is a powerful one in international politics, therefore the decisions to sanction Russia for the Crimea annexation and Iran for its nuclear program bore important signals about the seriousness of the intention of the eu leadership to deal with serious challenges. This was also seen by third parties, the ‘audience’ of international affairs, so that the expectations of the eu’s decisions for the future will certainly be shaped by the decision to impose sanctions in the past.40 Lesson Number Two: Sanctions Can be Very Specific, Articulated and Targeted The way of looking at sanctions is often filtered through the economic impact that they have on the entire country where targets are located. This is also done instrumentally by targeted politicians, who try to trigger the rally-around-theflag effect by blaming sanctions for their economic mismanagement. However, targeted sanctions can be an essential component of complex foreign policy strategies where they can play a variety of roles. Under such conditions, the usefulness of sanctions is again not determined by their capacity to change the behaviour of targets, but, instead, by their capacity to break a negotiating deadlock, by advancing a negotiation or by contributing to building confidence among the parties. The case of the usa is certainly one of the most subtle and elaborated use of targeted sanctions. With the Helms-Burton act, the us decided to impose

5.2

38 39 40

U.M.-B. Stumbaum, The European Union and China: Decision-Making in eu Foreign and Security Policy towards the People’s Republic of China (Berlin: Nomos, 2009). Council of the European Union, ‘Council Common Position 2007/750/CFSP of 19 November 2007’, 19 November 2007. F. Giumelli, ‘Bringing Effectiveness Back in. A Comment on the Restrictive Measures Policy of the European Union’, 4:1 Central European Journal for International and Security Studies (2010), pp. 81–100.

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extra-territorial sanctions on private individuals who intended to do business with certain actors in Cuba. In response, the eu approved a series of measures to neutralize the potential effects of the Helms-Burton Act on European operators. In this scenario, restrictive measures would have caused an economic cost to us actors only if eu operators were damaged. In combination with legal instruments adopted under the first pillar of the European Community, sanctions were extremely specific, targeted and articulated and they did contribute to neutralizing legal actions from us based operators.41 The case of Transnistria is another articulated and very specific sanction. The objective of the eu is to deny the independence and the recognition of the rebellious region of Transnistria, in the eastern part of Republic of Moldova. Sanctions were imposed in the form of a travel ban on 12 individuals for undermining the territorial integrity of Republic of Moldova and on 10 individuals accused of preventing the functioning of Latin-script schools in Transnistria, but sanctions soon became an essential element of the diplomatic process. First, targets often requested sanctions to be lifted, which indicated that sanctions were relevant. Second, the eu did use sanctions to alter the domestic balance of power by de-listing a number of individuals who were opposing the rule of president Smirnov. By doing so, the domestic balance of power was tilted in favour of a different ruling elite, and the eu suspended the sanctions and a new dialogue started with the local authorities. The stalemate was broken also thanks to the imposition, and the lifting, of very specific sanctions on a few individuals with no wide economic impact.42 Lesson Number Three: Different Sanctions Should Correspond to Different Expectations Another common misunderstanding is to assume that all sanctions are the same and, therefore, the expectations are always similar despite the fact that sanctions can take very different forms. The expectation of the consequences that sanctions should have is to be built on the type of measure adopted. For instance, a travel ban on a few low ranking officials should create different expectations than an oil embargo, or an arms embargo on a warring party should create different expectations than a ban on specific financial services. Different sanctions should lead to different expectations in each specific crisis without prejudice on the overall evaluation of sanctions as a foreign policy tool.

5.3

41 42

F. Giumelli and K. Krulis, ‘The eu on the us: A Legal Use of Sanctions’ in F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience, cit. F. Giumelli, ‘Understanding the Effectiveness of Targeted Sanctions: The Case of the eu in Moldova’, 16:3 European Foreign Affairs Review (2011), pp. 359–378.

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Targeted sanctions, as shown in the examples of Iran and Transnistria, could take very different forms. The sanctions on Transnistria are currently suspended, but there is no longer anyone on the list in any case. Conversely, eu sanctions on Iran have been quite pervasive, including an oil embargo, a ban on financial services and the controversial sanctions to disconnect Iranian banks from swift among others, therefore the expectations should be formed differently.43 These two different regimes and their effectiveness should be measured against the expectations that their imposition carries. Sanctions on Iran are to play a central role in the eu-Iran relations and the material impact that they have cannot be overlooked, while the sanctions on Transnistria should not be accompanied by great expectations, but they are also relatively cost-free to eu members, so whatever added value, albeit small, is to be considered a positive achievement. The arms embargo on Uzbekistan, which is a net exporter of weapons, should lead to creating pragmatic expectations about what that type of sanction can achieve in that context.44 The sanctions package on Syria should lead to transactions being made more difficult, while the targeted measures on the Comoros Island were not likely to impose a material impediment to generate any behavioural change. Similarly, the arms embargo on the Democratic Republic of the Congo (drc) in 199345 and on Nigeria in the same year46 should not induce one to think that sanctions should have a decisive impact on the situation on the ground. The freezing of assets on targets in Tunisia47 and Egypt48 in the aftermath of the 2011 revolutions will not bring about peaceful transitions, but they will contribute to preventing former regime leaders from securing financial resources accumulated during their stay in power. The list of examples could continue, but these should suffice to show that behavioural change is often a misplaced criterion when it comes to sanctions. Not all sanctions are alike and their different forms should lead to different expectations. 5.4 Lesson Number Four: Multiple Targeting Complicates the Evaluation Targeted sanctions do not target societies, but individuals and entities. This means that the very same sanction regime can affect targets in different ways. 43 44 45 46 47 48

R. Alcaro, ‘Europe and Iran’s Nuclear Issue: The Labours and Sorrows of a Supporting Actor’, 49:3 The International Spectator (2014), pp. 14–20. F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience, cit. European Union, ‘Embargo on Arms Sales’, Declaration N. 33/93 on Zaire, 7 April 1993. European Union, ‘Bulletin of the European Communities, Commission’, Bulletin 7/8/1993 at para 1.4.6, November 1993, p. 103. Council of the European Union, ‘Council Decision 2011/72/CFSP’, 31 January 2011. Council of the European Union, ‘Council Decision 2011/172/CFSP’, 21 March 2011.

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Targets can be very different, ranging from heads of State to family members and individuals indirectly related to terrorist organizations. Some can be State officials engaged in human rights violations, others could be entrepreneurs working with government authorities. The longer the lists of targets, the more complicated it becomes to reach firm conclusions regarding the ‘effectiveness’ of a sanctions regime. The eu regime of sanctions on Burma/Myanmar had an impact on over 1200 individuals and entities.49 Targets ranged from members of the military junta, to relatives of entrepreneurs that were working with the government. Targets were extremely different, therefore the assessment of sanctions could (and should) be done at a micro-level, evaluating whether and how sanctions impacted the behaviour of individuals and entities on a case by case basis. Additionally, the purpose of the sanctions varied, so whereas sanctions intended to coerce some, they tried to constrain and signal others. The evaluation of sanctions in general, and of targeted sanctions in particular, cannot neglect the individual level of analysis. This is also the case for the terrorist list that the eu has adopted. Targets are very different even if all are considered to be a threat to the eu. The list contains Al Qaeda and its members, but also Hamas and several internal terrorist groups.50 While some of these entities are ideologically and religiously motivated, meaning an agreement may be difficult to reach, others are a response to political problems. Thus, dealing with a political problem could reduce the level of threat imposed by the group. Additionally, targets are moving and they can also decide to change their individual attitude towards a certain political objective, but this may not be due to sanctions but rather to the changing political environment and domestic considerations. Plus, certain actors may do this more easily, for instance firms, than others, such as local government officials. Once again, eu sanctions include a long list of individuals and entities treating them all the same. However, they are not and this should be part of any evaluation and discussion on effectiveness. 5.5 Lesson Number Five: Economic Pain is Not Linked to Political Gain The pain-gain logic that informs the debate is not accurate. Indeed, there are instances in which high economic costs imposed on targets can be counterproductive. This danger was identified by Galtung when he talked about the rally-around-the-flag effect of sanctions, which can occur only if there is an economic toll imposed on the population. In other situations, specific 49 50

For instance, see European Union, ‘Council Decision 2010/232/CFSP’, 26 April 2010. Council of the European Union, ‘Council Decision (cfsp) 2015/521’, 26 March 2015.

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characteristics of the target may render it less likely to acquiesce where the economic pain is higher. As the carrot can be better than the stick, a smaller stick can sometimes be better than a bigger one. The abovementioned case of eu sanctions on the us falls under this category. The economic pain was kept to a minimum and it is likely that economic sanctions with greater implications would have worsened, rather than enhanced, the us’s attitude to the eu. Greater economic damage would have justified greater repression in Uzbekistan from the national authorities. Keeping sanctions to a minimum has facilitated the dialogue between eu and Uzbek authorities, while harsher sanctions would have alienated the population from the eu. This is what occurred with Belarus, when sanctions were blamed for the economic mismanagement of the country. This is why the eu has developed a dual-track diplomacy approach, where sanctions target the elite, and foreign aid supports the population.51 The same strategy was attempted in Zimbabwe, but the results of the 2013 elections conceding a landslide victory to zanu-pf led by Mugabe may suggest that the rally-around-theflag effect was not reduced by the support given by the eu to the civil society in Zimbabwe.52 Such scenarios are good illustrations of the need to question the thinking according to which economic pain equals political gain. In fact, causing humanitarian damage decreases the effectiveness of sanctions by undermining their legitimacy in the eyes of the international community. Higher economic pain can also alienate the other party still further. This consideration was voiced in the first phases of the sanctions on Russia, but the same logic is also at work on the sanctions imposed after the Tiananmen Square events in China. Imposing stronger sanctions would reduce relations with China, the economic loss would cause more damage than has already occurred and there is little knowledge on the medium term consequences of artificially altering the relations between the West and China on human rights issues. More is not always better when it comes to determining the effectiveness of targeted sanctions. 51

52

G. Bosse, ‘A Partnership with Dictatorship: Explaining the Paradigm Shift in European Union Policy Towards Belarus’, 50:3 Journal of Common Market Studies (2012), pp. 367–384. F. Giumelli, ‘Understanding Success of Targeted Sanctions; The eu in Zimbabwe’, 6:2 Central European Journal for International and Security Studies (2012), pp. 160–186; H. Chingono, ‘Zimbabwe Sanctions: An analysis of the “Lingo” guiding the Perceptions of the Sanctioners and the Sanctionees’, 4:2 African Journal of Political Science and Intern­ ational Relations (2010), pp. 66–74.

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5.6 Lesson Number Six: Sanctions Can Provide Bargaining Power Among other things, sanctions can create bargaining power on occasions where there would not otherwise be some. The benefit of using sanctions in this way is not seen in the economic cost imposed on targets, but rather the way in which sanctions play out on the negotiating table. For instance, the promise of lifting sanctions or the threat to tighten the screw can break the stalemate of a negotiation and create a more favourable climate for the discussion. Sometimes, the mere threat of sanctions can be enough to affect the bargaining spirit of the parties. The usefulness of sanctions on Iran should also be understood separately from behavioural change. Although the most ambitious objective was for Teheran to abandon its nuclear project, sanctions were a central variable of the negotiation. Sanctions also became an important issue in the 2013 Presidential elections and their removal was an essential element for the negotiation that led to the agreement with international partners in 2015. Sanctions did not change the aspiration of Iran to develop nuclear capabilities, but they were useful in other ways.53 Moreover, it should also be mentioned that the imposition of sanctions from the eu came in 2010 amid intense pressures from the us to do something to reduce the increasing tensions in the Middle-East. The un speech delivered by Netanyahu in 201254 created a scenario wherein lack of action from the us and the eu may have pushed Israel to carry out military strikes over targets in Iran, which would have inflamed the situation. Sanctions did serve the purpose of reducing that danger and opening up new scenarios for the negotiation. Sanctions have also provided the eu with bargaining power in the case of Zimbabwe. Sanctions were imposed around the 2002 presidential elections. Tensions increased with the government of Robert Mugabe and sanctions followed suit. The results of the elections of 2008 did not grant the majority to any political party, therefore an agreement, known as the Global Political Agreement (gpa) between the major parties was necessary. Initially, the eu did not link the transition process to the revision of sanctions towards Zimbabwe, but beginning in 2009, sanctions were gradually lifted and the eu exercised pressure on targets during the process. Sanctions did become a 53 54

C.W. Sherrill, ‘Why Hassan Rouhani Won Iran’s 2013 Presidential Election’, 21:2 Middle East Policy (2014), pp. 64–75. J. Heller, ‘Netanyahu Draws “Red Line” on Iran’s Nuclear Program’, Reuters, 27 September 2012, available at http://www.reuters.com/article/2012/09/28/us-un-assembly-israel -iran-idUSBRE88Q0GI20120928.

