INTERNATIONAL BUSINESS ANALYSIS

SANCTIONS

SAIRA ARIF
MBA 4(A)
01-120091-061
 SANCTIONS
Sanctions are a tool used by countries or international organizations to persuade a particular
government or group of governments to change their policy by restricting trade, investment or
other commercial activity. For example, sanctions may be applied to countries which develop
weapons of mass destruction, violate human rights or trade unfairly. The extent of the
sanctions often depends on the severity of the violation.

TRADE SANCTION:

Trade sanctions are trade penalties imposed by a country or group of countries on another
country or group of countries. These sanctions take the form of import tariffs, licensing
schemes or other administrative hurdles. Trade sanctions are the most common kind and are
the least tiring. They could be revocation of preferential treatment or import quotas against a
country not abiding by agreed international rules of trade. Mostly trade sanctions, are applied
for non-political reasons, typically as part of a trade dispute, or for purely economic reasons,
and typically involving tariffs or similar measures, rather than bans. For example, one country
may conclude that another is unfairly subsidizing exports of one or more products, or unfairly
protecting some sector from competition.

Economic sanctions are distinguished from trade sanctions, which are applied for purely
economic reasons, and typically take the form of tariffs or similar measures, rather than bans
on trade.

ECONOMIC SANCTION

Economic sanctions, typically a ban on trade, possibly limited to certain sectors such as
armaments, or with certain exceptions (such as food and medicine). Economic sanctions may
include trade embargoes or boycotts, freezing of assets, bans on cash transfers, bans on
technology transfer and restrictions on travel. The US Government has placed sanctions against
Cuba, North Korea and Iran among other countries.

ORIGIN OF SANCTION

Sanctions, in international diplomacy, first recorded 1919, from sanction in the sense of "part or
clause of a law which spells out the penalty for breaking it" (1651). More than 100 sanctions
were applied between the end of World War II and the United Nations embargo against Iraq
during the Gulf War.
HISTORY OF SANCTIONS

Sanctions have been a tool of economic statecraft for thousands of years. Pericles, a statesman
in Athens in the 5th century B.C. ordered all trade banned between the Athenian Empire and
Megra, a city-state that had sided with Sparta, Athens' enemy. He intended to send the
message that, short of going to war, Athens would punish anyone who challenged her
authority. These sanctions ultimately lead to a thirty-year war.

For most of the 20th century, sanctions were rarely used. During the Cold War, both the U.S.S.R.
and the United States tried to gain a competitive edge over each other by cooperating with
corrupt leaders. This policy made sanctions an ineffective tool. Before the fall of the Berlin Wall,
there were only two U.N.-approved sanctions, against South Africa.

After the Cold War, the U.N. Security Council ordered sanctions against a number of countries,
Afghanistan, Angola, Haiti, Iraq, Serbia, Somalia, Sudan, and others. Their violations include
external and internal aggression, support of terrorism, and suppression of democracy. Also
during this time, the United States rose to unprecedented international power, giving greater
authority to its unilateral sanctions. The United States' economic strength, combined with a
reluctance to deploy its military force to address economic, moral, or political problems
resulted in a sharp increase in unilateral sanctions. In 1998, one commentator estimated that
"two-thirds of the world's population was subject to some sort of US sanctions." However, the
United States has not been the only nation to employ economic sanctions. In addition to
thousands of single-nation bans and proposals, the increasingly viable European Union has
been sponsoring its own brand of sanctions

REFERENCE

http:// Sanction Define Sanction at Dictionary_com.mht

http://usforeignpolicy.about.com/od/introtoforeignpolicy/a/what-are-sanctions.htm

http://www.beyondintractability.org/essay/sanctions/