International sanctions refer to the restriction or suspension of economic or commercial relations, or other areas such as transport and communications or diplomatic relations, with a particular State or groups of individuals and entities
The purpose of sanctions is, as part of other foreign policy measures, to influence the policies or actions of that State or group when such policies or actions are considered a threat to international peace and security.
These actions include the proliferation of weapons of mass destruction, participation in international terrorism and perpetration of extensive human rights violations.
Sanctions measures include export and import restrictions, financial sanctions and restrictions on admission. In practice, neither the UN nor the EU continues to impose comprehensive embargoes on countries.
The current view is that sanctions targeted at designated persons and entities or specific economic sectors are the most effective means of influencing those responsible for objectionable policies or actions while minimising negative effects on the civilian population.
Targeting of sanctions
The aim is for sanctions to target persons who are responsible for or who support people who are responsible for the policy or actions found to be objectionable, and the sources of funding for such groups, as accurately as possible.
For example, sanctions can target the government of a specific country and other persons or entities affiliated with that government, but they can also be directed at certain groups which are not necessarily affiliated with a specific state.
In addition, sanctions can be imposed to restrict the availability of products, materials or technologies used in the activity being targeted by sanctions. Sanctions are always planned on a case by case basis to meet the specific foreign and security policy requirement, which is why all the sanctions regimes are different.
Import and export restrictions
In principle, sanctions can be used to restrict the export or import of any product or technology. In various cases, export bans have been imposed, for example, on defence materiel, other firearms and ammunitions, dual-use goods, and products required in the nuclear industry, the oil and natural gas industry and the ship-building industry.
Import bans, on the other hand, are usually imposed on products which provide income to the targeted group for funding its activities: these include products such as oil and natural gas, other petrochemical products, and precious metals and stones.
Export of defence materiel
One of the most common types of sanctions is the restriction of weapons and other defence materiel. According to a widely adopted interpretation, goods covered by such restrictions include the products included on the Common Military List of the European Union.
The export of these products from Finland to outside the EU requires export authorisation by the Ministry of Defence of Finland.
Authorisation will not be granted for the export of defence materiel to any country that is subject to arms embargoes, unless grounds for exemption exist for the type of export in question as provided by a UN resolution or a EU Council Decision. Therefore, as an example, the export of defence materiel may exceptionally be permitted to provide materiel to crisis management forces operating on the ground in an embargoed country.
In rarer cases, sanctions can also restrict the import of defence materiel from the targeted State.
Export of firearms intended for civilian use
Sanctions can also be imposed to restrict the commercial export of firearms and ammunitions intended for civilian use. The commercial export, import and transit of firearms and ammunitions intended for civilian use requires authorisation by the National Police Board.
Permits for private import and transfer of firearms are issued by local police authorities.
In addition, the European Firearms Pass system of the European Union controls the import and export of firearms to and from Finland for sports and hunting purposes.
Export of dual-use goods
Dual-use items are goods that are suitable for both civilian use and for military purposes, especially for the development of weapons of mass destruction.
The export of dual-use goods from the EU is controlled by Regulation (EC) No 428/2009 setting up a Community regime on the control of exports, transfer, brokering and transit of dual-use items.
The export of dual-use items is subject to authorisation regardless of whether sanctions apply.
However, sanctions regulations can be adopted to impose more extensive restrictions on the export of dual-use items to certain countries or to totally ban such exports.
In Finland, export authorisations for dual-use items are granted by the Unit for Export Control of the Foreign Ministry. The authorisation procedure is subject to the Act on the Exports of Dual-Use Goods (laki kaksikäyttötuotteiden vientivalvonnasta, 562/1996).
Sanctions restricting the export or import of other products
In principle, EU sanctions regulations can restrict the export or import of any product or technology. For that reason, before exporting products to a country targeted by sanctions, exporters must carefully read the applicable sanctions regulations and their annexes which provide descriptions of restricted or banned products.
Export of services and know-how
When a product becomes the subject of an export ban, the provision of “technical assistance” related to the product is usually banned as well. This covers all information, competence and know-how related to areas such as the manufacture, development and use of sanctioned products.
Providing such knowledge to individuals residing and businesses registered in the sanctioned country, or for any use in that country, is prohibited.
In addition to businesses engaged in the export of technology or services such as consulting services, educational and research institutions must also take restrictions into consideration if they are planning on recruiting students or researchers from a country targeted by sanctions.
Sanctions regulations can also specifically ban the provision of certain types of services to a targeted country.
In addition, the Council Joint Action (2000/401/CFSP) concerning the control of technical assistance related to certain military uses provides for the control of technical assistance (such as advice and training) related to weapons of mass destruction, when such technical assistance is provided to outside of the EU by a person domiciled in the EU
Restrictions in the banking, financial and insurance sector
When an export or import ban is imposed, it usually also covers funding and financial services as well as insurance and reinsurance for the products in question as well as their transportation and other associated services.