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f­ actor to be considered for the parties at the negotiating table and the eu did manage to play a role between the Zimbabwe African National Front – Patriotic Front (zanu-pf) led by Mugabe and the Movement for Democratic Change (mdc) led by Tsvangirai. The elections of 2013 led zanu-pf to regain power, but as the elections were deemed free and fair, sanctions are being gradually lifted and the eu was able to participate in this process thanks to sanctions.55 Lesson Number Seven: Expectations Depend on Why Sanctions are Imposed Sanctions’ success is often linked to the behavioural change of targets, but what about those situations under which sanctions are imposed as a response to events that occurred in the past? On the one hand, sanctions can be seen as behavioural change tool but, on the other, sanctions can be the only device in the hands of States to punish behaviour that occurred in the past. The expectation of what happens after the imposition of sanctions is to be built on whether sanctions are about past or future behaviour. The arms embargo on China is a case of sanctions imposed ex-post. The sanctions came after an event, and the demands of the eu could not be linked to the rectification of what had happened already. Under such conditions, sanctions can exercise pressure on targets based on demands that are formulated by the political leadership, such as the improvement of human right conditions in the country. Sanctions can play a marginal role in further pressure, so without clear demands it would be naïve to expect any behavioural change. In such a context, sanctions can favour dialogue, increase awareness, contribute to including topics in agendas for international meetings and provide an important element to change the discourse on eu-China relations. Several rounds of sanctions have been imposed for actions that occurred in the past, for instance in the cases of the International Criminal Tribunal for the former Yugoslavia (icty) indictees, and in the post-transition scenarios of Tunisia, Egypt and Ukraine. In the case of the icty indictees, sanctions consisted of freezing of assets and a travel ban for individuals indicted by the icty in order to prevent them from escaping justice.56 In the other cases, former State officials were added to the ban in order to prevent the seizing of funds inappropriately acquired during their stay in power. In all these cases, the lifting of sanctions is not awaiting any specific behaviour from targets, but depends on the conclusion of criminal proceedings that will ascertain the 5.7

55 56

F. Giumelli and P. Ivan, ‘The Effectiveness of eu Sanctions – An Analysis of Iran, Belarus, Syria and Myanmar (Burma)’, supra note 21. Council of the European Union, ‘Council Common Position 2003/280/CFSP’, 16 April 2003.

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legality of their past actions. In such cases, the behavioural change of targets cannot be the criterion for effectiveness, but sanctions are indeed useful to complement the work of a judicial process. Other cases of sanctions do intend to influence what targets can/will do in the future. For instance, sanctions on Syria are imposed to reduce the human sufferance in the war. This is an ongoing civil conflict that is determined by what targets will do tomorrow. Since 2011, the opposition to the regime of President Assad has embraced weapons and a conflict has started. The eu has oscillated between very harsh stands on Assad to softer ones pondering the possibility of a role for Assad in the transition of power in Damascus. Sanctions are partly ex-post, but partly ex-ante since they also target future behaviours of the regime. The expectations in this case depend on what happens.57 Lesson Number Eight: The Impact of Sanctions Can Vary, Including Economic Cost and Opportunity Loss One of the most difficult exercises is to determine the impact of sanctions on local economies. Needless to say that sanctions’ scholars spend most of their time calculating the economic impact of sanctions, but this demonstrates little about the political response to sanctions. Additionally, as this section will explore, sanctions can cause losses in the present and in the future. This is a very common problem. For instance, employers will protest vehemently if their salaries are cut today, but they will be less interested (or aware) if their pension in the future will be lower. This is the same for certain sanctions that represent loss of opportunity rather than a real and immediate economic impact. A potential lower standard of living in the future is not as direct as an immediate drop in purchasing power. Both kinds of sanctions can be useful depending on the context of the application. eu sanctions on Myanmar and Belarus, for a long time encompassed the reduction (and the prohibition) of eu investments. The eu does offer packages of foreign and development aid when it engages in cooperation with developing countries. However, important financial resources that could have been available under regular relations could not be used in the case of Myanmar. The lack of investments had a toll on the development of the country, but it simply slowed it down rather than causing it to regress. In this context, the local authorities and the local population experienced slower development, but nevertheless an improvement of living conditions. This situation counters the classical logic of sanctions according to which the population should place

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S.E. Moret, ‘Humanitarian Impacts of Economic Sanctions on Iran and Syria’, 24:1 European Security (2015), pp. 120–140.

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increasing pressure on the ruling elite in order not to pay the economic impact of sanctions. These sanctions create missed opportunities rather than real costs for targets. In contrast the measures on Russia and Iran, among others, also had an immediate economic cost that was imposed on targeted societies. In both cases, a ban on investment in oil and drilling technology was imposed, therefore constituting the missed opportunity of higher growth in the future. However, sanctions included a ban on financial transactions that froze most credit lines to Russia and Iran with strong implications for the daily activity of individuals and entities. Such sanctions did have a bite and targets felt that something had changed. Sanctions that target long term capabilities, such as arms embargoes, have a different impact than those disconnecting banks from the swift network, as occurred in Iran, which have an immediate and shocking impact.58 However, the two measures are often treated equally. One of the first measures that the eu decides in moments of crisis is the suspension of eu funds, development and otherwise, towards the country in question. The suspension of funds was decided, in different phases, in the cases of Belarus, Zimbabwe, Syria and Iran among others, but the expectations on the impact of such measures was considered to occur under the same logic that would explain a ban on timber or freezing financial transactions. The former are less likely to affect the decision making of politicians, yet can be very useful to signal political commitment without harming the local population in the short term. The latter can have a more direct impact, but adjustment processes can allow targets to suffer the shock and the need to adapt as occurred for Russia and Iran among others. 5.9 Lesson Number Nine: The Wider Context is Significant Context is crucial for the evaluation of sanctions, meaning there are other elements that should be taken into consideration when assessing them, such as potential alternatives to sanctions. If sanctions seem to provide little advantage to senders, the alternatives to sanctions considering the costs can be even worse. Another aspect to consider is the changing relevance of one crisis over others. Crises are always relative to each other, so sanctions may be motivated by the cost/opportunity analysis at a given moment in time. However, if another crisis erupts, then sanctions may (and should) be revised and assessed accordingly. 58

Sanctions on Russia include a ban on arms, certain services related to arms and dual-use goods and restrictions on issuance of and trade in certain ‘bonds, equity or similar financial instruments’ among others. Sanctions on Iran included a restriction on buying oil from Iran.

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The eu has imposed sanctions on Belarus and its president Lukashenko on different occasions since 1996. The first time was to counter Lukashenko’s attempt to change the constitution that would have given him wide powers. The second time was to convince him to guarantee the rights of diplomatic immunity for eu staff in Minsk. The third time was triggered by the lack of investigation of the disappearance of a journalist. Finally, since 2004, sanctions have been imposed because elections were not free and fair and to punish the government for not granting rights to the opposition parties.59 Belarus is still considered the last dictatorship of Europe,60 and despite the sanctions the human rights record of the country has not improved and there seems to be no signs of new elite that would compete with the incumbent one. The image appears gloomy for sanctions, but this conclusion seems rash. Indeed, Belarus has not changed, but what else would have done the trick? The eu has not only imposed sanctions, but diplomacy has been at work and foreign aid intensively and laboriously dispensed. Why should sanctions be deemed ineffective? Given that other policy instruments have been used, it is hard to think about ways in which the situation could have been improved more effectively without the use of sanctions. The same logic can be applied to the case of Syria. After an initial phase of direct negotiation with the government of Assad, the eu imposed sanctions in different phases. First, it hit the inner circle of Assad. Second, it targeted Assad and others among his supporters. Third, the eu aimed sanctions at those benefitting from the Assad regime. The 2013 decision to lift the arms embargo was due to the desire to support some of the rebel forces in their struggle against the government. However, when the us suggested the use of military means to topple Assad, the eu was reluctant to intervene amidst concerns about the quality of the opposition groups. Indeed, there were reports showing that the opposition to Assad had become a melting pot of non-radical and radical groups that convinced the eu not to push for a change of regime in Damascus.61 Once again, sanctions did not solve the conflict and did not bring about the collapse of the regime, but what would have achieved this? The military option was considered, but the aftermath is an important part of the plan and the opposition groups in Syria did not provide enough guarantees. Although infinite discussions could take place on this point, it is at least difficult to argue that a silver bullet was available to solve the crisis in Syria and it was not

59 60 61

F. Giumelli, The Success of Sanctions. Lessons Learned from the eu Experience, cit. B. Bennet, The Last Dictatorship in Europe: Belarus under Lukashenko (London: Hurst, 2011). F. Giumelli, ‘Sanctions: Moving Targets and Goalposts’, euiss Alert 36 (23 July 2015).

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used.62 Sanctions did play a role, possibly constraining the major parties and reserving a role for the eu to stabilize the area, but the behavioural change criterion with an ongoing civil war does not do justice to the usefulness of sanctions in foreign policy settings. 6 Conclusions Sanctions should not be thought of in terms of being effective or ineffective instruments of foreign policy, sanctions should be considered instead for their usefulness. By looking at the experience of the eu in the last two decades, this chapter has shown that sanctions have served a number of functions that should be considered in any evaluation of the effectiveness of sanctions. Indeed, this chapter makes the argument that we should talk about the ‘usefulness’ of sanctions rather than ‘effectiveness’. The concept of usefulness regards the policy consequences that derive from the imposition of sanctions, rather than looking at the behaviour of targets, which respond to several stimuli and not only to sanctions. The adoption of a four-step procedure to the twenty years of experience of the eu leads to the identification of nine lessons that we should keep in mind when analysing cases of eu restrictive measures. A very common criterion is to look at the behaviour of targets to assess the effectiveness of sanctions, but sanctions can also constrain and signal. Additionally, context is very important in evaluating sanctions, as well as the fact that there could be many targets and/or that sanctions can have a minor impact on the economies when they are very specific. This analysis leads to three considerations regarding the effectiveness of eu sanctions. First, generally speaking, eu sanctions have been quite useful. In terms of reflective impact, the eu has strengthened its role on the international stage with the frequent use of sanctions. The eu has developed its own identity by acting in unison on crises such as China, the former Yugoslavia, Egypt, Syria and Iran. In terms of impact, sanctions have contributed to raising standards of human rights or, at least, including human rights standards on the agendas of countries that did not previously have them. Additionally, the eu successfully constrained Russia and Iran’s capabilities to achieve their objectives and contributed to the strengthening of the international counter-terrorism regime. Obviously, eu sanctions have not always attained their objectives and, 62

J. Landis, ‘The Syrian Uprising of 2011: Why the Assad Regime is Likely to Survive to 2013’, 19:1 Middle East Policy (2012), pp. 72–84; and F. Giumelli and P. Ivan, ‘The Effectiveness of eu Sanctions – An Analysis of Iran, Belarus, Syria and Myanmar (Burma)’, supra note 21.

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sometimes, they have worsened the situation. This occurred in the first phase of the former Yugoslavia case as well as in the case of Syria, when fully-fledged sectorial sanctions undermined the relative power of the parties that were intended to be supported. On other occasions, such as in the case of Myanmar, the eu stubbornly insisted on sanctioning hundreds of individuals instead of elaborating a more nuanced strategy with regional actors, while in other cases it limited itself to imposing figurative sanctions, such as the case of the arms embargo on Indonesia in 1998 or the sanctions on the Comoros Island, that went mostly unnoticed. This type of analysis departs from the behavioural change paradigm and attempts to bring a fruitful contribution to the discussion. This chapter has focused on the ways in which sanctions can be useful, but more elaborated and structural analysis should be done on this matter. Extending this research to non-eu cases could lead to a general classification of ways in which sanctions can be useful in foreign policy settings. Additionally, departing from what has been done in this article, more attention should be paid to how sanctions can be counterproductive. Overall, the utility of sanctions is evident from the practice of international politics, a fact that is demonstrated by the activity of the us, the un, the eu and other actors, but there is more to learn on this subject and further studies are necessary to advance our theoretical and practical knowledge of how sanctions work.

chapter 13

Western Economic and Political Sanctions as Instruments of Strategic Competition with Russia – Opportunities and Risks Joachim Krause Abstract This chapter deals with the efforts of the eu and the us to put pressure on Russia since March 2014. It addresses the question whether or not there was a consistent strategic logic behind Western sanctions against Russia. It looks at the effects of the sanctions and how far have they actually contributed to the economic plight of the Russian economy. It asks whether there were indications that Western sanctions might drive Russia into a military escalation. The author arrives at the conclusion that most Western governments have been more or less incapable of dealing properly with the kind of strategic challenge Russia is posing today and that sanctions have been predominantly symbolic in nature with no clear idea on what is to be done if sanctions fail to change the course of Russian policy or, even worse, if they drive Russia into seeking a military solution.

