Sanctions and Embargoes: How Are They Different?

Posted by Norman Lubeck
Blog originally posted on 26/04/2022 08:00 AM

Churchillian Thoughts on European Customs Valuation

Most of us have heard of the terms “sanctions” and “embargoes.” They are often used interchangeably, but they are quite different.

Trade sanctions target specific types of transactions, as in a prohibition to sell arms to a specific business, country, government, or regime. An embargo represents a complete prohibition of all trade activities between countries.

Sanctions and embargoes are political tools used throughout the world.

ancient greece

One of the first known embargoes was declared by Athens on a small town in Greece, Megara, around 2,400 years ago. The Megarians made the mistake of encroaching on land sacred to the goddess Demeter. Athenians responded by banning Megarian traders from lands controlled by Athens. The 27-year conflict that ensued left the Athenians in defeat.

Today, the main purpose of sanctions and embargoes is to influence the behavior of the target country’s governments, individuals, or groups.

In the United States, sanctions are issued by an executive order signed by the President. The Office of Foreign Asset Controls (OFAC) within the Treasury Department has been granted authority to administer these controls through national emergency powers, specific legislation, and Executive Order. The U.S. Department of Treasury, through OFAC, enforces the vast majority of economic trade sanctions and embargoes based on U.S. foreign policy and national security goals. Other departments, including the Departments of State, Department of Commerce, and others, may also play an important role.

Currently, OFAC administers 37 sanction programs. They range from a comprehensive embargo in the case of North Korea to “targeted sanctions” against specific industrial sectors or regions within a particular country, as in the case of the Ukraine – Russia Related Sanctions.

Whether you are the Megarian trader from 2,400 years ago or a modern corporation, the world of embargoes and sanctions can be confusing to navigate.

Please reach out to your Tradewin representative to help you. While we cannot remove these “trade barriers”, we will help you find a compliant way to navigate them.

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Topics: Export Consulting, Import Consulting

Blog originally posted on 26/04/2022 08:00 AM

Norman Lubeck

Written by Norman Lubeck

Norm joined Tradewin in 2011, continuing a successful career in international logistics and trade compliance that began in 1987. He has held the position of Trade Counsel for a logistics management firm and managed the Trade Compliance departments for several multinational corporations. Norm's technical background includes Focused Assessment, C-TPAT implementation, Free Trade Agreement compliance, and expertise in a broad spectrum of international trade topics. Norm holds a B.A. from Middlebury College and a J.D. from Suffolk Law School. He is a licensed customs broker and is a member of the Massachusetts Bar.