Sanctions - A Simple Introduction.

Today’s blog introduces  three core domains related to sanctions and one of several primers to the world of Global Sanctions.

Sanctions are one the of many tools used by nations wishing to curb unlawful or adverse behaviours, with the aim of controlling and managing activities  taken by certain high-risk individuals, groups or countries.

A sanction, when imposed, aims to act as a penalty; introducing difficulty or hardship as well as to persuade / nudge the recipient to adjust their conduct or behaviour.

A Sanction, whilst an effective tool, does not always achieve the desired outcome or  behavioural change. However, it acts as a strong deterrent and message prior to any further steps taken.

Sanctions can be viewed through three inter-related domains; types, issuing entities and recipients / targets for sanctions. These three domains are further discussed below.

The three domains of Sanctions

Types

Sanctions can easily be classified / grouped into certain ‘types’, each type serving  to address and focus on a specific area or pattern of action. 

Often a single type of action may not achieve the desired outcome. Hence, a mix of sanction type may be used subject to the severity of the impact.

Sanction types are exhaustive, however the most common types are listed and discussed below;

• Diplomatic sanctions can involve an individual country or a group of countries collaborating to reduce or sever diplomatic ties with a target country which could involve recalling or expelling diplomats.
  
  Diplomatic sanctions aim to create political isolation, thus attempting to pressure change by limiting the target's international engagements.
  
  
• Military sanctions involve embargoes on a target Country’s supplies with the overarching aim to  cut off the procurement or transfer of military items, including, the provision of technical assistance, financial support and brokering services for target countries .

• Economic restrictions are the most common form of sanction, often used by states to achieve a desired outcome or address an aspect of a political foreign policy.

Examples of economic sanctions include; withdrawal of funding, freezing of assets or accounts, removal of licences and the withdrawal of general trade and financial relations.

Economic sanctions, in essence, prohibit commercial activity in relation to an entire country, they may also be ‘targeted’ thus blocking transactions by and with particular businesses, groups, or individuals.

• Environmental sanctions are often the result of civil proceedings for businesses and individuals who fail to comply with environmental regulations e.g. air, water, land and soil.
• Sports sanctions, as the name suggests, refers to restrictions relating to sporting events.

• There are several Other tools that can be employed, for example travel bans, which are often target-specific.

Each of the above ‘types’ address a specific focal target action e.g. military sanctions focus on military equipment, whereas sports sanctions relate to sporting events. 

Often a single type of sanction may not achieve the desired outcome, thus often combined with additional types of sanctions to achieve the desired outcome.

Sanction Types

Issuing Entities

An Entity can be anyone, thing or group with the authority to issue a certain sanction. However the entity must have ‘teeth’  to achieve the desired outcome with the ability to  disrupt or impact a target.

An entity, realistically, can implement a sanction and or can be the potential recipient of a sanction. Most entities are independent ,distinct and usually have a specific mandate. Below are some examples of entities are, but this not an exhaustive list:

·     Companies can implement internal sanctions where they can choose who they wish to trade with for either political, social and economic reasons, or in some cases  brand protection. These sanctions can be against individuals, trading partners or organisations .

• Trade Associations are bodies formed to  represent the commercial interests of its members who agree to an association of undertakings to support other members.

• Institutions are normally government agencies which perform a specific function e.g. Central Bank or Information Commissioner and are empowered to invoke sanctions for their domain of interest.

• Countries – Individual Countries often impose sanctions requesting trading partners to adhere to their ‘wishes’. They are often reciprocal, an example being where the USA imposed sanctions on Iran which in return imposed sanctions on US citizens and companies.

•  Economic Unions – Often countries, close  in proximity, enter into a process of  economic integration, enabling free movement of labour, capital, goods and services. This unified approach to trade and general cooperation. Examples of Economic Unions are ;
• The Commonwealth of Independent States, abbreviated to CIS, was established at the end of 1991as an association of Eleven States: Armenia, Kazakhstan,  Azerbaijan,  Moldova, Belarus, Russian Federation, Uzbekistan, the Kyrgyz Republic and Tajikistan,
• East African Community , abbreviated to EAC, is currently made up of Eight States: the Democratic Republic of Congo, the Republics of Burundi, Kenya, Rwanda, Somalia, South Sudan, Uganda, and Tanzania
• The European Union, abbreviated to EU, is both an economic and political union of European countries. The EU was established on 1 November 1993 by the Treaty on European Union (Maastricht Treaty).
• The United Nations (UN) through the Security Council take action to maintain or restore international peace under Chapter VII of the UN  Charter. Sanctions measures, under Article 41, encompass a broad range of enforcement options that do not involve the use of military actions.

Recipients / Targets

As the name suggests, recipients are the targets of sanctions. Typical targets are , but not limited to, the following;

• Individuals -  often sanctioned for many reasons. The most common reason centres on criticism of a government. A recent example is the US administrations sanction on the Italy-born UN Human Rights Council special rapporteur Francesca Albanese.^[1]

• Clients -  can be sanctioned by a single / multiple firms for several reasons with the most common being where the client has acted in bad faith.

• Groups prescribed as bad actors or acting against the state can be sanctioned to force a change or stop bad behaviours. A recent example in the UK, at the time of writing,  is the ban on the white supremacist Maniacs Murder Cult (MMC), a neo-Nazi organisation that  supplies online instructional material for terror attacks and poses a threat to the UK interests.  

• Companies or Beneficial owners can be recipients of sanctions for several reasons ranging from misconduct, market manipulation or regulatory policy violations.

• States can and are often sanctioned by other states for various reasons. Often these sanctions are reciprocated.

• Regions are similar to states and as states, become the recipients of sanctions when a country or international body implements restrictive measures.

To sum up, an entity can impose one or many sanction types on a recipient as depicted below

Sanction - types and relationships

As a final note, it should be stressed that in most cases, a failure to comply with a sanction may result in financial penalties, loss of trade licences and in the worst case scenario, criminal prosecution. Hence businesses are obliged to be cognisant of  and compliant with sanctions and demonstrate adequate processes and controls are in place

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[1] See : https://www.state.gov/releases/office-of-the-spokesperson/2025/07/sanctioning-lawfare-that-targets-u-s-and-israeli-persons/ - Link valid as of 03/09/25

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