Practice Of Sanctions Research Articles

Combatting fraud and corruption in international development

Purpose – This paper aims to analyse sanctions regimes of multilateral development banks and to examine some of the topical issues surrounding sanctioning practices of these institutions. Under the Agreement for Mutual Enforcement of Debarment Decisions (the “Mutual Enforcement Agreement”), sanctions covering the sanctionable practices that are imposed and made publicly available by any participating MDB may be enforced by other participating MDBs. This dramatically amplifies the impact of debarment decisions taken by any one of the participating MDBs, while affirming the MDBs’ commitment to combating the sanctionable practices. Consequently, companies will need to invigorate their procedures with a view to managing their risks not only in relation to national legislation, but also in relation to the MDBs’ sanctioning frameworks, which have much broader geographic scope than that of national legislation. This paper first provides an overview of the tenets established by the Mutual Enforcement Agreement. Further, as all MDBs maintain their own sanctions mechanisms, the paper analyses individual sanctions regimes of the WBG, EBRD and ADB. The paper then describes the types of sanctions that may be imposed by MDBs and examines some of the challenging issues surrounding the banks’ sanctions practices. Design/methodology/approach – This paper draws on the experience of senior lawyers who were intimately involved in the set-up of the sanctions regimes at the World Bank, the International Finance Corporation, the EBRD and the ADB and are currently involved in the work of sanctions boards at their respective institutions. Findings – Companies and individuals dealing with MDBs should be aware of the fact that, as a result of the Mutual Enforcement Agreement, the profile of MDBs’ fraud and corruption cases has been raised significantly and could result in global sanctions for prohibited practices in a single country. Consequently, a company engaging in a prohibited practice in its business dealings with one MDB might find itself unable to obtain financing from the four other MDBs participating in the Mutual Enforcement Agreement, and furthermore its debarment would be published by all five participating MDBs (subject to the above-described limitations of ADB’s publication regime). As MDBs continue to develop their sanctions regimes, greater harmonisation among sanctions processes is to be expected and companies doing business with MDBs should, at the very minimum, ensure that their compliance and ethics programmes are up to date, both as a preventative measure or, if wrongful actions have already taken place, as a means of mitigating the severity of possible sanctions. Originality/value – A lot has been written about the consequences of criminal convictions for bribery and other corrupt practices. However, much less attention has been paid to the evolution of anti-corruption policies and procedures which have been developed by a group of leading MDBs. In fact, for many corporates, sanctions regimes of MDBs remain unchartered territory, even though these sanctions proceedings can have far-reaching business consequences. This paper will, therefore, be of interest to all companies directly or indirectly involved with MDB-financed projects, as they need to be alert to the scope of MDB sanctions proceedings and the wide-ranging adverse business consequences that may result from any enforcement action.

Fight Against Corruption: Sanctions Regimes of Multilateral Development Banks

Much has been written about the consequences for companies of criminal convictions for bribery and other corrupt practices. However, less attention has been paid to the sanction regimes that have been developed by multilateral development banks (MDBs) in order to combat fraud and corruption in their operations. This may change in view of the fact that, on 9 April 2010, the heads of five leading MDBs--the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank--signed an agreement providing for mutual and reciprocal enforcement of debarment decisions. The Agreement for Mutual Enforcement of Debarment Decisions (the 'Agreement') thus increased the risk faced by commercial organizations that do business in the developing world, while affirming the MDBs' commitment to combating fraudulent, corrupt and collusive practices. Consequently, companies will need to invigorate their procedures with a view to managing their risks not only in relation to national legislation, but also in relation to the MDBs' sanctioning authorities, which have much broader geographic scope than that of national legislations such as the U.S. Foreign Corrupt Practices Act or the UK Bribery Act. This article first provides a brief history of anti-corruption measures taken by the MDBs and examines the tenets of collective enforcement action established by the Agreement. Further, as the signatories of the Agreement continue to maintain their own sanctions mechanisms, the article analyses the individual sanctions systems of each of the five signatories of the Agreement. Finally, the article describes the types of sanctions that may be imposed by MDBs and looks at some of the challenging issues surrounding MDBs' sanctions practices. Oxford University Press 2012, all rights reserved, Oxford University Press.

