The Legality of Unilateral Extra-territorial Sanctions under International Law

Abstract

Abstract Following its withdrawal from the Joint Comprehensive Plan of Action, the USA re-imposed economic and financial sanctions against Iran. Its current unilateral sanctions regime against the country contains extra-territorial sanctions which prohibit non-US nationals and non-US companies from trading with and investing in Iran. Foreign legal and natural persons who do not comply with the US extra-territorial legislation are faced with a variety of limitations, including access restrictions, fines and penalties. Thereby they not only put pressure on operators worldwide but also interfere with the sovereign foreign policy choices of states and international organisations such as the European Union (EU) who support legitimate trade with Iran. Equally problematic are the extra-territorial sanctions contained in the US sanctions regime against Cuba. The article examines the lawfulness of unilateral extra-territorial sanctions as a form of targeted sanction under international law in the relationship between the sanctioning state and other sovereign international actors affected by the extra-territorial legislation in light of the customary law on jurisdiction, the law on sanctions as well as the principle of non-intervention. The relationship between the US and the EU and its Member States will be taken as an example. It will be shown that unilateral extra-territorial sanctions may amount to an abuse of rights in case they are functionally connected to primary sanctions that violate jus cogens norms or that undermine the UN Charter system, irrespective of the strength of the exercised economic pressure.