The financial and insurance sector may also be subject to specific restrictions; for example, with respect to businesses which are state-owned or operate in a certain industry sector, or with regard to investment and insurance provided for such businesses.
The establishment of new banking relationships with banks of a sanctioned country can also be restricted.
In many cases, sanctions also target specific designated individuals and entities considered responsible for the actions opposed by the sanctions. Assets held in the European Union by designated individuals and entities must be frozen, and any form of commercial activity with them must be refused.
The latter also applies to indirect forms of cooperation, for example in situations where a non-designated entity acts as an intermediary for a designated entity.
For that reason, businesses should usually also refrain from dealing with any subsidiaries of designated entities.
Restrictions on entry into and transit through EU Member States
The EU sanctions regimes regularly include restrictions on admission which are targeted at persons designated in the annex to the sanctions decision. The designated individuals are often the same individuals whose assets are ordered to be frozen by the sanctions regulation.
Authorities will prevent designated individuals from entering the EU, unless specific exceptional grounds for entry exist.
Restrictions on traffic and transport
EU Council decisions can impose various restrictions on traffic between a sanctioned country and the EU. Restrictions are usually related to air traffic.
Possible restrictions include total bans on air traffic in a certain country (as introduced in the case of Libya after the resolution of the UN Security Council) or, for example, banning the landing of cargo planes operated by companies registered in a certain country at airports in the EU (as in the case of Syria).
Restrictions on maritime traffic and transport
The EU Council can also adopt any other restrictions on traffic and transport it deems necessary, as permitted by international conventions. For examples, regulations can be imposed to ban the loading and unloading of cargo to and from vessels which are directly or indirectly controlled by a certain company.
Transport operators may be required to submit advance information to customs officials on arrivals and departures related to trade with sanctioned countries and specify whether the traded goods are subject to sanctions or restrictions.
Technical, refill and maintenance services provided to vessels and aircraft may also be banned, for example, if the service provider has reason to believe that a vessel is carrying cargo that violates regulations.
Legal basis, implementation and legislation
The UN Security Council can impose economic and other sanctions to maintain international peace and security. The Security Council’s authority to impose sanctions is based on Chapter VII of the United Nations Charter. Resolutions adopted under Chapter VII are legally binding on all United Nations member states.
All sanctions imposed by the UN Security Council are implemented in the European Union by EU-level legislation. The EU’s own restrictive measures, so-called autonomous sanctions which are not based on resolutions of the UN Security Council, are adopted by decisions and regulations of the EU Council.
The EU’s authority in sanctions policy is based on the Treaty on European Union and on the Treaty on the Functioning of the European Union.
EU Council regulations are directly applicable in all Member States and as such they are binding on both national authorities and private operators of each country.
In addition, Member States are required to implement national measures to enforce sanctions which are only established by EU Council decisions. These include restrictions on the export of defence materiel and restrictions on admission.
On the national level, the general act on the national enforcement of sanctions is the Act on the Enforcement of Certain Obligations of Finland as a member of the United Nations and of the European Union (laki eräiden Suomelle Yhdistyneiden kansakuntien ja Euroopan unionin jäsenenä kuuluvien velvoitusten täyttämisestä, 659/1967), also known as the Sanctions Act.
According to section 4 of the Sanctions Act, a penalty for the violation or attempted violation of regulatory measures issued by authorities by virtue of [the] Act and for the violation or attempted violation of [EU] Regulations […] is provided in Chapter 46, sections 1 to 3 of the Penal Code (Criminal Code; rikoslaki 39/1889).
Violation of an EU regulation is punishable from the date of the entry into force of the EU regulation in question, i.e. the date of its publication in the Official Journal of the European Union.
However, according to section 2(a) of the Act, information on the entry into force of Regulations […] and on the penalty provisions applicable to the violation of such Regulations shall be given by an Announcement of the Ministry for Foreign Affairs, to be published in the Statute Book of Finland.
- Sanctions Act (in Finnish and Swedish)
According to section 4 of the Sanctions Act, a penalty for the violation or attempted violation of regulatory measures issued by authorities by virtue of [the] Act and for the violation or attempted violation of EU sanctions regulations […] is provided in Chapter 46, sections 1 to 3 of the Penal Code (Criminal Code).
The sections establish as offences regulation offences (section 1) and aggravated regulation offences (section 2) and petty regulation offences (section 3). Section 1(1)(1) on regulation offences applies to the violation or attempted violation of a regulatory provision in the Sanctions Act and section 1(1)(11) applies to the violation or attempted violation of an EU Regulation on restrictive measures (sanctions).
A person committing a regulation offence may also be sentenced to a fine (Chapter 46, section 13 of the Criminal Code).
- Criminal Code (in Finnish and Swedish)
The export of defence materiel is regulated by the Act on the Export of Defence Materiel (laki puolustustarvikkeiden viennistä, 282/2012). Persons who commit a defence supplies export offence are sentenced in accordance with Chapter 46, section 11 of the Criminal Code.
- Act on the Export of Defence Materiel (in Finnish and Swedish)