Published online by Cambridge University Press: 06 September 2019
Asset freezes are sometimes viewed as the quintessential form of targeted sanctions—relatively effective in achieving their goals, while affecting only the individuals and companies that are “bad actors.” However, as part of the roundtable “Economic Sanctions and Their Consequences,” this essay argues that there are significant ethical problems raised by asset freezes and other forms of targeted financial sanctions. Sanctioners (specifically, the United Nations Security Council and the U.S. government) have long been criticized for targeting individuals and companies for arbitrary reasons or without adequate due process. However, there is a second concern that is less well known. Asset freezes and other targeted financial sanctions may be imposed on government officials, government agencies, or private companies that hold a critical role in the target country's economy. A country's central bank, national oil company, or national shipping line, for example, may be severely compromised as a result of its inclusion on a financial blacklist. In addition to the explicit prohibitions imposed by targeted financial sanctions, there is a chilling effect as well. This can be seen when international banks and corporations withdraw from the target country altogether because the burden of compliance with these measures is so great, and the potential penalties so high.
The author is grateful to Nick Turner for his helpful comments and suggestions.
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14 Deripaska v. Mnuchin, Complaint for Declaratory and Injunctive Relief, U.S. District Court, District of Columbia, March 15, 2019, p. 15.
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21 Marc J. Bossuyt, “The Adverse Consequences of Economic Sanctions on the Enjoyment of Human Rights” (working paper E/CN.4/Sub.2/2000/33, United Nations Commission on Human Rights, June 21, 2000), p. 10.
22 Article 2, Charter of the United Nations, June 26, 1945, www.un.org/en/sections/un-charter/chapter-i/index.html.
23 Camilo Montoya-Galvez, “Senators Introduce Bill to Send $400 Million in Aid to Venezuela, Strengthen Sanctions,” CBS News, April 3, 2019, www.cbsnews.com/news/venezuela-bill-senators-introduce-legislation-to-send-400-million-in-aid-strengthen-sanctions/.
24 Trump Administration, quoted in Akin Gump Strauss Hauer & Feld LLP, New U.S. Sanctions Regime Targeting Nicaragua (Washington, D.C.: Akin Gump Strauss Hauer & Feld LLP, 2018), p. 2 (emphasis added), www.akingump.com/en/news-insights/new-u-s-sanctions-regime-targeting-nicaragua.html.