EU Aid Conditionality in ACP Countries: Explaining Inconsistency in EU Sanctions Practice

The EU is often criticised for using negative conditionality only in poor, strategically less important countries in the ACP region. However, whether and why there is inconsistency within the group of ACP countries has not been properly investigated. Therefore, this article investigates the reasons for the EU’s non-application of Article 96 of the Cotonou Agreement in five countries that can be considered typical cases where negative conditionality is generally imposed, namely countries that experienced flawed elections over the last ten years: Ethiopia, Rwanda, Nigeria, Kenya and Chad. On the one hand, the study confirms previous findings that security interests tend to trump the EU’s efforts to promote democratisation. On the other hand, the article adds that democratisation might not only conflict with the EU’s interests, but also with its objective to promote development and poverty reduction.

National Implementation of United Nations Sanctions

The implementation of the United Nations council sanctions by member states has gained increasing importance in the sanctions debate over the past 15 years. Having remained long neglected in academic circles, the sanctions review process sponsored by the Swiss, German, and Swedish governments over the past decade has been instrumental in putting the question of implementation at the centre of the sanctions research agenda.1 One of the main innovations that has characterized the sanctions landscape in the aftermath of the Cold War is the transformation of sanctions instruments: the classical trade embargoes that dominated the sanctions scene for most of the 20th century have given way to more sophisticated and carefully crafted measures. The establishment of targeted sanctions has been accompanied by other novel developments, such as the practice of targeting individuals rather than These transformations make it necessary to explore how the national implementation of multilateral sanctions has been affected, as well as its consequences for the efficacy of the measures.This article sketches the main issues surrounding the national implementation of United Nations sanctions. It identifies the most salient trends in the implementation of sanctions by individual states - and regional entity, namely the European Union - and outlines how they have been affected by the emergence of targeted, often blacklist-based sanctions. At the same time, the analysis endeavours to focus on the impact that new developments have on the efficacy of the measures concerned.The article is divided into four sections. The first provides brief introduction to the transformations in sanctions as tool over the past two decades. A second section outlines conflicting trends working both in favour and to the detriment of sanctions implementation. The third reviews the problems caused by the increasing encroachment on domestic legal orders by recent sanctions regimes. A final section discusses the difficulties posed by the violation of standards of due process resulting from UN blacklists, which merits special attention as it is the source of number of legal cases in Europe.THE UN SANCTIONS LANDSCAPE AND ITS POST-COLD WAR MUTATIONSThe use of sanctions by the UN council increased significantly in the aftermath of the Cold War. While the council subjected only two countries to mandatory sanctions prior to 1989 (Rhodesia and South Africa), Carina Staibano has counted 20 voluntary and mandatory sanctions regimes that were active between 1964 and 2005.2 As of the end of November 2009, there were 11 active sanctions regimes. UN sanctions practice has undergone series of transformations at different levels. For the purpose of our analysis, the innovations introduced in UN practice can be succinctly summarized as follows.In the early to mid-1990s, the UN council began to authorize sanctions to deal with internal armed conflict, especially in countries where state authority had collapsed, or so-called failed states. This was the case even in instances where internal conflict had limited external ramifications. From that point of view, the council departed from the restrictive interpretation of what constituted a threat to international peace and security that had characterized its practice since its inception. Apart from expanding the range of situations that qualified for enforcement action, the council also started to apply some of its sanctions regimes on only one of the parties in conflict, therefore manifestly taking sides. In range of internal conflict situations such as in the Democratic Republic of Congo, Cote d'Ivoire, Sierra Leone, and Angola, the sanctions targeted rebel groups. Similarly, the goals of sanctions regimes expanded to cover gross human rights violations, concerns about the proliferation of weapons of mass destruction, and international terrorism, thus acquiring new roles in preserving peace and security. …

The failure of sanctions and the evolution of international policy towards Iraq, 1990–2003