Keywords Russia – European Union – economic sanctions – Western strategic policy

1 Introduction Since the occupation and annexation of the Crimea in February and March of 2014, the Western community (i.e. the eu, nato as well as the broader Western world) has imposed both political and economic sanctions on Russia. The intention of these sanctions was often expressed in vague and general language, but they were understood as measures taken in reaction to the unlawful annexation of the Crimea. More sanctions were imposed after the incursions of Russian regular and irregular military and Federal Security Service (fsb) units in various parts of the Ukraine and the de-facto secession (possibly foreboding eventual annexation by Russia) of Donetsk, Luhansk and other cities in the

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Donbass area in Southeastern Ukraine. These sanctions obviously have the purpose of restoring the sovereignty and territorial integrity of the Ukraine. In December 2014, a group of sanctions were imposed by the us, Canada and the eu in order to force Russia to keep to the provisions of the Minsk ceasefire agreement of 7 September 2014. When in February 2015 the second Minsk ceasefire was concluded, the Western community has continued to uphold the sanctions pending a major shift in Russia’s foreign policy, which has not taken place. The sanctions policy, however, has not found unanimous support in the Western world. There are many voices in Europe demanding an easing of the sanctions in order to give Russia a real chance to fulfil the provisions of the Minsk agreements, which foresee, inter alia, the withdrawal of irregular forces from the contested area of the Eastern Donbass. Some observers seem to be concerned with the possibility of Russia suffering too much under the burden of sanctions. The governments of Austria, the Czech Republic, Slovakia, Hungary and Bulgaria have already voiced their concern and the Syriza-led government of Greece has struck a pro-Russian tone. One is left with the impression that leading political actors have only a limited understanding of the nature of sanctions diplomacy. German Foreign minister Frank Walter Steinmeier, German Vice Chancellor Sigmar Gabriel, and the High Representative of the eu for Foreign Affairs and Security Policy, Mrs Federica Mogherini, have stated that Western sanctions should not force Russia onto its knees. German Foreign Minister Steinmeier has added that it never was the intention of using sanctions to force Russia into economic disaster. He added that the economic downfall of Russia would cause havoc for other European States as well, since we are all interdependent. Vice Chancellor Gabriel even claimed that sanctions should not be used to start a new ‘cold war’. This reasoning was shared by leading Socialist politicians as well as by business representatives. It was Chancellor Merkel who insisted that sanctions should be uphold as long as there was no significant change in Russia’s policy towards the Ukraine. She avoided referring to the possibility that Russia could succumb to economic disaster. Sanctions’ diplomacy is a kind of coercive diplomacy. Usually, such a form of diplomacy means that one has to use economic levers until the other sides gives in – even if (or because) the other side would otherwise face economic havoc and disaster. Unlike other forms of coercive diplomacy, sanctions avoid the use of military force or even the threat of the use of military force (deterrence) even in light of a direct or indirect military threat. At least in Germany and Italy, the very idea of using military force or of applying deterrence is politically so compromised that sanctions almost came as a default solution after the Russian acts of aggression against the Ukraine. It is to be feared, however, that Western sanctions against Russia not only lack a comprehensive

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understanding of what has to be achieved, but that they are devoid of any plan of how to deal with a recalcitrant Russia that escalates the situation rather than giving in. Even worse, Western sanctions might increase the risk of armed conflict in Europe rather than reducing it. This article starts with some general remarks about the role of sanctions under conditions of existing or emerging strategic competition. It then turns to the efforts of the eu and the us since March 2014 to put pressure on Russia and it aims to address four questions: 1. 2. 3. 4.

Is there a consistent strategic logic behind Western sanctions against Russia or have they rather been the outcome of hasty decisions and uneasy compromises? What are the effects of the sanctions and how far have they actually contributed to the current plight of the Russian economy? Is there significant cause for concern if the Russian economy goes into deep recession? Are there indications that Western sanctions might drive Russia to escalate the situation militarily?

The author arrives at the conclusion that most Western governments have been more or less incapable of dealing properly with the kind of strategic challenge Russia is posing today and that sanctions have been predominantly symbolic political efforts with no clear idea on what is to be done if they fail to change the course of Russian policy or, even worse, if they drive Russia into seeking a military solution. Europeans, and to a lesser degree the us, seem to be unable to cope with a situation of strategic competition (or confrontation) with Russia. In terms of international stability, the current strategic blindness of the eu and of the broader West might be as alarming as the re-emergence of Russian revisionism and imperialism. 2

The Role of Sanctions and the Emergence of Strategic Power Competitions

With the term ‘international sanctions’, coercive measures are meant which are adopted by a country, a group of countries or by international organizations against States, individuals, companies, or organizations as a response to undesired behaviour, to breaches of international law, or as part of broader strategic competition. International practice shows that various kinds of sanctions have emerged in past decades: financial restrictions, restrictions on the

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access to certain technologies and materials, trade boycotts, travel bans and arms embargoes. Moreover, less frequent forms of sanctions include diplomatic sanctions, sanctions against individuals and sanctions against companies. Sanctions are an element of coercive diplomacy, which render the whole spectrum of coercive diplomacy much broader.1 There is a long tradition of using sanctions in international diplomacy in cases of serious human rights violations by individual governments, or where a certain State should be brought to respect international law.2 Yet, the scope of sanctions has always been much broader. During the past decade, sanctions have become important instruments of coercive Western diplomacy in efforts to cope with strategic challengers or upcoming peer-competitors. This has been the case with sanctions against Russia’s annexation of the Crimean Peninsula and its hybrid war against the Ukraine, with sanctions against the Iranian nuclear weapons program and with sanctions against North Korea. They might someday be an instrument to cope with China. The basic logic behind this new emphasis on sanctions is that in the face of a direct or indirect military threat they are helpful in avoiding the use of military means or even the threat of their use. Resorting to sanctions reflects the growing uneasiness within Western societies concerning the use of military means, even under conditions of strategic confrontation. In scholarly literature, sanctions have primarily been analysed with regard to their effectiveness, i.e. their ability to change the behaviour of a given, targeted government concerning a specific topic.3 In looking at the value of sanctions with regard to strategic competitors or emerging peer-competitors, the picture is much more complex. Here, it is interesting to look back at the debate 1 See A. George, Forceful Persuasion: Coercive Diplomacy as an Alternative to War (Washington, d.c.: United States Institute of Peace Press, 1991) and A. George and W. Simons, The Limits of Coercive Diplomacy (Boulder, Co.: Westview Press, 1994). 2 T.E. Førland, ‘The History of Economic Warfare: International Law, Effectiveness, Strategies’, 30:2 Journal of Peace Research (May 1993), pp. 151–162; see also G.C. Hufbauer, J.J. Schott, K.A. Elliot, B. Oegg, Economic Sanctions Reconsidered (Washington, d.c.: Peterson Institute for International Economics, 2009). 3 See: G.C. Hufbauer, J.J. Schott, K.A. Elliot, B. Oegg, ibid.; R.A. Pape, ‘Why Economic Sanctions Do not Work’, 22:2 International Security (1998), pp. 90–136; C. De Jonge-Outdraat, ‘Making Economic Sanctions Work’, 42:3 Survival (Autumn 2000), pp. 105–127; D.W. Drezner, The Sanctions Paradox. Economic Statecraft and International Relations (Cambridge: Cambridge University Press, 1999); J. Kirshner, ‘Economic Sanctions. The State of the Art’, 11:4 Security Studies (Summer 2002), pp. 160–179; M.P. Malloy, United States Economic Sanctions: Theory and Practice (The Hague: Kluwer, 2002); C. Portela, European Union Sanctions and Foreign Policy: When and Why Do They Work? (Abingdon: Routledge, 2010).

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on the role of sanctions during the period of the East-West conflict. The Western Alliance used economic and other sanctions to target the Soviet Union and its allies.4 The goal was not to alter the behaviour of the Soviet leadership, but rather to deny the Soviet military access to weapons and other strategically relevant technologies, thus raising the costs (including opportunity costs) of confrontation and preventing the Soviet military from making use of innovative technologies for military purposes. They also had the purpose of aggravating economic problems that were already bedevilling the centrally planned economy, thus forcing the Soviet authorities to shift investments away from military purposes to civilian ones. Sanctions were part of the overall confrontation with the communist regimes and were intended to indirectly influence the overall balance between the conflicting sides. Sanctions were often deemed economic warfare.5 They were highly contentious, since many argued that economic cooperation was a much better way to overcome the East-West confrontation.6 Western use of sanctions in diplomacy during the Cold War was mainly effective as it contributed to the overall weakening of the Soviet economy and military posture (mainly through embargoes on technologies). It also was underpinned by a military posture which sought to deter the Soviet Union from a military invasion of Western Europe. While economic relations between both blocs grew during the latter part of the Cold War, various measures imposed under the framework of the Coordinating Committee for Multilateral Export Controls (cocom) established by the Western powers remained effective until the early 1990s, including exports of strategically relevant technologies. In scholarly literature regarding the Cold War period, the potential of sanctions as an instrument of forcing targeted States to change their behaviour was credited as being limited at best.7 A study on the effectiveness of the economic sanctions against the Soviet Union came to the conclusion that the us was quite successful in denying arms and key technologies to the Soviets; however the collapse of the Communist regime was attributed to the internal inefficiencies of the system rather than to us economic sanctions.8 4 G. Adler-Karlsson, Western Economic Warfare. 1947–1967 (Stockholm: Almquist and Wiksell, 1968). 5 See T.E. Førland, ‘“Economic Warfare” and “Strategic Goods”: A Conceptual Framework for Analyzing cocom’, 28:2 Journal of Peace Research (May 1991), pp. 191–204; and M. Mastanduno, Economic Containment: CoCom and the Politics of East-West Trade (Ithaca: Cornell University Press, 1992). 6 A. Stent, From Embargo to Ostpolitik. The Political Economy of West-German Soviet Relations 1955–1980 (Cambridge: Cambridge University Press, 1981). 7 See A. George, Forceful Persuasion: Coercive Diplomacy as an Alternative to War, supra note 1; see also A. George and W. Simons, The Limits of Coercive Diplomacy, supra note 1. 8 See G.C. Hufbauer, J.J. Schott, K.A. Elliot, B. Oegg, Economic Sanctions Reconsidered, supra note 2.

