Economic Sanctions Under International Law


Under International Law, States and Non-State entities often use economic sanctions as a tool of foreign policy or sometimes, economic warfare. These sanctions are often used against the entities that threaten the interests of a State or Non-State actor or that violate the norms of international behavior. The act of imposing economic sanctions is both criticized as well as supported. Critiques contend that economic sanctions are often poorly conceived by the targeted entity and do not produce the desired results. Whereas, the supporters claim that in recent years the imposition of economic sanctions has been an effective tool in the maintenance of international decorum.


Economic sanctions are one of the measures taken by State and Non-State entities to maintain international peace and security without the use of armed forces. It may be defined as the withdrawal of customary trade and financial relations with a State, organization or individual in the light of foreign policy and international norms. It may be imposed by the United Nations, regional governmental organizations such as European Union or by States acting unilaterally. These sanctions may be comprehensive i.e. prohibiting trade with the entire country/nation or maybe targeted such as blocking transactions with a particular group of individuals, organizations or businesses.

Economic sanctions can take various forms such as travel bans, asset freezes, arms embargoes, foreign aid restrictions, trade restrictions etc. Financial restrictions include the denial of credit, denial of banking services, withdrawal of aid and so on.


International Law consists of a body of rules which determines the relation among nations. These rules have generally evolved through international customs and international agreements. These customs and agreements determine the legality of a State’s conduct with other States in the international forum. One of the most important aspects of foreign relations is economic transactions between different States. Normally, every State looks towards facilitating its economic growth and prosperity. However, sometimes in order to achieve such an objective, certain States resort to the imposition of economic sanctions.

The decentralized structure of International law does not provide an executive body to enforce the rule of conduct nor does it provide a judicial body which can exercise compulsory jurisdiction over the States. In the absence of such authority, the common interest of the States emerges as the primary reason for the adherence to international rules and customs. Such common interest lies in the maintenance of orderly economic transactions.

However, the fact that adherence to these international rules of economic transactions is in the best interest of all the nations does not imply that all States comply with these rules. Such non-compliance may result in a breach of a duty or an agreement. In addition to this, it may also result in a violation of general international law or customs. In such cases, economic sanctions come into the picture.


Under Chapter VII of the UN Charter, the United Nations Security Council can take measures to enforce international peace and security which do not include the use of armed forces. One such measure is the use of economic sanctions as given under Article 39 and Article 41 of the UN Charter.

Article 39 of UN Charter states that “The Security Council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security.”

Article 41 of the UN Charter states that “The Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.”


1. Sanctions by European Union

The Treaty of European Union (TEU) includes restrictive measures such as economic sanctions as an important tool in pursuant of its “Common Foreign and Security Policy (CFSP)”. The EU imposes sanctions as mandated by United Nations Security Council as well as outside and beyond UN mandate. Such economic sanctions are not only targeted towards States as in recent cases such as Iran and Syria but also Non-State entities like anti-terrorist lists, companies connected with the military junta in Myanmar etc. The context under which economic sanctions are imposed ranges from protection of human rights to crisis management and non-proliferation.

2. Unilateral or Autonomous Sanctions

Unilateral or Autonomous Sanctions are imposed by States and International organizations without the authority of UN Security Council. Such sanctions are highly criticized as they appear to violate the principles of International Law. The developing countries argue that such unilateral sanctions should be eliminated as it infringes their right to economic social development.

One such example of unilateral sanctions is the comprehensive trade sanction imposed by the United States on the government of Nicaragua on May 1, 1985. Pursuant to the sanction, President Reagan placed a total embargo on all trade with Nicaragua and suspended service to the United States by Nicaraguan airlines and flag vessels. The termination of all economic interactions by the United States with the government of Nicaragua reflects the general deterioration of relations between the US and Nicaragua governments.


Under Article 2(4) of the United Nations Charter, the use of force is prohibited. However, there is no explicit prohibition on coercive economic sanctions under International Law.

As stated above, compliance with the rules of international law is in the common interest of all the States on the international platform. However, the rules of international law do not bind all States at all times. The rules of international law evolved through the common consent of all the states, but a proposed rule of international law does not bind a nation that has not consented to the rule, either expressly or impliedly. A State may either expressly manifest its consent to a rule through a treaty or a declaration or it may act in such a manner as to imply its consent to a rule of international conduct.

The principle of sovereignty gives effect to State’s ability to independently determine and formulate policies of trade and economics, which should be free from the interference of other nations. Foreign trade, however, by its own nature affects other nations of the international community. One of the natural consequences of international sovereignty is that international legal obligations are binding upon the participant States. The foreign policy of the state, therefore, is subject to the scrutiny of international law.


The main objective of economic sanction is to induce the target State or the Non-State entity to comply with the rules of international law by taking particular actions or to discontinue them in order to eliminate threats to or breach of peace, or acts of aggression. The prospects of such sanctions depend on the extent to which the target authorities are dependent on the nation imposing such sanctions.

Generally, economic sanctions are imposed to exert pressure on the economy of the target state in the hope that the rational considerations will cause the government to take measures in consonance with the rule of international law so as to relieve some pressure on its economy. Unfortunately, this is not always the result wherein the general population of the nation is severely affected, without being able to induce its government to change its course.

Because the imposition of economic sanctions can be proven to be non-effective and because they can inflict undue pressure and pain on the general population and the neighboring states, other sanctions have been coming into use. This includes the imposition of cultural sanctions, wherein in particular athletes of the target country are excluded from international sports competitions.


Unlike other sanctions imposed by individual States or groups of states, whose legality has been in question in recent years, the legal foundations of economic sanctions imposed by the United Nations Security Council under Article 41 of Chapter VII of the UN Charter. Whereas, the legality of unilateral or autonomous sanctions may be subjective to the treaties between the states. However, the political and economic aspects of the target state should be taken into considerations while imposing economic sanctions. While implying these sanctions, one must bear in mind that the benefit sought through these sanctions are proportional to the potential damage to the target state. It must be further born in mind that these sanctions are not indefinite and must not impact the vulnerable population excessively.

This article is authored by Arushi Gupta, Fifth-Year, B.A. LL.B student at DES Law College, Pune University

Also Read – Issues Related To Private International Law

Law Corner

Leave a Comment