Sanctions Law

Richard Gordon Gordon, Michael Smyth, Tom Cornell

• Publisher: Hart Publishing
• Year: 2019
• ISBN:
  9781509900138
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

This book creates a user-friendly, accessible guide to the complex area of sanctions law. In particular, the book examines how sanctions restrictions work in practice, and what the implications are for multinational businesses operating across numerous sanctions regimes. To this extent, the book considers the interrelationship between sanctions at the supranational and national levels, including the impact of the far-reaching US sanctions regime. The book's aim is not to provide an exhaustive list of sanctions regulations, but rather a framework for engaging with the relevant legislation and the main issues arising therefrom. Reinforcing this practical and commercially-focused approach, each chapter is written in a format that enables easy reading and rapid assimilation. Where there are relevant materials, be they legislative or case-law, these are outlined at the start of each chapter. In addition, the chapters dealing with challenges to sanctions designations each include a section with key principles, providing the clearest possible treatment of the subject.

PART I

Sanctions Regimes and How They Work

1

UN Sanctions

Introduction

1.1The United Nations (UN) was created immediately after the Second World War, in October 1945, with the aim of ushering in a new era of peaceful cooperation between sovereign states. The UN’s constituent treaty is the Charter of the United Nations (the Charter), and all Member States are bound by its provisions (see paragraph 1.10 below on the international law obligations imposed by the Charter).

1.2The UN’s primary mandate is peacekeeping,¹ and it is with a view to achieving this goal that the UN Security Council is granted its significant powers under Chapter VII of the Charter. Among these powers is the ability to impose measures not involving the use of force under Article 41 of the Charter. Sanctions measures, which range from comprehensive trade embargoes to individualised asset freezes, are generally understood to fall within the concept of measures not involving the use of armed force. Article 41 states as follows:

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.

1.3The aim of UN sanctions measures is not always made explicit, and indeed commentators have stressed that the objectives can be many and varied, depending in particular on the sanctions regime in question and the Member States driving forward the necessary decision-making.² However, it would appear that one of the principal objectives is almost always to bring some form of pressure to bear on political regimes or non-state actors without resorting to the use of force. According to Security Council Report,³ the more specific objectives pursued by UN sanctions regimes implemented to date can be divided into the following broad categories: (i) conflict resolution; (ii) non-proliferation; (iii) counter-terrorism; (iv) democratisation; and (v) the protection of civilians.⁴

1.4Sanctions have always been a part of the Security Council’s armoury under Chapter VII of the Charter. However, between 1945 and the end of the Cold War in 1989, the use of sanctions at the UN level was extremely limited, mainly owing to the Security Council’s inability to agree on the necessary resolutions. The situation changed dramatically in 1990, and since then the UN has been a prolific creator of sanctions regimes (see paragraphs 1.64–1.75 below for a brief history of UN sanctions from 1945 to 2018).

1.5Perhaps the key change in UN sanctions policy in recent years has been the move towards targeted or ‘smart’ measures. This process, also referred to as the ‘individualization of sanctions’,⁵ occurred around the turn of the twenty-first century in response to serious concerns that more generalised sanctions, including comprehensive trade embargoes, were having a disproportionate impact on the civilian populations of sanctioned countries. Broadly speaking, targeted measures work by reference to a list of designated individuals. These individuals are selected on the basis of their association with the state or group targeted by the sanctions regime. Once an individual has been ‘designated’ or ‘listed’, he or she will usually be subject to measures including asset freezes and travel bans.

The Legal Basis of UN Sanctions

UN Sanctions in International Law

1.6As a multilateral treaty ratified by 193 states, the Charter is one of the key sources of international law. The Preamble to the Charter states that a central goal of the UN is to ‘establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained’.⁶ The Charter also provides, pursuant to Article 103, that a UN Member State’s obligations under the Charter take precedence over any obligations under separate international treaties. As will be seen, the prima facie supremacy of UN obligations vis-a-vis other international obligations is of crucial importance when it comes to the implementation of UN sanctions regimes by Member States.