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In the 1980s, the same method applied in cocom – harmonizing export restrictions by the listing of certain technologies which were not to be exported to certain States – was adapted to the nuclear proliferation regime. In 1986, the Nuclear Suppliers Group was founded in order to withhold crucial technologies for the production of nuclear weapons from suspicious States. This regime was complemented in 1987 by the Missile Technology Control Regime (mtcr).9 These regimes were further developed in the 1990s and today have become important elements of the non-proliferation regime.10 They all were intended to weaken potential strategic competitors and to keep them at bay. The pivotal country to which a whole set of sanctions was applied in order to prevent it from rising to the status of a regional strategic competitor was (for many years) Iraq under Saddam Hussein. The un Security Council (unsc) imposed sanctions against Iraq after the invasion of Kuwait in the summer of 1990 and after Operation Desert Storm in the spring of 1991, which lasted for more than ten years. The un sanctions regime against Iraq was intended to coerce the Iraqi leadership into the un imposed arms control regimes and to prevent the Iraqi regime from using its oil revenues for rearmament efforts.11 The result, however, was a humanitarian catastrophe. Due to the lack of cooperation by the Iraqi authorities, the economic situation of the wider population dramatically worsened and this was used by the Iraqi leadership to undermine Western diplomacy efforts in public. In particular, the Iraqi authorities reported an increase in child mortality, which was attributed to the international sanctions. The number of victims of this sanctions regime was estimated as numbering into the hundreds of thousands.12 More recent calculations have shown 9

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D.J. Scheffer, ‘Die Verhinderung der Weiterverbreitung von chemisch-biologischen Waffen sowie von Trägerraketen: amerikanische Gesetzgebung über Sanktionen’, 44 EuropaArchiv (1989), pp. 577–586. See J.H. Henshaw, The Origin of cocom. Lessons for Contemporary Proliferation Control Regimes (Washington, d.c.: The Stimson Center, 1993); G.T. Bertsch, R.T. Cupitt and S. Elliot-Gower (eds.), International Cooperation on Nonproliferation Export Controls. Prospects for the 1990s and Beyond (Ann Arbor: University of Michigan Press, 1994). J. Krause, ‘Die Kontrolle der irakischen Rüstung durch Vereinte Nationen und iaea’, 40:2 Vereinte Nationen (June 1992), pp. 46–51; T. Trevan, Saddam’s Secrets: The Hunt for Iraq’s Hidden Weapons (London: Harper Collins, 1999). A.H. Cordesman, Iraq: Sanctions and beyond (Boulder, Colo.: Westview Press, 1997); see also P. Conlon, United Nations Sanctions Management: A Case Study of the Iraq Sanctions Committee, 1990–1994 (Ardsley, n.y.: Transnational Publishers, 2000); and A. Alnasrawi, ‘Iraq: Economic Sanctions and Consequences, 1990–2000’, 22:2 Third World Quarterly (April 2001), pp. 205–218; H.-C. von Sponeck, Ein anderer Krieg. Das Sanktionsregime der uno im Irak (Hamburg: Hamburger Edition, 2005).

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that these figures were grossly exaggerated.13 Yet, as a consequence of these failures, the overall assessment in the academic literature during the late 1990s was that economic sanctions were futile instruments and that their humanitarian side-effects might often thwart whatever their intended positive impact may have been.14 The eventual invasion of Iraq by the us in 2003 was also based on the notion that sanctions had failed.15 What can be inferred from the past debate is that under conditions of an existing or an emerging strategic competition or rivalry, the role of sanctions has to be assessed within a different framework. This framework has the following components: 1.

The effectiveness of sanctions cannot be measured exclusively in looking at whether or not certain stated goals have been achieved. Rather, the effects of sanctions on the nature of the strategic competition should be looked at, i.e. how do they contribute to a weakening of the strategic competitor? To what extent do they contribute to a favourable change of the military balance? Do they offset the sender’s military efforts? Do they prevent a military confrontation from unfolding? To what extent are they helpful in furthering diplomatic solutions over a broad range of issues? How are they helpful in furthering or in blocking underlying strategic trends that might shape the nature of the overall competition? 2. Since sanctions under conditions of existing or emerging strategic competition most likely need some time to show results, management of consequentiality becomes an element of utmost importance. It starts with the clarity with which the imposition of sanctions is being 13 14

15

M. Spagat, ‘The Iraq Sanctions Myth’, Pacific Standard (26 April 2013), available at http:// www.psmag.com/navigation/politics-and-law/the-iraq-sanctions-myth-56433. R.A. Pape, ‘Why Economic Sanctions Do Not Work’, 22 International Security (Autumn, 1997), pp. 90–136; see also T.G. Weiss, ‘Sanctions as a Foreign Policy Tool: Weighing Humanitarian Impulses’, 36:5 Journal of Peace Research (1999), pp. 499–509; see also J-D. Kirshner, ‘Economic Sanctions. The State of the Art’, 11:4 Security Studies (Summer 2002); D. Cortright, G.A. Lopez, L. Gerber, Sanctions and the Search for Security, Challenges to un Action (Boulder, Col.: Lynn Rienner, 2002); D. Cortright and G. Lopez, The Sanctions Decade: Assessing the un Strategies in the 1990s (Boulder, co: Lynne Rienner, 2000); J. Babic and A. Jokic, ‘Economic sanctions, morality and escalation of demands on Yugoslavia’, 9:4 International Peacekeeping (Winter 2002), pp. 119–126; D.L. Tehindrazanarivelo, Les sanctions des Nations Unies et leurs effets secondaires, assistance aux victimes et voies juridiques de prevention (Paris: Presses Univ. de France, 2005). J. Krause, ‘Multilateralism: Behind European Views’, 27:2 The Washington Quarterly (Spring 2004), pp. 43–59, at 45–49.

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justified and the spelling out of mid- and long-term goals. But the main problem is how to keep up the pressure of sanctions if the targeted side retains a recalcitrant attitude. Hence, without consequentiality, diplomacy through the use of sanctions cannot lead to any success. With too much consequentiality, however, diplomatic opportunities to solve the underlying political dispute might be forfeited. Governments might lose their ability to control the management of consequentiality if public opinion is becoming critical with regard to the alleged or actual humanitarian collateral damage of sanctions, whereas targeted governments might seek to mobilize Western public opinion by (often false) information in order to escape the sanctions. This kind of diplomacy is a very complex policy area, in which public diplomacy is an important component. Sanctions as a substitute for other means of coercive diplomacy, in particular as an alternative to the use of military force, have to be looked at in a different way than sanctions that are directed at the human rights record of a certain country. If they do not suffice to substitute military means, the role of military means will have to be reassessed, a process which is politically extremely difficult in most European States. The Strategic Logic behind Western Sanctions Diplomacy against Russia

Western sanctions diplomacy against Russia started immediately after the ‘cold annexation’ of the Crimea by regular Russian military units which acted as if they did not belong to Russia. On 6 March 2014, the eu Council strongly condemned the occupation and demanded negotiations between Russia and the Ukraine. After it became evident that Russia was not interested in de-­ escalation and negotiation, the first set of sanctions was imposed by the eu as well as the us in mid-March 2014. These were measures of limited scope and they were intended to force Russia into a dialogue with the Ukraine, which was already a very unlikely option. In their decision from 17 March 2014, the Council of the eu stated …that the solution to the crisis should be found through negotiations between the Governments of Ukraine and of the Russian Federation, including through potential multilateral mechanisms, and that in the absence of results within a limited timeframe the Union will decide on

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additional measures, such as travel bans, asset freezes and the cancellation of the eu-Russia summit.16 The language was vague and evasive; it avoided any expression that would force Russia into anything except negotiations. The restrictive measures were individual sanctions against persons said to be involved in the annexation on the Russian side. Since Russia didn’t show any intention to cooperate and, in April 2014, rather incensed so-called people’s insurgencies in various cities of Eastern and Southern Ukraine (mainly carried out by regular Russian soldiers and intelligence officers as well as irregular soldiers from all parts of Russia), the us Government imposed a ban on business transactions of seven Russian officials and seventeen Russian companies at the end of April 2014. At the same time, the eu Council issued travel bans against another 15 individuals. On 29 April 2014, the eu issued a factsheet paper stating the aims of sanctions. According to this paper, sanctions are not punitive, but designed to bring about a change in policy or activity by the target country, entities or individuals. Measures are therefore always targeted at such policies or activities, the means to conduct them and those responsible for them. At the same time, the eu makes every effort to minimise adverse consequences for the civilian population or for legitimate activities. This paper, which was neither an official statement of the EU Council nor a statement of the European Council, has subsequently mysteriously disappeared from the website of the eu and only can be retrieved through secondary sources.17 In July 2014, after the shooting down of the Malaysian Airlines flight mh 17 (by Russian separatists or, more likely, by Russian military personnel leased out to the separatists), Western States imposed further sanctions on Russia, including a ban on selling weapons, a ban on investments in and exports to the Crimea and the occupied territories in Eastern Ukraine, and a prohibition on Western financial institutions extending credits to many Russian banks and companies. In September 2014, the Ukrainian government and representatives of the separatists agreed upon the Minsk Protocol (under osce mediation and Western supervision), which included a cease fire and a political roadmap for 16

17

Council of the eu, Decision of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (2014/145/CFSP). The quotation was retrieved from the Wikipedia entry International Sanctions during the 2013–15 Ukrainian Crisis (accessed 15 January 2015).

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a solution within the jurisdiction of the Ukraine. Russia didn’t sign the agreement and the representatives of the separatists were loath to implement most parts of the protocol from the beginning, in particular those provisions which stipulate that the political solution for the conflict should be sought within the framework of the Ukrainian constitution. Hence, many sanctions were already further sharpened in September 2014 as well as in December 2014 in order to force Russia to exert pressure on the separatists. In retrospect, all these sanctions were imposed as reactions to Russian military actions or violent moves by the separatists (which are highly dependent on the Russian government and who are more or less instruments of the Russian government), which were considered to escalate tensions. However, in looking at the language used by the European Council or the Council of the eu, one is surprised to see that no clear conditionality has been defined. There is no statement which sets up the conditions Russia must fulfil in order for the sanctions to be lifted. Sanctions are not even called ‘sanctions’, they are just referred to as ‘restrictive measures’. This reflects the highly contentious nature of using sanctions in diplomacy. There is a clear divide among Europeans between those who want to have biting sanctions (and even military preparations) against Russia, and those who display a quite relaxed attitude and even go so far as accusing the Ukraine of having provoked Russia. It is not only Southern European States that are unsupportive of sanctions: in addition to Italy, Spain and France, the Czech Republic, Slovakia, Austria and Hungary are among those who were highly sceptical of sanctions against Russia. It has been mainly the German government which has been able to bridge the differences and to arrive at a common language which at least allowed for some kind of sanctions. Hence, Europeans are far away from any kind of consequentiality management. They neither have clear goals nor clear cut conditions, and since the sanctions will be upheld for only 12 months, political disputes will be raging time and again. Seen from Moscow’s perspective, Europe is not a strong force, but an institutional actor which consists of various power centres with differing opinions on which one can work in order to further drive deep wedges between them. In looking at Russian commentaries, the view is openly discussed that the strength of Russia is its centralized leadership and clear strategic guidance, while the greatest weakness of Europe is its diversity which results in strategic confusion.18 18

D. Trenin, ‘The Ukraine Crisis and the Resumption of Great-Power Rivalry’, Carnegie Moscow Center, 8 July 2014, available at http://carnegie.ru/2014/07/09/ukraine-crisis -and-resumption-of-great-power-rivalry; S. Karaganov, ‘The Watershead Year, Interim Results’, 4 Russia Global Affairs Magazine (2014), reprinted under http://karaganov.ru/en/ publications/353.

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us sanctions are much clearer and more consequential and they last longer. However, given the lesser degree of us-Russian economic ties, their impact will be felt less than any European measure. The consequentiality of European sanctions is thus the most important factor in determining success or failure of Western sanctions in this situation. 4

How Effective are the Sanctions?

