Economic Sanctions: Quis Custodiet Ipsos Custodes?
Who Will Guard The Guards Themselves?
Who Keeps The Controllers Of Sanctions In Check?
“Sir, when men of action meet, the place of the man of letters is inside his pencase”. Hassan, James Elroy Flecker (p60,1922)
I shall start with a quotation from Carl Von Clausewitz ‘On War’ in which he defines war as: ‘an act of violence intended to compel our opponent to fulfil our will’ (Book I,i,2).
Sun Tzu said: ‘The supreme art of war is to subdue the enemy without fighting’.
Financial blockades, and economic sanctions are therefore an extension of the tools of war, alongside diplomacy, spy craft, and physical war.
Clausewitz argues that the aim of waging war is to locate the enemy’s centre of gravity, the focal point of his strength, and then to devote all available means to attacking it (Book VI, xxvii). He lists three potential centres of gravity namely:
- The enemy’s army.
- The enemy’s capital.
- The army of a stronger ally.
Sanctions Are A Tool Of Economic Statecraft.
As long ago as the 5th century BC, a statesman in Athens ordered a trade ban between Athenian Empire and the Megra for supporting Sparta, thus upholding the authority of Athens (Thucydides, 1972: 118).
Indeed, sanctions were commonly adopted after World War I with a proclamation by Woodrow Wilson, US President at the time, suggesting that the League of Nations adopting sanctions would keep the world free of war, describing sanctions as a ‘peaceful, silent, deadly remedy’.
During the Cold War, imposition of sanctions were unpopular with just two countries sanctioned in that time namely Rhodesia (now Zambia and Zimbabwe) and South Africa.
There then followed financial sanctions, all of which resulted in full War, unless someone wishes to correct me.
In other words, financial sanctions may have financially crippled. or else slowed down, or perhaps just irritated a richer sanctioned State, but it did not prevent war. It did not subdue the enemy to a point of ceasing to wage war. Recent examples being Iraq 1990, Cambodia 1992, Libya 1992, Liberia 1992, Somalia, 1992, Rwanda, 1994, Sudan, 1996, Sierra Leone 1997, and Afghanistan in 1999, amongst others.
Law versus Leverage: Tension Between Sanctions and Human Rights.
So, where in the arena of war, is the tool of economic sanctions upon a proposed enemy, subject to human rights and humanitarian law? It seems that it is a matter of ‘act now (sanction now) and ask questions later’.
What court of law heard a balanced argument in the same way as a Judge would weigh up the granting of an injunction? Where is the right of appeal if you fall under the curfew of a sanction?
They are instead a collective decision by other States; by the international community expressing condemnation of war for example.
The Swedish Ministry for Foreign Affairs 2007 stated:
‘…sanctions are valuable instruments in international efforts to safeguard peace and security and to promote democracy and human rights. They represent coercive measures that supplement supportive measures in the areas of diplomacy and development assistance with the same objectives. Sanctions mean ‘restrictions’, limiting the freedom of a State, a group or its leaders to act.
They are imposed through a collective decision by other Stats. This is done because the international community wants to use peaceful means to influence the behaviour of the State, group or individual through various economic and political measures. They may be employed to change the policies of a State that threatens international peace and security; to defuse a conflict in a country; to induce a State to cease systematic violations of human rights; or to compel a State to adopt certain democratic principles.
Sanctions differ from other foreign policy instruments in that they are regulated through legal provisions. They are precisely formulated and violating them may result in penalties. Sanctions are intended to be of a temporary nature and regularly reviewed in light of developments. When their objectives have been achieved, they are to be removed’.
Collateral Damage or Calculated Consequence?
Who weighs up the civilian suffering and the damage done to international trade when blanket sanctions are imposed upon all and sundry? What of the quiet competitive edge gained by those imposing sanctions on the sanctioned? How is this weighed up when targeting civilians?
In the Watson Institute for International Studies 2004, UNICEF and the World Health Organization amongst others, documented a whole host of humanitarian issues inflicted upon the civilians living in Iraq leading to deterioration of a national health system, shortages of electricity, starvation and malnutrition amongst other concerns reported.
Targeted Sanctions seem more in keeping with Smart—bombs, and a desire to avoid collateral damage, however, can it really be said that punishing an entire nation is fair and proportionate having regard to all the circumstances?
Quis Custodiet, Ipsos Custodet? Who Keeps The Controllers Of Sanctions In Check?
The United Kingdom is a member of the United National’s Security Council and so automatically imposes all financial sanctions created by the UN. The UK Government also creates a number of financial sanctions.
The current Financial Sanctions Notice, referred to by Her Majesty’s Treasury as the Russia Financial Sanctions Regime is embedded in statue under the Sanctions and Anti-Money Laundering Act 2018 (‘the Sanctions Act’), which provides for the freezing of funds and economic resources of certain persons, entities or bodies involved in destabilizing Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine, or obtaining a benefit from or supporting the Government of Russia. The UK is enabled to do so under the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855).
Although under Section 22 of the Sanctions Act an appropriate Minister has the power to vary or revoke designations made under the regulations, we should perhaps be comforted that under section 31 of the Sanctions Act, there is an independent review of regulations with counter-terrorism purpose.
These decisions are also subject to judicial review under Section 38 of the Sanctions Act, however, for reasons of National Security amongst others, sections 66 to 68 of the Counter-Terrorism Act 2008 apply in terms of special advocates etc…given that such proceedings are deemed financial restrictions proceedings.
Variations And Licences For Restricted Services.
In the meantime, here is an example of variations being made to what was understood to be a total freezing of assets and trade issued by the Office of Financial Sanctions Implementation (‘OFSI’) granting licenses for restricted services:
- Allow VTB Capital and its UK subsidiaries to make payments, including for basic needs, reasonable fees or service charges arising from routine holding and maintenance of its frozen funds and economic resources, and reasonable professional fees for the provision of legal services (INT/2022/1280876)
- Allow relevant financial authorities to do anything with regard to VTB Capital and its UK subsidiaries related to prudential supervision, or protecting, maintaining or enhancing the financial stability of the UK (INT/2022/1280976)
These licences take effect from 1 March 2022 and expire on 1 March 2023.
Professor Rosen is a solicitor-advocate and principal of David Rosen & Co. He is a specialist in counter-fraud and counter-corruption in commercial and criminal matters. His other fields of work include divorce and financial matters. David is a member of the Royal United Services Institute, Resolution, and the Society of Legal Scholars amongst others. He is a full academic Professor of Professional Practice at Brunel University where he continues to lecture one day each week.
