Economic sanctions have emerged as a dominant geopolitical tool in the international legal and political landscape. Once regarded as a supplementary mechanism to diplomacy or armed conflict, sanctions today serve as potent instruments of foreign policy, often leveraged by powerful states or blocs to achieve strategic ends without formal declarations of war. These sanctions increasingly extend beyond military or security objectives into the domain of global trade, effectively transforming into what scholars have called "trade weapons". This article examines the use of economic sanctions in the context of international law, particularly under the frameworks governing international trade and sovereignty.
The central question is whether sanctions, especially unilateral sanctions, comply with or challenge the foundational principles of international law. Recent instances, such as the U.S. sanctions on Iran and Russia, offer a relevant lens to understand how sanctions function as quasi-legal instruments with significant extraterritorial effects, economic consequences, and normative tensions. This article critically evaluates the legal basis of sanctions under the UN Charter, the WTO regime, customary international law, and broader principles such as non- intervention and sovereign equality.
What Are Sanctions and Who Regulates Them?
Sanctions refer to coercive measures adopted by states or international organizations to influence the behaviour of other states, entities, or individuals. They may include trade embargoes, asset freezes, travel bans, and restrictions on financial transactions. Legally, sanctions fall into two broad categories:
1.Multilateral sanctions (e.g., UN Security Council sanctions under Chapter VII of the UN Charter); and
2.Unilateral or autonomous sanctions (e.g., U.S. sanctions imposed through domestic legislation).
The UN Charter, particularly Article 41, empowers the Security Council to impose non- military sanctions where there is a threat to international peace and security.? The WTO also regulates trade restrictions through agreements such as GATT 1994 and GATS, which generally prohibit quantitative restrictions and discriminatory treatment.? Unilateral sanctions, however, often lack direct legal basis under international law. Some states argue their legitimacy derives from countermeasures under the Draft Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA),? although this is contested due to the lack of an authoritative adjudicatory mechanism and growing instances of abuse.
Historical Evolution of Sanctions
Sanctions have existed since antiquity—Greek city-states used embargoes as tools of statecraft—but they gained legal structure post-World War II with the establishment of the UN Charter and later the WTO. During the Cold War, the U.S. and USSR regularly imposed sanctions within their spheres of influence. In the 1990s, comprehensive sanctions like those imposed on Iraq after its invasion of Kuwait provoked criticism for causing disproportionate humanitarian suffering.? This led to the gradual shift toward targeted or "smart" sanctions, focusing on elite individuals and financial instruments rather than entire populations.?
Sanctions as Modern Trade Weapons
In recent years, sanctions have evolved beyond tools of political pressure and now serve as instruments of economic warfare—strategically designed to disrupt trade, investments, and access to global financial systems. This is particularly evident in the cases of Iran and Russia:
U.S. Sanctions on Iran:
The U.S. withdrew from the Joint Comprehensive Plan of Action (JCPOA) in 2018 and re- imposed comprehensive sanctions on Iran, targeting oil exports, financial institutions, and foreign firms trading with Iran.?These secondary sanctions aimed to deter third parties from engaging with Iran by threatening them with exclusion from the U.S. market—a move widely criticised as an extraterritorial application of domestic law.? The EU responded with a Blocking Statute (Regulation 2271/96) to counter the effect of U.S. measures.?
Following the annexation of Crimea in 2014 and more forcefully after the invasion of Ukraine in 2022, the U.S., EU, and allies imposed sweeping sanctions on Russian banks, companies, oligarchs, and the Central Bank of Russia.?9 Key trade sectors like energy, defense, and finance were targeted. These sanctions disrupted SWIFT access, froze foreign reserves, and significantly altered global trade routes.?
These instances show how sanctions are now wielded less as legal responses to breaches of international obligations, and more as geopolitical trade weapons intended to cripple economies.
Critical Legal Analysis
Legality of Unilateral Sanctions
The UN Charter does not authorise individual states to impose coercive economic measures unless under Article 51 (self-defence) or under Chapter VII via the Security Council. Unilateral sanctions thus face legitimacy concerns. The General Assembly has passed resolutions opposing the imposition of unilateral coercive measures, citing violations of sovereignty and the principle of non-intervention.?
Moreover, the WTO law provides limited justification for sanctions, usually under security exceptions (Article XXI of GATT 1994), which states have increasingly invoked.?12 However, the WTO dispute panels have recently begun questioning whether such invocations are self- judging.?13 This introduces significant tension between trade law and geopolitics.
Extraterritoriality and Jurisdiction
The U.S. practice of extraterritorial sanctions (e.g., punishing European firms for trading with Iran) raises serious questions under public international law, especially the principle of prescriptive jurisdiction.?14 Scholars argue that such measures violate state sovereignty and constitute economic coercion, contrary to the Friendly Relations Declaration (1970).?15 The legal foundation for secondary sanctions remains highly contested.
Sanctions and Human Rights
Economic sanctions, especially broad-based ones, have led to unintended humanitarian consequences, affecting access to food, medicine, and essential services. The UN Special Rapporteur on unilateral coercive measures has raised alarms about the compatibility of sanctions with international human rights obligations.?16 Notably, the International Covenant on Economic, Social and Cultural Rights (ICESCR) obliges states to respect the rights to food, health, and development—rights that are often compromised by sanctions regimes.?
Fragmentation and Selective Enforcement
Sanctions regimes are applied unevenly, often reflecting political alliances rather than objective legal standards. While Russia and Iran face harsh sanctions, allies of powerful states—despite comparable human rights records—often escape scrutiny. This selective application undermines the universality and legitimacy of international law, contributing to the perception of a neo-colonial legal order.
Suggestions and the Way Forward
Reinforce multilateralism:
Sanctions regimes are applied unevenly, often reflecting political alliances rather than objective legal standards. While Russia and Iran face harsh sanctions, allies of powerful states—despite comparable human rights records—often escape scrutiny. This selective application undermines the universality and legitimacy of international law, contributing to the perception of a neo-colonial legal order.
Develop a binding treaty on sanctions:
Codifying rules for the imposition, monitoring, and review of sanctions under international law could bring clarity and prevent abuse.
Strengthen WTO dispute settlement:
The WTO needs to clarify the scope of Article XXI exceptions and disincentivise unilateral invocation of security justifications.
Enhance humanitarian safeguards:
States must ensure sanctions regimes comply with international human rights law and include exceptions for humanitarian trade.
Challenge unlawful sanctions legally:
Affected states should increasingly resort to judicial or arbitral forums (e.g., ICJ, WTO, regional courts) to contest illegal coercive measures.
Conclusion
Sanctions, once intended as peacekeeping tools under international law, have morphed into instruments of strategic trade warfare. Their increasing use—often outside multilateral frameworks and in violation of sovereign equality—poses serious challenges to the legal order governing global trade and diplomacy. While sanctions can serve legitimate goals, such as preventing aggression or upholding international law, their misuse risks eroding the very fabric of that law. To preserve the credibility of the international legal system, it is imperative to regulate sanctions more strictly, minimise unilateral abuse, and ensure compatibility with both economic justice and human rights.