In order to establish the effectiveness of Western sanctions, one has to proceed from the notion that there are different kinds of sanctions that will produce quite different effects. Moreover, there are secondary effects and developments which will also have an impact on the overall scene. Most sanctions are directed against individuals (either from the Russian political, military or economic establishment or among the separatist forces). As a rule, these measures include travel bans or restrictions against business activities in Europe or in the us. In some cases, they also involve the freezing of bank accounts. The effectiveness of these measures is limited, since most of the persons concerned have not been in the West for years and seem to have no interest in travelling abroad. Only those oligarchs and billionaires close to Russian president Vladimir Putin, who have major financial assets at Western banks, might feel uncomfortable. But for billionaires, temporarily losing access to some millions might not spell havoc. So far, there is no indication that these sanctions have had any tangible effect. Some sanctions are of purely symbolic nature, such as suspending sessions of the nato-Russia Council (which has in any case turned out to be totally incapable of being a forum for strategic dialogue) and ousting Russia from G8. These are measures which have had no significant effect so far on Russian behaviour and most likely will have none in the future too. Another set of sanctions relates to investment and trade activities with the occupied territories of the Ukraine. Banning investments and trade with the illegal new authorities and with private actors is a necessary element of any sanctions, but it is not likely to force the Russian government to seriously reconsider its overall strategy. Most likely, very few strategically relevant activities are noticeably affected. Some sanctions concern transfers of weapons systems, arms and dual use goods, such as technologies suited for civilian and military purposes. Since July 2014, no new arms sales are permitted to go to Russia, and even pending transfers, such as the delivery of a modern helicopter carrier from France to Russia, were finally cancelled. The effect of these measures will be felt only in

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the mid- to long-term future. They do not reduce the quantities and qualities of weapons systems available to the Russian military, but they increase the costs and opportunity costs of Russian armaments efforts. Since the economic basis of Russian arms production is relatively small – Russia’s gnp lies in the range of the gnp of Italy or Spain – it is to be expected that any measure that would restrict the acquisition of military and dual-purpose technology would be felt much more strongly than in any similar State. A similar picture emerges with regard to sanctions banning the transfer of modern technology and equipment for exploiting oil and natural gas resources. Russia’s economy is heavily dependent upon the income from exports of natural gas and petroleum. Restrictions on the export of most modern technologies does not inhibit the exploitation of these resources by Russia, but they slow down any efforts towards expanding the upstream production of natural gas and petroleum. All measures listed so far have only limited or long-term effects at best. The only sanction that has already a tangible effect on Russia has been the closing of Western financial institutions for Russian banks, State entities and companies seeking credits in us Dollars or Euros. Given the high degree of dependency of Russian companies and banks on access to Western financial markets, this measure has turned out to be quite effective. Major Russian companies such as Rosneft or Gazprom have a need for hard currency credits at $20 to $30 billion per year. Among the existing total of $500 billion credits Russian companies and banks have drawn from Western financial institutions in the past, there was a need to re-finance credits within the range of $150 billion in 2015 alone. As long as they are banned from Western financial markets, they have to ask the Russian State to step in as a creditor or to look for other creditors, such as China. The ability of the Russian State and the Central Bank of Russia to step in with hard currency credits is limited, however, since the indirect consequences of the war have started to haunt the Russian economy: • After the annexation of the Crimea and after it had become obvious that Russia was not ready to give in to the demands of the international community, foreign investment capital was hastily withdrawn from Russia. While Russia was proud to have a per year positive net balance of foreign direct investment at an amount of $40 to $70 billion in previous years, in 2014 the Central Bank had to register a negative capital flow of more than $130 billion. The withdrawal of international capital from Russia was unrelated to sanctions. It was a reflection of the deep uncertainty about the trustworthiness of the Russian government, which has broken all relevant international treaty obligations during the aggressions against Ukraine.

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• Beginning in 2013, the price for petroleum has decreased from $120 per barrel (in early 2013) to $80 per barrel in November 2014 and reached a low of less than 40$ per barrel by the end of 2015. The decline of the oil price has its origins in the changing structure of international oil markets, which is partly caused by the increased use of fracking and other new technologies in the us and Canada. The Russian State is heavily dependent on an oil price of more than $100 per barrel in order to keep its finances balanced. As a consequence, the foreign currency reserves of the Bank of Russia decreased in 2014 from $470 billion to $ 418 billion, and in 2015 it went further down to $ 365 billion, thus inhibiting its ability to ease the consequences of the sanctions. It is to be expected that the foreign currency reserves will further shrink in 2016 as long as the Russian government does not give in with regard to Ukraine. The prospects for growth are already quite dim in Russia: economic growth has not only come to a halt in 2015, Russian economic activities actually decreased by almost 4 %. In sum, sanctions imposed upon Russia by the eu, the us and other Western powers have only limited effects; however, in combination with the economic consequences of the decline of oil prices and the radical withdrawal of international capital from Russia, the prohibition on accessing Western financial markets has shown remarkable effects. Given the current trends, the Russian economy (as well as the citizens of Russia) is already feeling the dire consequences of these economic trends. 5

Will Russia Collapse?

While it is foreseeable that Russia will have to face serious consequences during 2015 and 2016, it is hard to predict what the nature of these consequences will be. Some have expressed the fear that Russia’s economy might collapse, thus putting Western economies at risk, which are dependent on Russian oil and gas supplies. In principle, one can never exclude the possibility that economic sanctions would bring about unforeseen consequences, but the probability might nevertheless be assumed to be quite low. Given the limited nature of Western sanctions and the known resilience of the Russian economy, it seems quite a far-fetched idea that sanctions could cause the collapse of Russia’s economy. It is therefore surprising to see so many European politicians musing about this very possibility. If Russia’s economy should suffer from a very deep recession in the coming years, it might rather be the result of the structural weaknesses of the Russian economy, which is too highly dependent

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on the natural gas and petroleum sector, and due to the tight grip of the State (and the financial interests of President Putin’s cronies, who are all dollar billionaires), which has become the biggest obstacle for a thorough reform of the economy. A much more important factor is the lack of trust of investors and the business sector of the soundness of the Russian government. A government that easily breaks international treaties might be equally ready to break commercial treaties as well – in particular a government well-known for the greed and corruption among its ranks. 6

Will Western Sanctions Drive Russia to Military Escalation?

There is much greater chance that Russia might try to eschew the effects of economic sanctions by resorting to military means. The use of military means could involve threats of military action, but it could also mean the launching of an armed aggression. Surprisingly, very few politicians in Europe are ready to discuss this possibility. Obviously, it does not fit into the overall narrative according to which the West is trying to de-escalate the situation by renouncing the use of military means. Such a scenario also does not fit with the basic tenet of European diplomacy, which assumes that military means do not solve any problem. As seen from the Russian side, however, resorting to military solutions might be one legitimate option to solve their problems. Russia is economically weak and vulnerable, while the Western alliance, in particular the eu States, are poorly equipped and politically hardly prepared to seriously address any Russian military threat. Currently, the only threat that is being discussed in European capitols (in particular in Berlin and Brussels) is the threat of a Great War (World War iii) or of an ‘escalation’, yet no one has really defined what an escalation would be. Indeed, the danger of a Great War does not exist, since neither Russia nor the West has the military means available to launch any major invasion – for the time being nato might not even be able to conduct a defensive war. The overall level of armed forces in Europe is quite low since the Treaty on Conventional Forces in Europe (cfe-Treaty) was agreed upon and implemented in the 1990s. However, there are military options available to Russia to counter the Western economic dominance and to punish the West for imposing sanctions against Moscow. Some of these military options might pose insurmountable problems for the eu and nato if they do not prepare themselves for these contingencies. It is to be feared that the Russian President will look into these options the more the economic situation in Russia deteriorates. There are at least four options that need to be mentioned here:

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• The constant improvement and upgrading of the so-called separatist armed forces in the Eastern Ukraine: Originally, these forces were militias consisting of local hotheads and criminals, professional Russian servicemen and intelligence officers, who were formed to occupy public buildings and secure major cities. Since summer 2014, they have been upgraded and augmented by regular Russian units (from the level of companies up to full battalions) in order to be able to withstand and even defeat regular Ukrainian forces. In early 2015, it became obvious that the ‘modernization’ of these militias has progressed to a degree that they are a match for regular Ukrainian troops. • The initiation of military offensives in the Ukraine with the intention to enlarge the separatist held territory: While the separatist armed forces claim to be independent from Russia, their dependency on Russia weapons, Russian ammunition and Russian ‘volunteers’ (which are partly drafted privates and ncos) makes them an instrument of Russian policy. The focal point of any such escalation might be the push to take the city of Mariupol in Eastern Ukraine and to cut through to the already Russian occupied Crimea.19 • The intimidation of European States, in particular smaller and neutral States, by openly threatening them with military intervention or aerial attacks: This has been the case since early 2014. During 2014, more than 150 aerial feintattacks have been made by Russian aircraft against the Baltic States, Sweden, Poland and Finland. Similarly, the Russian navy undertook mock attacks against Lithuania, Latvia and Estonia. In early 2015, a ship that was laying an electricity cable connecting Sweden with Lithuania was forced to withdraw by a Russian naval craft within the exclusive economic zone of Lithuania. Since December 2014, nuclear capable aircraft have been among the deployed aircraft, adding a nuclear dimension to those threats. In addition, nuclear bombers flew through international airspace over the North Sea and the Eastern Atlantic close to national borders of nato member States. nato’s Nuclear Planning Group took up this issue in its session on 5 February 2015. The nuclear dimension of this threat is particularly worrisome, since the tactical nuclear arsenal of nato is limited to a few scores of warheads that are distributed among various European States that often lack the aircraft able to carry them. This posture is nothing in comparison to 2,000 to 3,000 theatre nuclear weapons that Russia holds in its western regions.

19

R. Lyman and A.E. Kramer, ‘War is Exploding Anew in Ukraine; Rebels Vow More’, New York Times (23 January 2015).

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• Occupation of the Baltic States by a surprise attack: Already in 2013, Western intelligence services observed two seemingly independent Russian military exercises, which had a common denominator. One exercise tested Russia’s ability to occupy the Baltic States, the other its ability to fend off an attempt by nato to liberate these States. Since Lithuania, Latvia and Estonia are member States of nato, it is unclear whether Russia would actually dare to launch such an invasion. Russian armed forces would be able to successfully launch such an offensive, since local defence forces are too small and there are no substantial units of other nato States in place which could assume their defence. However, there is great amount of uncertainty about the reaction of the us in this case. Nevertheless, this possibility cannot be excluded, in particular if President Putin feels himself cornered due to the deteriorating economic situation. Putin might be tempted to pursue such a step, since it could expose the weaknesses of nato and lead to its eventual disintegration. If, for instance, nato could not launch a counter-offensive against the occupation of the Baltic States and if the us was reluctant to threaten Russia with the use of nuclear weapons, this could be viewed by Putin as an opportunity to destroy nato as a political entity. Nobody knows whether he and his advisors think in this way, but the preparations for the occupation of the Baltic States in combination with the aerial nuclear threats speak a certain language and might forebode some nasty scenarios, which could have been avoided if nato had been ready to station foreign troops on a permanent basis on the territory of the Baltic States. However, the nato summit in September 2014 could only agree on limited measures to enable the nato Reaction Force (Very High Readiness Joint Task Force – vhrjtf) to establish a few landbased units and to position material in the Baltic States beginning in 2015. Thus, looking at these developments, it can be concluded that it is reasonable to expect that Russia will proceed with military measures if the combination of sanctions and economic disaster begins to cause trouble for Russia’s president. It would at least be more appropriate to think along these lines than to muse about the possibility that the Russian economy will collapse due to Western sanctions. If the Russian economy should collapse, it would be mainly due to the falling prices of petroleum and the loss of confidence by private investors in the soundness of Russian political and economic leadership. Thinking publicly about Russian military options, however, is politically a taboo. Deploring the possibility of a collapse of the Russian economy as a consequence of Western sanctions, however, has become a standard repertoire of European politicians.

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7 Outlook Western sanctions imposed against Russia in 2014 and 2015 have been implemented without a clear concept of what is to be achieved and without any clear conditionality. In particular, European sanctions have been mainly symbolic and might only become effective in the long run. The only effective measure – in the sense that it can restrain the Russian president – is the ban placed on Russian banks and companies which hinders them from refinancing themselves at Western financial institutions. There is no management of consequentiality on the side of the eu; on the contrary, the disputes among Europeans have become public. The divide is, on the one hand, between those who see the strategic challenge posed by Russia as a prime concern, and those, on the other hand, who are primarily looking for business opportunities with Russia (or who share the authoritarian values of Putin). The main motive behind European and us preferences for economic sanctions is to avoid a military confrontation and to eschew the use of military force at all. However, the outcome might turn out to be exactly the opposite of what is desired. Applying economic screws on a State with so many economic weaknesses and with such a well-known preference for military force such as Russia, is extremely risky. It would have been more prudent to apply biting sanctions and to prepare for potential military action by the other side if those sanctions were effective. The eu and the Atlantic Alliance have ushered themselves into the most serious test of their foreign policy strategies since the Yugoslav wars between 1991 and 1994. This time, it is not a Russian proxy that the West is facing, but Russia itself. However, Russia is currently stronger than in the 1990s and is being ruled by a president who has domestically almost absolute power and absolutely no inclination to acknowledge defeat.

