Extraterritoriality Sanctions are part of a governing body’s foreign laws and policies. Countries usually impose sanctions on other countries. However, if a country’s governing body is only in charge of its own territory and people, how can it impose laws on areas out of its jurisdiction? This ability is called extraterritoriality- when a government can impose laws on areas outside of its normal areas of jurisdiction.
The Extraterritoriality of Sanctions
In normal cases, Extraterritoriality jurisdiction requires the cooperation of the second country. However, this is not the case with sanctions. Since the OFAC and OFSI view sanctions as punitive, their intent is to penalize the offending country for their actions.
In this case, the country is bound to be un-cooperative. Hence, the OFAC and OFSI utilize extraterritorial jurisdiction to impose sanctions on the country. It is mandatory for all other countries to follow these rules, or they will face penalties as well.
Most sanctions, like those approved by the EU Council or United Nations Security Council, are formed by intergovernmental bodies. This makes them more well-thought-out and reasonable. These organizations impose sanctions in an attempt to restrict wrong-doers from committing heinous acts that may affect International relations and harmony. These sanctions are not exactly punitive in nature. They are rather put in place to help amend relations between conflicting nations.
On the other hand, superpowers like the United States of America and China have begun to impose strict Extraterritoriality sanctions on wrongdoers using their own jurisdiction. They may have good intentions in punishing war, genocide, and other heinous offenses. However, in many cases, these sanctions can end up causing more harm than good.
The Complex International Trade Network
No country in this world is completely independent. Each country relies on other nations for goods and services. This especially includes those which they may be unable to grow or manufacture on their own. The peace and harmony of the world depend on co-dependence and international relations. The international trade network is an intricate web where countries have agreements with each other to import and export specific goods at stipulated prices. Many times, superpower countries impose Extraterritoriality sanctions on an offending country without consulting all the countries involved. This not only affects the sanctioned countries but other third-party countries as well.
How Sanctions can negatively affect uninvolved countries
- For example, Country A and Country B have an agreement within themselves. Country A provides B with petrol at special prices on the condition that B, an agriculture-dominated country provides it with the best quality rice. If Country A happens to commit a war crime, then it is likely that the USA or another superpower may take it upon itself to impose sanctions. The most common of them are trade sanctions, which affect a country’s economy. Due to the newly implemented sanctions, Country B can no longer procure gas from Country A at low prices. It has to find another, a more expensive source at short notice. This drives the price of gas in Country B up quite drastically, which affects the common citizens. Hence, the sanctions on Country A indirectly affect Country B too, by no fault of their own.
On the other hand, if Country B decides to ignore the sanctions and continue trading with A as normal, then they will most likely face heavy repercussions. Either way, it is a lose-lose situation for Country B. Hence, giving too much power to some countries can also negatively impact neutral countries and disrupt their economies as well.
The Concentration of Power
The concept of a single country having enough power to impose Extraterritoriality sanctions may have more negative consequences than positive ones. Though the sanctioned country is in fact in the wrong, it is still a part of the complex international trade network. Putting sanctions on trade not only impacts the lives of innocent citizens in the country but other nations as well. Hence, many sanctions end up punishing innocent bystanders rather than the government officials who are actually in the wrong.
The ability to impose Extraterritoriality sanctions is a very powerful one, and nations must learn to gauge when to use it. It is better to leave their implementation to inter-governmental entities, which only impose them with the discussion and consent of all countries involved. This will help implement them in a manner that causes minimum damage to the countries having ties with the felonious country.
Blocking Statutes
Some countries may put forward blocking statutes if they disagree with the extent of the Extraterritoriality sanctions. Countries that trade with the sanctioned country on a regular basis or are co-dependent on them usually enact these. Blocking statutes basically means refusing to follow foreign country rulings or they are imposed by other countries.
The most famous instance of blocking statutes is the EU’s 1996 refusal to comply with Extraterritoriality sanctions on Iran, Cuba, and Libya. Many EU countries had important trade and diplomatic relations with these countries at that time. This would have made following them extremely detrimental to their economies.
The most recent case occurred in 2018 when the US imposed sanctions on Iran again due to disapproval of its nuclear program. However, the EU retaliated by reintroducing the 1996 statutes. This banned all European countries and citizens from complying with the sanctions. Hence, these are null and void in all European Countries as complying with them would hinder their economies greatly.
Hence, countries may submit pleas to intergovernmental bodies to block statutes if they feel that sanctions on another country will affect them negatively. This gives them the ability to bypass them and continue operations with the sanctioned country as normal.
Conclusion
Extraterritoriality Sanctions are policies and restrictions put in place to prevent offending countries from continuing their odious activities. However, in many cases, they may end up causing more harm than good. Many superpower countries have too much power in their hands, which they use to impose sanctions without consulting with other countries beforehand.
This can affect bystander countries that are not directly involved in the wrongdoing but depend on the wrongful country for essential goods. These countries can apply to block statutes if needed, to protect their trading and economy. Hence, it is important to review and revise who can impose sanctions and on what level. This would help make sure that it does not cross its limits and negatively affect innocent countries and citizens.
