Trade embargo
Total or partial ban on trade with a country or entity, imposed by the UN, the EU or the United States.
Trade embargo
An embargo is a restrictive measure totally or partially prohibiting commercial relations with a targeted country, regime, entities or people. It is the most powerful sanction tool in international relations.
Types of embargo
- Total embargo: ban on any commercial transaction with the targeted country (rare, e.g.: old embargo on Iraq)
- Partial/sectoral embargo: ban limited to certain sectors (arms, oil, technologies, luxury)
- Arms embargo: the most common, prohibits exports of military equipment
Sanction issuers
- UN: Security Council resolutions, binding on all member states
- EU: restrictive measures within the framework of the CFSP (Common Foreign and Security Policy)
- United States: OFAC sanctions, often extraterritorial
- Other countries: national sanctions (UK, Canada, Australia, etc.)
Countries currently under EU sanctions
Russia (the most extensive — 14 sanctions packages since 2022), Belarus, Iran, Syria, North Korea, Myanmar, among others.
Corporate bonds
Every company must verify before each transaction that the destination country, entity and people involved are not under sanctions. This verification (screening) is a legal obligation.
Sanctions for violations
Violation of an embargo carries criminal sanctions (imprisonment), massive fines, confiscation of goods and exclusion from public markets.