Link Search Menu Expand Document
Cybersecurity Research

II. Conventional Nation-Wide Sanctions

Nation-wide sanctions are a conventional form of unilateral economic sanctions intended to penalize a nation as a whole for violations by its government.22 Until recently, the fight against terrorism focused on stopping terrorism funding by penalizing government sponsored terrorism, typically by punishing whole nations through limited trade and foreign investment.23 The connection between terrorism and the globalization of economies has led world powers to establish global, political, and economic policies focused on combatting terrorism.24 The policy of using trade as a counter-terrorism measure is based on the theory that the sanction-implementing country will weaken the income and welfare of the target country to an extremely low level.25 As the target country suffers depreciation in its economy, it will

21. Eric J. Lobsinger, Diminishing Borders in Trade and Terrorism: An Examination of Regional Applicability of GATT Article XXI National Security Trade Sanctions, 13 ILSA J. INT’L & COMP. L. 99, 101 (2006) (discussing traditional justifications for sanctions).

22. Id. at 111.

23. *Id. *

24. Id. at 109.

25. Smeets, supra note 2. As indicated by the author a limitation of trade through the protection of individual markets by increasing tariffs or applying direct import restrictions will reduce the general welfare. Hence “[a]n embargo will create a supply shock and a boycott

eventually have little choice but to acquiesce to the objectives of the implementing country.26

The U.S. is the most active player in this arena, making it difficult to imagine U.S. foreign policy without its impositions of nation-wide sanctions.27 Sanctions became an important part of the U.S. foreign policy during the Napoleonic wars in Europe. 28 In the 19th century, the U.S. limited the use of economic sanction to times of serious emergency situations.29 By the turn of the century, technological developments made sanctions methods such as blockades and other economic limitations obsolete.30Nation-wide sanctions have become a common practice in international conflicts between governments to settle international disputes instead of resorting to military action.31 During the World War I and II, the U.S. and the U.K. began implementing sanctions against neutral states and individuals who traded with the enemy.32 After World War II, the U.S. developed a more extensive legal and regulatory system of sanctions and export controls, which have since became an economic warfare instrument.33

Therefore, economic sanctions have long been used to cut off funding to foreign adversaries. In the aftermath of the September 11 attacks on the U.S., the United Nations Security Council adopted Resolution 1373 which applied to all members and required compliance with its International Convention for the Suppression of the Financing of Terrorism.34 Hence , the U.S. as the financial world superpower made specific efforts to cut off funding for terrorist organizations like Al Qaeda and ISIS35 and has invested considerable resources in improving its financial capabilities in the fight against terrorism. The Treasury Department’s intelligence and counter-terrorism

will isolate the target country from the world market. A net welfare loss will be the result. Depending on the relative balance of powers between the countries involved and the importance of their economic interaction (large versus small country), the imposing party can explicitly depress the income and welfare level of the target country to an unacceptably low level. The weaker party will face deteriorating terms of trade and it is expected that it will be forced to comply,” id. at 5.

26. *Id. *

27. Sarah H. Cleveland, Norm Internalization and U.S. Economic Sanctions, 26 YALE J. INT’L L. 1, 4 (2001) (discussing United States’ sanction activity).

28. Sarabeth Egle,* The Learning Curve of Sanctions - Have Three Decades of Sanctions Reform Taught Us Anything?,* 19 CURRENTS INT’L TRADE L.J. 34, 38 (2011) (discussing United States’ stance on unilateral sanctions).

29. See generally Kern Alexander, International Political Economy and Economic Sanctions, in ECONOMIC SANCTIONS 30-54 (2009).

30. Egle, supra note 28, at 38.

31. See Lobsinger, supra note 21, at 111.

32. Egle, supra note 28, at 38.

33. Id.

34. S.C. Res. 1373, supra note 12.

35. Zarate, supra note 14, at v-ix.

units now consist of more than 700 individuals with an annual budget of $200 million to battle increasing numbers of adversaries using various financial weapons of war.36 The most important relevant U.S legislations are the International Emergency Economic Powers Act (IEEPA)37 and the Export Administration Act (EEA).38 These regulations grant wide powers to the President of the U.S. to impose sanctions against hostile nations.39 The EEA has been imposed against South Africa, Iraq, Haiti, Burma, Sudan, Serbia, Montenegro, and the Federal Republic of Yugoslavia.40

Although the primary goal of imposing economic sanctions is to suppress a threat to international peace and security,41 the U.S. has previously used sanctions against nations for different reasons including promoting human rights, urging a regime change, and fighting against narcotics trafficking and terrorism.42 Arguably, if sanctions are imposed due to human rights concerns, severe violations can be seen as a danger of worldwide peace and security.43

Table of Contents