Conclusion Natalino Ronzitti As may easily be inferred from the chapters of this volume, the word sanction suffers from definitional problems and has not yet found a definitive conceptualization. The distinction between sanctions, countermeasures and retorsions drawn by the ilc is accepted in theory, but is often neglected in practice not only by States but also by international law authors. Even eclectic definitions may be counted, such as that which the eu prefers to employ, i.e. the term ‘restrictive measures’. For our part we choose to stick to the ilc definition, since the distinction between sanctions, countermeasures and retorsions is not purely academic but carries with it legal consequences as to the lawfulness of measures taken. However, it should be recognized that the categorization made by the ilc is not the last word and many points need to be clarified such as the use of countermeasures by States or international organizations to protect the collective interests of the international community. Sanctions, countermeasures and retorsions are aimed at coercing or inducing the targeted subject to change or desist from the behaviour that the State or the international organization resorting to such measures finds illegal or inappropriate. Usually they do not have a punitive character. They are thus form of coercion, whose lawfulness should be assessed taking into account the provisions governing them. Sanctions, but also countermeasures and retorsions, are an alternative to the threat or use of armed force and for that reasons they are considered more acceptable by the international community, even though extreme and persistent measures of economic coercion may produce more harm than a limited intervention carried out with a contained use of force. This is true, for instance, for sanctions which result in famine affecting the whole population of the targeted country, which are generally regarded as illegal. States and international organizations resort to a number of measures in order to induce a targeted State to change its behaviour. They have been enumerated by Michael Bothe in his chapter: bans or restrictions on trade in commodities, financial transactions and access to the financial market; interruption of communication; freedom of movement of persons and on interstate and private trans-border contracts, etc. A non-exhaustive enumeration is given by Article 41 of the un Charter as to the measures which may be taken by the Security Council even though the Charter does not use the term ‘sanction’. The choice depends on the objective to be pursued. Selective measures and individual sanctions may be an option. More encompassing measures may be

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004299894_015

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needed as in the case of non-proliferation. There is no common rule and the choice also depends on a number of factors, including the economic interests of the targeting State/States, whose commercial interests may suffer as a result of the restrictive measures taken. The recent measures taken by the eu against the Russian Federation are a case in point, as illustrated by the division among the European countries. Sanctions taken by the Security Council are, for obvious reasons, a post-cold war phenomenon and their concept has been changed over time moving from general sanctions to targeted or smart sanctions. Sanctions and countermeasures belong to coercive diplomacy and the dividing line between such diplomacy and intervention, namely intervention prohibited by international law, is often blurred. Even more so since the parameters of the principle of non-intervention are still being defined, notwithstanding the relevant icj jurisprudence, though the threat or use of force is clearly prohibited by the un Charter. Sanctions, countermeasures and retorsions are taken by international organizations, both universal and regional, and by States against other States and/ or entities and individuals, as in the case of the fight against international terrorism. Only measures of this type are considered in the present volume, while measures against international organizations have not been dealt with. For those who accept the distinction between sanctions, countermeasures and retorsions, sanctions fall under the competence of the Security Council and may be resorted to even if the targeted State has not committed any international wrong, whilst States and regional organizations are not empowered to take sanctions, but only countermeasures in response to an internationally wrongful act committed by the targeted State. The only point of contention is whether a State (or regional organization) may take a countermeasure in the case of violation of an erga omnes obligation even if it is not directly injured. A shared interpretation might be that countermeasures by non-directly injured subjects may be resorted to only in cases of a violation of serious gravity. Retorsions, which are merely unfriendly acts, are usually measures taken by States. This fragmentation is not useful for a categorization of coercive measures and their regulation. The effectiveness of sanctions is usually measured by their ability to change the conduct of the targeted State. Daniel Joyner, quoting findings made by leading authorities on the subjects, recalls that economic sanctions have achieved their objectives in only thirty-four percent of cases. In this volume the question of the effectiveness of sanctions is examined in two Chapters, dedicated respectively to the practice of the eu (Francesco Giumelli) and to the measures taken against the Russian Federation (Joachim Krause). It is pointed out that effectiveness or ineffectiveness in achieving the desired

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change of behaviour of the target State are not the only measures of usefulness. Sanctions should also be assessed by taking into account the policy consequences that they produce and the signals they send to the targeted State, for instance pointing out the illegality of the behaviour of the targeted State and the disapproval of the sanctioning State/States. Other scholars adhere to the notion of effectiveness, and sanctions are viewed as an alternative to the use of military force. In assessing sanctions against Russia, Joachim Krause says that the “main motive behind European and us preferences for economic sanctions is to avoid a military confrontation and to eschew the use of military forces at all”. He warns that applying economic sanctions against a State which is economically weak but militarily strong might be risky, since it might push the targeted State to resort to militarily force in order to prevent a deep economic/financial crisis. As far as non-proliferation is concerned, the case of Iran shows that a policy of sanctions accompanied by a diplomatic process may be successful. However, a cost/effective evaluation of sanctions (both for the sanctioning States and the targeted State) is needed and has yet to be developed. Are there remedies available to the targeted State that intends to resist sanctions/countermeasures? If the targeted State is not a weak State a remedy – leaving aside the resort to armed force – might consist in taking countersanctions as the case of Russia demonstrates. The lawfulness of commercial counter­mea­sures may be raised before the wto system or other appropriate mechanisms such as an arbitral tribunal. While un sanctions enjoy the supremacy clause under Article 103 of the un Charter, countermeasures taken by regional organizations, such as the eu, or by individual States, cannot invoke a similar clause for not performing a treaty obligation stemming from a bit or a fnc. As Andrea Atteritano and Beatrice Deli show, States “are quite reluctant to bring claims against their counterparties in case of international sanctions” and prefer to rely on counter-restrictive measures as Russia did against the eu. The situation is different for contracts affected by sanctions or countermeasures. In this case the targeted entity may bring a claim before the national court of the targeting State or even to a supranational authority such as the European Court of Human Rights or the European Court of Justice. As demonstrated by Bryan Early, the effectiveness of sanctions may be diminished by their circumvention, unless a strict system of surveillance is developed, including mechanisms rendering the perpetrators accountable. Effectiveness may also be diminished by non-uniform application of restrictive measures by the countries obliged to implement them. Violations may be deliberate but also unintentional. In addition one has to take into account the policy of third States not obliged by countermeasures taken by individual

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States or regional organizations. The practice of some States (mainly the us) to attempt to give an extraterritorial effect to their national legislation is open to controversy and doubts of its compatibility with international law, as Charlotte Beaucillon argues. In addition its usefulness is questionable since it risks exacerbating relations between allies. eu sanctioning legislation on this matter is quite broad, but has never been stretched beyond the limits allowed by general international law (Marco Gestri). Sanctions against insurgents and terrorist movements are measures taken against non-State actors which have specific features which differ from those taken against other non-State entities such as individuals and government elites. Early examples are sanctions against unita and the Bosnian Serbs. Recent practice includes sanctions against Al-Qaida and isil. Sanctions were taken by the Security Council aimed at protecting peace and international security and, as Nigel White points out, they differ from countermeasures which are more suitable for inter-State relations and to respond to violations of international law rather than maintaining peace and international security. Sanctions affecting the freedom of people and human rights raise the question of their legality. Remedies available within the un system are generally of an administrative nature such as the institution of a focal point or an ombudsperson who might refer to a sanctions committee. Are States obliged to unconditionally comply with Security Council Resolutions or are they allowed to question their legality if there is an infringement of a human rights standard? Article 103 of the un Charter does not provide an unconditional shield against targeted sanctions that limit or affect human rights standard (Monica Lugato). Inter alia Article 103 affirms “the prevalence” of the Charter obligations over the conflicting treaty obligations and not over those deriving from customary international law. This interpretation is in keeping with the latest anti-terrorist Resolutions which underline that anti-terrorist measures should be in keeping with international law, human rights law, humanitarian law and refugee law. Is there a need for a comprehensive model for restrictive measures taken against States? The response is usually yes. However the discourse is complicated by the nature of measures taken whether they are sanctions or countermeasures. Retorsions do not came into consideration since, as mentioned, they are only unfriendly acts which do not violate international law. While countermeasures have been thoroughly discussed for years during the ilc work on the Law of State Responsibility (and also on the Responsibility of International Organizations), a similar discussion has not been held for sanctions, leaving aside the debate within the Security Council in 2014 and

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Resolution 27/21 adopted by the Human Rights Council the same year. The claim of the third world that sanctions cannot be imposed outside the Security Council should not be shared if it encompasses not only real sanctions but also countermeasures. This said there are some common elements that may apply both to sanctions and countermeasures and others that are peculiar to each of them. It is understood that while sanctions are aimed at restoring peace and international security, countermeasures are more a State to State concern, with the possible exception of countermeasures taken by third parties against a State responsible for having violated an erga omnes obligation. However sanctions are independent from a concrete violation of a norm of international law, whilst countermeasures imply such a violation even when they are taken by a third party for vindicating an erga omnes obligation. Unlike countermeasures, sanctions are not subject to detailed regulation. As noted, the latest sanctions embodied in Security Council Resolutions include a reference to the legal parameters to which the measures taken should conform (respect of international law, humanitarian law, human rights and refugee law). Another feature is the move from general sanctions to smart or targeted sanctions, to avoid impacting the population of the State concerned. These are difficult to implement whenever financial sanctions are involved. Are sanctions and countermeasures completely autonomous or mutually reinforcing? The answer is both yes and no. Yes, since sanctions may be taken even if an international wrong has not been committed; and no, since countermeasures may be added to sanctions and may not be lifted with the termination of sanctions. Sanctions aimed at prohibiting the freedom of movement of targeted persons or at freezing their assets should be coordinated with other bodies, for instance the icc (as the chapter by Marina Mancini shows), otherwise conflicting decisions may be taken. Sanctions and countermeasures should be subject to appropriate regulation, taking into account the risk of de-politicizing a decision which is eminently political, particularly for sanctions decided by the Security Council (Thilo Marauhn and Ignaz Stegmiller). A way forward could consist in leaving untouched the political nature of the ‘prise de decision’ (together with its opportunity and expectations) and to legalise its modalities. The decision makers should consider not only the effectiveness of sanctions, but also their lawfulness. A framework for sanctions regulation should embody: – The competence of the authority entitled to take sanctions; – The content of sanctions;

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– Their limit, which may be fixed having recourse to the principles of other branches of law, for instance humanitarian law (necessity, proportionality; limited and precise economic sanctions hitting the élite in power and not the general population; the question of ‘collateral damages’ produced by targeted sanctions); – Respect for human rights; – Judicial remedies for persons and entities subject to sanctions, since administrative mechanisms, such as sanctions committees, are not enough; – Special clauses exempting countries facing particular difficulties (a mechanism like Article 50 of the un Charter); – A mechanism aimed at reviewing commercial treaties and contracts impacted upon by sanctions, which should have a complementary character in relation to the mechanisms in force between the parties involved; – The effects that that the implementation of sanctions or lack of them may produce on other international bodies, for instance orders and judgments of the icc, including the failure to adopt sanctions against individuals in case of non-compliance with an arrest warrant; – Constant review and termination of sanctions as soon as the political situation is restored in conformity with the un Charter. – The impact of sanctions termination on countermeasures (i.e. if States are allowed to continue to carry out countermeasures, notwithstanding the termination of sanctions). As far as countermeasures are concerned, their regulation is already contained in the ilc Draft Articles on State Responsibility (Articles 49–53), which foresee the regulation of all relevant aspects of countermeasures: objects and limits; obligations not affected; proportionality; conditions to resort to countermeasures and their termination. However those Articles relate to bilateral countermeasures and do not involve countermeasures taken in the interest of the international community in case of violation of erga omnes obligations. The point is covered by Articles 54 of the ilc Draft which is a mere saving clause. Countermeasures taken for protecting collective interests are more closely aligned to sanctions adopted by the Security Council and this explains why it was only possible to draft a very cautious clause. The main difference with sanctions taken by the Security Council is that collective countermeasures are a response to a violation of erga omnes obligations and cannot be resorted to only for a situation involving a political interest and not a serious breach of an obligation toward the international community as a whole. The modalities of collective countermeasures need to be regulated. The Institute of International Law in its Resolution adopted at the Krakow (2006) meeting affirmed that

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collective countermeasures should be subject to the same conditions as bilateral countermeasures. The same reasoning may be applied, mutatis mutandis, for countermeasures taken by regional international organizations, since in most cases the regional organization is not directly affected by the wrongful act, but is intervening for protecting the interests of the international community. The best example is offered by the eu practice that shows restrictive measures taken independently from a Security Council Resolution as well as measures additional to those indicated in a Security Council Resolution and thus challenging the opinion according to which action by the Security Council precludes States and other entities from acting autonomously on the matter. In conclusion, the subject of sanctions and countermeasures has become an important tool for law enforcement as the impressive practice both of States and international organizations demonstrate. The Security Council is also resorting more and more frequently to sanctions. The subject needs further elaboration, notwithstanding the flourishing literature and the fact that the international community has begun to regulate it. The task of legally regulating the practices of sanctions and countermeasures warrants completion by the international community.