1.7Sanctions regimes at the UN level are created by resolution of the Security Council, the latter being one of the UN’s principal organs.⁷ The Security Council is charged with the maintenance of international peace and security,⁸ and in pursuit of its mandate may make use of the powers set out in Chapters VI, VII, VIII and XII of the Charter.⁹

1.8Sanctions regimes are created under Chapter VII of the Charter, which deals with ‘threats to the peace, breaches of the peace, and acts of aggression’. In particular, Article 41 of the Charter empowers the Security Council to implement mandatory measures not involving the use of armed force, which may include ‘the complete or partial interruption of economic relations’. However, most sanctions resolutions do not refer to Article 41 specifically, and merely indicate that they have been passed under Chapter VII of the Charter.¹⁰

1.9Action taken under Chapter VII requires the prior determination by the Security Council of a ‘threat to the peace, breach of the peace, or act of aggression’ under Article 39 of the Charter. The ambiguity inherent in the phrase ‘threat to the peace’ has led to some debate regarding the particular situations in relation to which the Security Council may take coercive measures. However, in practice it is generally accepted that Security Council resolutions under Chapter VII contain an implied Article 39 determination, even though most resolutions passed under Article 41 do not refer explicitly to Article 39.¹¹

1.10Importantly for the purpose of sanctions regimes, Article 41 also provides that the Security Council may call upon Member States to apply any measures adopted. In this regard, Article 25 of the Charter states that Member States must agree to accept and carry out all decisions of the Security Council. The binding nature of Security Council resolutions has been confirmed by the International Court of Justice (ICJ).¹² The Security Council may therefore impose binding obligations on Member States. Moreover, to the extent that these obligations conflict with obligations under other international treaties, Article 103 of the Charter provides that the obligations imposed by the Charter (including by Security Council resolution) will take precedence.

1.11Although a small minority of commentators have argued that the Security Council is ‘unbound by law’,¹³ there is now general agreement for the proposition that there are in fact limits to the Security Council’s decision-making power,¹⁴ albeit that these limits remain ill-defined as a result of the absence of any judicial review mechanism at the UN level.¹⁵ The impossibility of directly challenging UN decisions in a specially-designated judicial forum has for many years been at the centre of the debate regarding UN sanctions measures. This was one of the key issues identified in the Kadi I¹⁶ case before the European Court of Justice (ECJ).¹⁷

1.12In any event, it is worth briefly touching upon the most widely discussed limits to the Security Council’s power to impose sanctions under Article 41 of the Charter. These can be divided into three broad arguments: (i) the legality of the sanctions measures by reference to the Charter (the ultra vires argument); (ii) the legality of the sanctions measures by reference to jus cogens norms of customary international law (the jus cogens argument); and (iii) the legality of the sanctions measures by reference to the state responsibility regime on countermeasures (the countermeasures argument).

1.13First, the Security Council must act in compliance with the provisions of the Charter itself, including in particular the Purposes and Principles of the UN.¹⁸ The Purposes of the UN include, for example, the promotion and encouragement of respect for human rights and fundamental freedoms.¹⁹ Some commentators have argued that a Security Council resolution would therefore be ultra vires the Charter if by that resolution the Security Council was acting in breach of internationally-recognised human rights obligations, including certain procedural rights.²⁰ However, others take the view that, generally speaking, Security Council resolutions supersede human rights obligations in international law, at least to the extent that the relevant human rights obligations do not constitute jus cogens norms (see paragraph 1.14 below).²¹ In any event, the absence of an obvious judicial forum for the review of Security Council resolutions, as well as the wide discretion enjoyed by the Security Council in making decisions generally, means that this particular line of argument is at present confined to the realm of the purely theoretical.²²

1.14Secondly, the Security Council must r...