International sanctions: how it works

Sanctions are international measures against a country, organisation, or person. A sanction makes trade difficult or even impossible. At the moment, international trade with Russia is restricted, because of its invasion of Ukraine.

Among others, the United Nations (UN) and the European Union (EU) are able to impose sanctions. They take these coercive measures to punish undesirable behaviour by countries, organisations, or persons or to combat terrorism. There are sanctions in place for dozens of countries. Besides Russia, Iran is a well-known example of a country against which sanctions apply.

Sanctions against Russia

There have been various sanctions against Russia since 2014. After Russia invaded neighbouring Ukraine in late February 2022, the EU imposed additional economic and financial sanctions against the country. The measures include financial restrictions against state banks and large state-owned companies, an export ban on various goods, and an import ban on weapons and related products. In addition, you are no longer allowed to do business with various individuals, companies, and organisations. The Netherlands Enterprise Agency (RVO) has an up-to-date overview of the sanctions (in Dutch).

Sanctions against Ukraine

Ukraine is also currently facing various sanctions (in Dutch). These are not directed against the current government, but against specific individuals and companies. For example, because they played a role in the misappropriation of Ukrainian state assets, the illegal annexation of Crimea, or the destabilisation of Eastern Ukraine.

The most common penalties

  1. Arms embargoes and trade restrictions are common. They ban the import or export of weapons, protective clothing, military vehicles, and dual-use goods such as night vision goggles.
    An embargo sometimes also applies to goods that earn money for the authorities in that country, such as oil or wood. Sometimes, an additional licensing requirement applies. For example, sensitive goods, software, and technology that a country could use in weapons programmes.
  2. Financial sanctions dry up financial flows to a large extent. Bank balances are frozen by the measures, giving funds (in)directly to certain persons and organisations is prohibited. There may also be a complete ban on financial transactions from and to a certain country.
  3. Travel and visa restrictions.

Diamonds

Trade in rough diamonds is also subject to sanctions. These are 'conflict diamonds' or 'blood diamonds'. Rebels trade these precious stones to finance an armed conflict with their country's government. The Kimberley Process is an international alliance dedicated to eliminating conflict diamonds from the trade. The Antwerp World Diamond Centre offers more information about importing or exporting rough diamonds.

Exceptions to sanctions

Sanctions must hit the right people and organisations. The aim is to spare the population of an affected country as much as possible. That is why there are always exceptions. Examples of these are diplomatic traffic, the supply and financing of humanitarian goods, and crisis management operations.

Overview of sanctions

You can find overviews of sanctions on the following pages:

The Dutch government provides more background information on international sanctions.

More information

Do you have any questions? Find out more in this dossier or contact a KVK advisor via telephone number 088 585 22 22.
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