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2

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Index Bosnian Serbs African Union 5, 10, 16, 138 sanctions against Bosnian Serbs 151–154, Aliens 159, 290 treatment of aliens 38 See also non-state actors See also expropriation; nationalization Bribery 54 Al-Qaida Burma see Myanmar sanctions against Al-Qaida 73, 102, 127, 130, 133, 153–159, 168, 173, 177–178, 188, Cease-fire 148–149, 215, 271, 278 236, 261, 290 See also European Union; non-state actors; Central African Republic sanctions against nsas in car 154, terrorism; United Nations 229–230, 233–234, 236–238, 240 Angola See also International Criminal Court; sanctions against unita 132, 148–151, United Nations 154, 159, 166, 290 China 18, 131, 245, 257–258 See also non-state actors sanctions against China 80, 114, 118, Arab Spring 246, 260 246–247, 254, 258, 262–264, 268, 273 Armed conflict 10, 26, 134, 136, 151–152, See also arms; European Union; extrater194–197, 199, 202, 272 ritoriality; United States See also international humanitarian law; Civil war see war United Nations; use of force; war Climate change 137 Arms 40 Coercion 125, 144, 252 arms proliferation vii, 25–26, 48, 73, 137, coercive diplomacy see diplomacy 173, 190–192, 198, 200, 204, 206, 255, 275, economic coercion 2–6, 8–9, 14–15, 27, 288–289 31, 42, 139, 190–191, 193–199, 201–202, missile 2, 21, 55, 61, 275 205–206, 270–286 prohibition of arms trade (arms embargoes)  military coercion 1, 4–6, 8, 31 16, 36, 80, 83–84, 100, 129, 131, 145, 156–157, political coercion 3, 8, 31 171, 246, 254, 257–260, 264, 266–267, 269, Cold War 128, 132, 148, 195, 247, 253, 274, 288 273, 275, 280–281 Communication 59 weapons of mass destruction 2, 10, interruption of communications 9, 27, 25–26, 190–191, 273, 275, 284–285 33, 38–39, 287 See also China; Indonesia; Iran; North Korea See also Internet Comoros Islands Belarus targeted measures on the Comoros sanctions against Belarus 36, 73, 247, Islands 260, 269 257, 265–267 Contracts sanctions against nsas 134, 262 bona fides clause 220 Bilateral investment treaties 38–40, damage compensation 219–220, 226 207–213, 215, 289 force majeure doctrine 219, 221–222, 225 arbitration clause 31–32, 210, 215 frustration of contract 217–220, 226 See also friendship, commerce and impact of sanctions’ regimes on contracts  navigation treaties; human rights; treaties 40, 207–208, 216–227, 287, 289, 292 Bosnia and Herzegovina 41, 76 inter-State contracts 40, 287 sanctions on targets in Bosnia and private transborder contracts 40–41, 287 Herzegovina 254 termination 219–220, 224–225 territorial settlement 152–153

308 Conspiracy 55 Corruption 3, 283 Côte d’Ivoire sanctions against nsas 134, 154, 229–230, 232–233, 237–238, 239 See also International Criminal Court; United Nations Council of Europe 174 See also Human rights Countermeasures 33 limits to countermeasures 1, 6, 12, 24, 26–28, 32, 139, 289, 291–293 relationship with sanctions vii, 1, 9–15, 17–22, 28–32, 34–37, 39–41, 70, 74–76, 99, 107, 127–128, 138–140, 144, 158–159, 190–191, 194, 200–201, 213, 216, 287–293 Crimea see Ukraine Criminal sanctions 61, 63, 88–91,100–101, 107, 128, 138, 143, 224 See also enforcement; European Union; United States csce 3, 6 Cuba 209 sanctions against Cuba 11, 16, 24, 42, 53, 67–68, 80, 107, 114, 117–122, 124, 129, 139, 143, 159, 259 See also European Union; extraterritoriality; Organizations of American States; United States Customs Unions 104 Cyber attack 2 See also use of force De-listing see United Nations Democracy 49, 73, 86, 128, 183, 255–256 democratisation 48, 134, 137–139, 171, 173 Democratic Republic of Congo 242 sanctions against nsas 134, 136, 154, 229–230, 232, 237–238, 239, 260 See also International Criminal Court; United Nations Diplomacy sanctions diplomacy vii, 1–32, 41, 70, 271, 273, 277–280, 287–288 See also coercion; Russia Diplomatic and consular relations measures severing the diplomatic and consular relations 9, 33, 39 Discrimination (principle of) 196–197

Index See also international humanitarian law Diseases 136–138 Dispute-settlement 8, 12, 31, 36, 203, 210 good offices 3 judicial or arbitral settlement 4, 186, 210, 289 mediation 3, 278 See also bilateral investment treaties; friendship, commerce and navigation treaties; United Nations; World Trade Organization Dominican Republic sanctions imposed against the Dominican Republic 16 ecowas 16 Effectiveness of sanctions, see enforcement; implementation of sanctions; usefulness of sanctions Egypt 209 sanctions on targets in Egypt 254, 260, 264, 268 Elections 131, 137, 153, 164, 262–264, 267 Enforcement 43–70, 91–92, 94, 100–101, 110, 128, 143–144, 149, 239–241–242, 245, 293 See also implementation of sanctions Erga omnes obligations 29, 32, 40, 70, 75–76, 99, 105, 288, 291–292 See also countermeasures; international responsibility Eritrea sanctions against nsas 154, 241 European Union 67, 116, 118, 138, 152, 222 candidate countries 76–79, 99–100 Common and Foreign Security Policy 11, 48, 71–72, 78–80, 82–83, 85, 89, 95, 100, 211, 253 constructive abstention 82–83, 100 common/internal market 85, 253 eu acquis 78, 100 eu Charter of fundamental rights 86, 97, 183 eu commercial policy 84 eu competition law 121 Euro-crimes 90 European Economic Area 76, 78, 99 European neighbourhood policy 77–78, 99 potential candidate countries 76, 99

309

Index primacy of eu law 212 sanctions policy of the eu vii, 11, 18–21, 24, 34, 44, 48, 57, 61–62, 70–102, 105, 119, 127–128, 132–133, 141, 158, 176, 180, 183, 198, 200, 205–208, 211–212, 215, 223, 226–227, 246–272, 277–283, 285–286, 287–290, 293 decision-making process 81–82, 85–87, 100 implementation of un sanctions  19–20, 34, 73–74, 81, 97, 101, 156–157, 173, 176, 184, 211–212 interaction with international law and the un Charter 70, 73–76, 99, 173,  175–176, 181, 183–184, 188, 293 judicial scrutiny on eu sanctions 22, 94–99, 101, 138, 173–178, 180–181, 184, 188, 206, 227, 289 legal bases 76, 80–81, 85–87, 91, 100, 141, 253–254 role of Member States 48, 70, 72, 81–84, 87–95, 100–101, 254 See also countermeasures; human rights; judicial review of sanctions; Russia; Switzerland; treaties; United Nations; United States; usefulness of sanctions Exclusive economic zone 284 Expropriation 120–122, 139, 208–210 See also nationalization Extraterritoriality control criterion 107, 111–118 effects criterion 107, 111, 119–123 extra-territorial application of sanctions  18, 42, 62–63, 79–80, 103–126, 259, 290 extra-territorial human rights obligations 201–202 See also European Union; Institute of International Law; jurisdiction; United States

Foreign fighters 174 Forgery 54 Fraud 54–55, 64 Free movement of persons measures affecting the free movement  33, 39, 74, 84, 92, 100, 120, 129–131, 147, 149, 153–154, 156–157, 171, 173–174, 230–231, 235–238, 245, 254, 257, 259, 264, 273, 278, 280, 287, 291 visa bans 39, 74, 84, 120 visa requirements 39, 74, 84 See also European Union Friendship, commerce and navigation treaties 32, 36, 38, 207–213, 215, 289 arbitration clause 215 See also bilateral investment treaties; treaties G8 280 Genocide 183, 234, 256 prohibition of genocide 28 See also international crimes Guatemala, sanctions against Guatemala 80 See also European Union Guinea-Bissau sanctions against nsas 154, 236, 254

Haiti sanctions against the Haitian junta 129, 131, 140 High seas 16 Human rights 3, 10, 26–27, 32, 34, 230, 232, 235, 237, 245 due diligence obligations 140 European Court of Human Rights 41, 142, 173–174, 176–180, 182, 184, 187, 201, 289 impact of sanctions’ regimes on human rights 1, 10, 14, 38, 40–41, 86, 96, 129,   138–140, 142, 140, 142, 147, 158, 161–162,   167–191, 194–195, 201–206, 254, 290–292 sanctions to counter human rights Famine 28, 137, 287 violations 10, 21, 28, 48, 52, 73, 77, 115, 128, Financial transactions   130, 133–134, 137–139, 154, 255–256, 258, sanctions related to financial transactions    261, 264, 267, 269, 273, 277 37–38, 47, 53, 55, 57, 61–62, 71, 84–85, See also European Union; extraterritoriality; 92, 129, 143, 147, 153, 155–157, 167, genocide; international crimes; 190–206, 224, 252, 260, 266, 272, 278, International Criminal Court; judicial 280, 282, 286–287, 291 review of sanctions; jurisdiction; treaties; See also International Monetary Fund United Nations Forced displacement 136

310 Humanitarian exceptions to sanctions 140, 149, 153, 155, 165–167, 177, 254 Humanitarian law see international humanitarian law Immunity Immunity of eu staff 267 immunity of States 21–22, 172 immunity of States officials 172 Implementation of sanctions 16, 19, 25, 31, 34, 43–70, 72–73, 76–77, 83–94, 97, 100–101, 105, 114, 128, 141, 144–148, 161, 166, 169, 173–176, 179–181, 183–184, 187–189, 231, 254, 286, 289, 291–292 internal compliance programs 59–60 See also enforcement; European Union; Switzerland; United Nations Inadimplenti non est adimpendum see treaties Indonesia arms embargo on Indonesia 269 Innocent passage (right to) 38 See also communication, international straits Institute of International Law (Institut de droit international) 32, 124–125, 292–293 Insurgency 137 International crimes 130, 136, 139, 228, 230–235, 237, 239, 241, 245 See also genocide; human rights; International Criminal Court; United Nations International Criminal Court 130, 291 and un Sanctions Committees 230–235, 237–238, 241–242, 244 and un Security Council 154, 228–245 arrest warrants 231–236, 241, 245, 292 fines, forefeiture or reparation orders 239–241, 245 investigations 229–232, 236, 240 protective measures for the purpose of forfeiture 241–244 transfer of persons to or from the icc 236–238, 245 International Criminal Tribunal for Rwanda see United Nations International Criminal Tribunal for the former Yugoslavia see United Nations International humanitarian law 1, 10, 14, 32, 130–131, 137, 151, 154, 178–182, 189,

Index 195–197, 199, 202, 204–205, 230, 232, 235, 237, 245, 290–292 See also international crimes; International Criminal Court International Monetary Fund sanctions and regulatory regimes of imf 37 See also financial transactions International responsibility 11–13, 19–20, 22, 30–32, 74, 99, 107, 128, 131, 201, 213, 288 Draft articles on the responsibility of States for internationally wrongful acts 12, 26–29, 32, 34, 40, 75, 107, 130, 139, 144, 200, 217, 290, 292 Draft articles on the responsibility of International Organizations 17, 75, 290 See also countermeasures; reparations; reprisals International straits right of passage or transit 2 International terrorism 10, 21, 48, 73, 85 counter-terrorism policy/sanctions 101, 136, 139, 142, 147, 153–159, 170–189, 255, 257, 288, 290 definition of international terrorism 148 Rome attack 116 terrorists/terrorist organizations 127, 141, 144, 147, 155, 158–160, 180, 211, 252, 257, 261, 290 Vienna attack 116 See also Al-Qaida; European Union; foreign fighters; Islamic State; non-state actors; United Nations; United States Internet 47, 59 See also communication; cyber attack Investments see bilateral investment treaties Iran nuclear programme vii, 21, 192, 256, 258, 263, 273, 289 sanctions against nsas 101, 143, 154, 206, 241 sanctions against Iran 18, 21, 24, 34, 36, 48, 52–57, 67, 73, 81, 105, 107, 116, 122, 192, 194–195, 198, 200, 205, 246, 258, 260, 263, 266, 268, 273, 289 See also arms; European Union; United Nations; United States

