What Are Sanctions?

International sanctions are restrictions imposed by one country — or a group of countries — on another country, organisation, or individual. They are a tool of foreign policy designed to apply economic and political pressure without resorting to military force. Sanctions can target everything from entire national economies to specific industries, companies, or named individuals, and they can take many different forms.

Types of Sanctions

Not all sanctions are the same. Understanding the distinctions matters:

  • Trade sanctions: Restrictions or outright bans on importing or exporting specific goods to or from a target country. Arms embargoes are a common form.
  • Financial sanctions: Freezing the assets of a government, company, or individual held in the sanctioning country's financial system, or barring access to its financial networks.
  • Travel bans: Prohibiting named individuals from entering the sanctioning country or countries.
  • Sectoral sanctions: Targeting specific sectors of a country's economy — such as energy, banking, or defence — rather than the whole economy.
  • Comprehensive sanctions: A near-total embargo on all economic activity with a country, such as the long-standing US sanctions on Cuba and Iran.

Who Imposes Sanctions?

Sanctions can be unilateral (imposed by one country acting alone) or multilateral (agreed upon by a group of countries). The most powerful sanctions regimes tend to be multilateral, as they close off more routes for the target to evade pressure.

Key actors in international sanctions include:

  • The United Nations Security Council, which can impose binding sanctions on all UN member states — though the veto power of permanent members (China, Russia, the US, UK, France) often limits this.
  • The United States, whose financial system is so central to global trade that US sanctions have an outsized global impact — even affecting third-country companies that do business in dollars.
  • The European Union, which has developed increasingly sophisticated sanctions capabilities, as seen clearly in the response to Russia's invasion of Ukraine.
  • Individual states acting alone, though their impact is limited unless they are major economic powers.

How Are They Enforced?

Enforcement is the critical — and often challenging — part. In the US, the Office of Foreign Assets Control (OFAC) within the Treasury Department is the primary enforcement body. It maintains lists of sanctioned individuals and entities (the Specially Designated Nationals list) and can impose massive fines on any company — anywhere in the world — that does business in US dollars and violates sanctions.

This extraterritorial reach is what makes US sanctions uniquely powerful. A European bank that processes a dollar-denominated transaction involving a sanctioned party can face penalties from US regulators, regardless of what European law says.

Do Sanctions Actually Work?

This is genuinely contested among economists and political scientists. The evidence is mixed. Sanctions have been credited with contributing to policy changes in some cases and criticised for causing civilian hardship while leaving governing elites largely unaffected in others. Key factors that influence effectiveness include:

  1. Breadth of participation: Sanctions with wide international buy-in are harder to evade.
  2. Clarity of demands: Sanctions tied to specific, achievable demands work better than vague calls for regime change.
  3. Availability of workarounds: Sanctioned countries often find alternative trading partners, alternative currencies, or black-market networks to soften the blow.
  4. Time horizon: Economic pressure takes time to build; short-term sanctions rarely achieve strategic goals.

The sanctions imposed on Russia following its 2022 invasion of Ukraine — among the most extensive ever applied to a major economy — have provided a real-world test case that economists and policymakers are studying closely.