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What Are Sanctions?

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Sanctions are a tool used by countries or international organizations to persuade a particular government or group of governments to change their policy by restricting trade, investment or other commercial activity. For example, sanctions may be applied to countries which develop weapons of mass destruction, violate human rights or trade unfairly. The extent of the sanctions often depends on the severity of the violation.

Types of Sanctions

Trade sanctions are the most common kind and are the least onerous. They could be revocation of preferential treatment such as Most Favored Nation (MFN) status or import quotas against a country not abiding by agreed international rules of trade.

Economic sanctions are punitive in nature and meant to isolate the target. Economic sanctions may include trade embargoes or boycotts, freezing of assets, bans on cash transfers, bans on technology transfer and restrictions on travel. The US Government has placed sanctions against Cuba, North Korea and Iran among other countries.

The Office of Foreign Assets Control ("OFAC") of the Treasury Department administers and enforces economic and trade sanctions based on US foreign policy and national security goals.

The Problem With Sanctions

The impact of sanctions is often felt by poor, innocent civilians and not the intended government officials. A trade embargo is most likely to affect a subsistence farmer who cannot sell his crops for export or a worker in a factory that is unable to receive raw materials. In most cases, sanctions will exclude humanitarian items such as medicines. During the Saddam Hussein regime, US economic sanctions against Iraq were often criticized as hurting the people that the American Government wanted to rise up against Saddam.

Famous Examples of Sanctions

The boycott and near isolation of South Africa because of its former apartheid policy separating the races is a famous example of economic sanctions. US companies divested themselves of South African assets in the 1980s. The UN Security Council has supported economic sanctions against North Korea because of its possession of nuclear weapons. Sanctions are not always economic in nature. President Carter's boycott of the Moscow Olympics in 1980 can be viewed as sanctions in protest against the Soviet Union's invasion of Afghanistan. Currently, the US Government is trying to gather worldwide support for stern economic sanctions against Iran if they fail to cooperate with international inspections of their nuclear program.

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