311

Index Iraq invasion by the United States 276 invasion of Kuwait 219–220, 256, 275 operation Desert Storm 205, 275 sanctions against Iraq 18, 36, 129, 132, 159, 195, 205, 219–220, 275 sanctions against nsas 134, 254 Islamic State (self-proclaimed)/isil vii sanctions against the Islamic State 130, 159, 290 Judicial review of sanctions 32, 41, 94–99, 101, 138–139, 146–147, 158, 161, 167, 170–189, 206, 227, 289, 292 See also bilateral investment treaties; European Union; human rights; United Nations; United States Jurisdiction 4, 6, 41–43, 45, 47–48, 50–52, 56, 58–60, 63, 66–68, 79, 103, 107, 110–113, 121, 124, 143–144, 193, 279 doctrine of jurisdiction 109, 111 See also extraterritoriality; immunity Jus cogens 10, 181, 183, 211 League of Arab States 10, 16 Lebanon sanctions against nsas 134, 154 Liberia sanctions against nsas 154 Listing see United Nations Libya vii, 186, 209, 227, 229, 242–243 sanctions against individuals from the Libyan regime 82, 130–131, 223, 230,   232–233, 236, 238, 240–241, 243 sanctions against Libya 16, 24, 36, 52, 116, 122, 212 sanctions against nsas in Libya 130, 134, 154, 254 See also European Union; extraterritoriality; International Criminal Court; United Nations; United States Maritime interdiction 16 Moldova 77 sanctions imposed for the situation in Transnistria 73, 84, 247, 254, 259–260 Money laundering 54–55, 64 Multinational companies 62, 125, 217, 226 Myanmar

sanctions against Burma/Myanmar 116, 224, 258, 265–266 sanctions against nsas 134, 254, 261, 269 nato 270, 280, 283–286 See also Russia Natural disasters 137 Nationalization 209–210 See also expropration Necessity (principle of) 197–198, 292 See also international humanitarian law Nicaragua 2, 6–8, 32, 36, 41, 193 sanctions against Nicaragua 116 See also extraterritoriality; United States Nigeria arms embargo on Nigeria 260 Non-intervention (principle of) 1, 3–9, 41, 124, 128, 139, 197–198 Non-refoulement (principle of) 39, 148 Non-state actors 9 definition of nsas 127 sanctions imposed against nsas 85, 127–160, 161, 167, 290 See also Al-Qaida; European Union; Islamic State (self-proclaimed); United Nations; United States North Korea sanctions against nsas 134, 154, 241 sanctions against North Korea 61, 114, 134, 192, 205, 273 See also arms; extraterritoriality; United Nations; United States Nuclear non-proliferation, see arms; Iran; North Korea; Russia Oil embargo/restrictions 11, 14–15, 35, 119, 200, 217, 252, 255, 260, 266, 275, 281 Organisation for Economic Co-operation and Development 118 Organization for Security and Co-operation in Europe 77, 278 Organization of American States 2–3, 5, 10, 16, 138 Palestinian Authority sanctions against the Palestinian Authority 80 See also European Union

312 Pakistan 209 sanctions against Pakistan 80 See also European Union Peace agreements 148–151, 153 Peremptory norms of international law see jus cogens Peru sanctions against Peru 80 See also European Union Private international law 109 Private property 38, 40–41, 111, 121–122, 125, 129, 134, 152–153, 155–157, 174, 218, 239, 242–244 See also expropriation; human rights; nationalization Proportionality (principle of) 19, 26–27, 40, 174, 195–197, 204–205, 292 See also human rights; international humanitarian law; international responsibility; judicial review of sanctions Protest 4 Rebels/rebel group 127, 131–132, 137, 141, 267 See also non-state actors Rebus sic stantibus clause see treaties Refugee 39 refugee flows 137 refugee law 174, 178–182, 187, 189, 290–291 See also non-refoulement (principle of) Regional organizations 16–18, 20, 34, 138, 141–142, 159, 176, 200, 288–290, 293 See also African Union; Council of Europe; ecowas; European Union; League of Arab States; nato; Organisation for Economic Co-operation and Development; Organization for Security and Co-operation in Europe; Organization of American States Reparations 29 See also International Criminal Court; international responsibility Reprisals 11, 26, 34, 36 See also countermeasures Retorsion relationship with sanctions 1, 13, 17–19, 27, 31–34, 38–39, 287–288, 290 See also countermeasures

Index Rule of law 73, 134, 139, 162, 169, 179–180, 183, 188 See also human rights Russia 131, 152, 245 military escalation 270–272, 283–286 Russia’s economy 270–272, 281–283, 285–286 sanctions against individuals 88, 92–93, 133, 246, 254, 278, 280 sanctions against Russia vii, 24, 30, 57, 61–62, 73, 78, 80, 83, 85, 216, 224, 246, 257–258, 262, 266, 268–273, 277–283, 285–286, 288–289 See also European Union; Ukraine; United States Self-defence 1, 14–15, 20, 30, 36, 201 See also use of force; United Nations Self-determination (principle of) 139 Serbia 41, 76–79, 100 sanctions against Serbia 80, 159, 254 See also European Union Sierra Leone sanctions against nsas 154 Smart sanctions 10, 73, 85–86, 92, 95, 101, 127–136, 138–139, 144–148, 152–155, 157–158, 162, 166–167, 171–189, 205–206, 211, 216, 225–226, 228–245, 250, 259–260, 261, 273, 287–288, 290–292 See also Al-Qaida; European Union; non-state actors; United Nations; United States Somalia sanctions against nsas 134, 154, 164, 241 sanctions against Somalia 36 South Africa sanctions against South Africa 131, 163 South-Sudan sanctions against nsas 134, 154, 163, 236, 241 Southern Rhodesia sanctions against Southern Rhodesia 10, 20, 132, 162–163, 248 Soviet Union see ussr Sports embargoes 129 Special Court for Sierra Leone 245 Sudan sanctions against nsas 134, 154, 230, 233–235, 237–238, 240

Index sanctions against Sudan 36, 53–54, 107, 116 See also International Criminal Court; United Nations; United States swift 260, 266 Switzerland 142, 173–174 implementation of eu sanctions decisions 76–77, 99 implementation of un sc Resolutions 184 Syria vii sanctions against nsas 133–134, 143, 254, 256–257 sanctions imposed against Syria 36, 52, 73, 77, 246, 260, 265–268 See also civil war; United States Taliban sanctions against Taliban 132–133, 155–157, 173, 236 Targeted killings 147 Targeted sanctions, see smart sanctions Territorial integrity 4, 27–28, 133, 259, 271, 278 See also Iraq; Ukraine; ussr Territorial waters 7, 38 Terrorism 6, 8, 85, 261 See also International terrorism Transnistria see Moldova Travel ban see free movement of persons Treaties conflicts between treaties 10, 21, 142, 150, 155–156, 175–176, 183–189, 199, 207–208, 210–216, 226, 236, 240, 289–290, 292 good faith principle 79, 100 impact of sanctions’ regimes on treaties  10, 22–26, 142, 150, 155–156, 175–176, 179–189, 199, 207–216, 226, 236, 240, 244, 289–290, 292 Inadimplenti non est adimplendum (principle of) 75, 99 interpretation of treaties 36, 185–186, 199, 202 res inter alios acta rule 77, 100 suspension and termination of treaties  211–215, 226 See also bilateral investment treaties; European Union; friendship, commerce

313 and navigation treaties; United Nations; World Trade Organization Tunisia sanctions on targets in Tunisia 254, 260, 264 Turkey 76, 78–79, 100, 110, 193, 201 sanctions imposed against Turkey 80 See also European Union Uganda sanctions against Uganda 115 See also extraterritoriality; United States Ukraine 77, 81, 83, 85, 133–134, 216, 246, 271, 279, 282, 284 annexation of Crimea vii, 24, 62, 88, 258, 270, 273, 277–278, 280–281, 284 mh17 accident 246 sanctions against individuals 134, 254, 264 See also European Union; Russia; United States Ultimatum 2 unita see Angola United Nations European Union and un see European Union ictr 245 icty 151–152, 154, 245, 264–265 un Charter 18–19, 25, 124, 137, 140, 146, 148, 171–172, 178–180, 200, 204, 207, 288 Article 1(1) 202 Article 1(3) 182, 202 Article 2(3) 12 Article 2(4) 2, 4, 14, 193–194 Article 2(7) 4 Article 11 15 Article 24 20, 152, 182, 203 Article 25 34, 141–142, 156, 175–176, 181, 183–184, 188, 202–203 Article 29 163 Article 39 9, 34, 105 Article 41 9, 15–17, 27–28, 31, 34, 76, 130, 152, 163, 198, 287 Article 42 15–16 Article 48 30 Article 50 165, 292 Article 51 14 Article 53 138 Article 55 182

314 United Nations (cont.) Article 56 182 Article 103 10, 21, 142, 150, 156, 175, 181, 184–189, 199, 211–212, 226, 236, 240, 244, 289–290 un Global Counter-terrorism Strategy 178–179 un sanctions policy 1, 15–16, 18–21, 30–31, 34, 61, 70, 73–74, 76, 97, 99, 101, 104–105, 112, 127–133, 137–138, 140–142, 144, 148–159, 171–194, 198–199, 201–205, 207, 225, 228–245, 250, 255, 269, 275, 288–293 human rights concerns see human rights listing and de-listing procedures  101–102, 146–147, 153, 161, 167–170, 177–178, 188, 230, 232–235, 244–245 Ombudsperson 102, 146, 157–158, 168, 170, 177–178, 290 un sanctions committees 61, 144–146, 150–151, 153, 155, 157, 161–170, 177, 230–235, 237–238, 241–242, 244, 290 See also Al-Qaida; arms; European Union; human rights; International Criminal Court; international terrorism; implementation of sanctions; Iraq; judicial review of sanctions; regional organizations; self-defence; use of force United States 152, 186, 209, 227, 245, 263, 267, 269, 285 9/11 127, 147, 155, 257 attacks against us embassies 155 us sanctions policy 11, 16, 18, 20–21, 24, 34, 42, 44, 47–48, 50–57, 62–65, 67–68, 79–80, 93, 105–107, 112–122, 124, 127–129, 132–135, 139, 143–144, 158, 198, 200, 205, 208, 211–212, 215, 259, 270–272, 274, 278, 280, 282, 286, 289–29 European Union position 117–119, 121–122, 126, 259 sanctions against targets in the usa 247, 254, 259, 262 See also extraterritoriality; implementation of sanctions; international terrorism; Russia

Index Use of force 1–9, 14–16, 104, 125, 163, 193–194, 271, 273, 277, 283–286, 287–289 threat of force 1–9, 31, 125, 194, 271, 273, 284–285, 287–288 See also armed conflict; war; coercion; international humanitarian law; self-defence; United Nations Usefulness of sanctions 246–269, 289 see also European Union; United Nations; United States ussr 20 fall of the ussr 117 invasion in Afghanistan 115 sanctions against the ussr 115, 119, 121–122, 274 See also extraterritoriality; Russia; United States Uzbekistan sanctions against Uzbekistan 247, 260, 262 Venezuela 3 sanctions against nsas 135 Vietnam sanctions against Vietnam 114 See also extraterritoriality; United States Violation of sanctions, see enforcement; implementation of sanctions War 24–26, 113, 197 civil war 9, 137, 265, 268 See also armed conflict; international humanitarian law; Iraq; World War ii; Yugoslavia Western Balkans sanctions against nsas 134 World Bank 282 World Trade Organization 107, 289 Dispute Settlement Body/ Understanding 24, 36, 126 gats 23–24, 33, 37 gatt 2, 37 interaction with sanctions 23–25, 30, 33, 35–36 most favoured nation clause 2, 35, 37 trips 23–24 See also dispute-settlement; treaties World War ii 112

315

Index Yemen, sanctions against nsas 134, 154, 164, 236, 241 Yugoslavia, sanctions against the former Yugoslavia 18, 129, 221, 246, 268 Yugoslav wars 286 See also European Union; United Nations

Zimbabwe sanctions against individuals and regime elites 131, 133–134, 247, 254, 262–264 suspension of eu funds 266 See also European Union