The day after Iraq’s August 1990 invasion of Kuwait, the United Nations Security Council passed Resolution 660 condemning Iraq’s aggression and demanding that it withdraw. A week later it passed Resolution 661 demanding that UN Member States prevent all trade and financial transactions with Iraq. In all of its previous history, the Security Council had only imposed sanctions to discipline errant states twice before. The precedent used for the drafting of Resolution 661 was the sanctions imposed on Rhodesia in December 1966 after it had declared independence from Britain. This signified something of an empirical vacuum where those drafting resolutions in New York deployed a set of assumptions that gave both the theory and practise of sanctions their coherence. It was assumed that a state, when faced with an on-going economic embargo, would be forced to react in predictable ways. If the application of sanctions caused enough suffering within society, then popular discontent would eventually force the ruling elite to change policy and work to lift sanctions as theoretically the state cannot escape public opinion or ignore a population whose economic well-being has been seriously damaged by the application of sanctions. In 1990–1991 the economic and political assumptions underpinning the practice of sanctions appeared to make Iraq an ideal candidate for their application given that 95% of Iraq’s foreign exchange earnings came directly from oil exports. In addition, the economy was dependent upon food imports costing US$3 billion annually. However, these assumptions along with the normative vision that gave sanctions their ideological coherence were proven wrong as the Iraqi regime manoeuvred to entrench itself further within society and actually strengthen its position.

Where and why does the EU impose sanctions ?

This article explores whether the EU behaves differently as a sanctioning actor towards its geographic vicinity than to regions further afield. It looks at the security relevance of the objectives advanced by sanctions, as well as the interplay between objectives and the geographic proximity of the targets to the EU in its autonomous sanctions practice (1987-2003). It identifies a pattern of geographic differentiation: Eastern Europe has been targeted for the widest variety of reasons, while in the Southern Mediterranean the only focus has been on terrorism. In Asia and Sub-Saharan Africa most sanctions have been geared towards the promotion of democracy and Human Rights.

The Permanent Five as Enforcers of Controls on Weapons of Mass Destruction: Building on the Iraq 'Precedent'?

The five permanent members of the Security Council form the core of an enforcement system against proliferation of weapons of mass destruction. The sanctions regime against Iraq shows commonality of interest among the five declared nuclear-weapons states to block the spread of WMD. This article first establishes the normative framework under which restraint of WMD is not simply a policy preference but a legal obligation rooted in widely-ratified treaties and general international law. After surveying multilateral non-proliferation regimes, the paper turns to the aspects of US law relevant to the imposition of non-proliferation sanctions, not just against Iraq but also against other violators. The Iraq sanctions are then compared to other proliferation cases (Libya; North Korea; India/ Pakistan) where unilateral (US) or concerted multilateral sanctions have been an available enforcement tool in the decade of the Iraq sanctions. Sanctions practice concerning actual or potential proliferators suggests an incipient pattern of potential Security Council enforce- ment. The Iraq case is unique because of Iraq's violations from within the relevant legal regimes, and precedential because of the Security Council's response in signalling to potential violators that serious sanctions can follow the breach of non-proliferation obligations. Arguably, non-proliferation regimes are stronger and more credible because the Council stayed the course on Iraq. The principal justification for the perpetuation of economic sanctions against Iraq in 2001 remains no less important than it was in 1991: the elimination of the threat to

A Decade of Sanctions against Iraq: Never Again! The End of Unlimited Sanctions in the Recent Practice of the UN Security Council

The inclusion of time limits signals a significant change in the recent sanctions practice of the Security Council. This change ties in with the ongoing debate about the reform of the Council's sanctions policy. The article traces the emergence of time limits by examining the constellation of the 'reverse veto' which triggered a shift in the sanctions policy of France, China and the Russian Federation. After a brief assessment of the legality of time limits, the main focus is placed on their implications for the future sanctions practice of the Council which are evaluated with regard to their contribution to a successful sanctions policy. The author addresses the shift in the internal power dynamics in the Council, the potential for ensuring the legality and for enhancing the legitimacy of the Council's sanctions policy as well as the objections raised against time limits for undermining the effectiveness of sanctions as the three crucial areas in assessing time limits. In conclusion, time limits are viewed as a device, the use of which has not only proved helpful in overcoming a threatening stalemate in the Council's sanctions policy but also has the potential of enhancing the flexibility and the legitimacy of such a policy.

UN Sanctions: Policy options for Canada

This article examines the sanctions debate in the context of recent experience in Iraq, Haiti and to a lesser extent South Africa. The purpose of the article is to locate this debate in a way that provides policymakers with concrete suggestions for improving the effectiveness of sanctions and mitigating their humanitarian impact. It also provides a realistic appraisal of the limitations of sanctions and the relative merits of other instruments of statecraft, including positive inducements, constructive engagements and the threat and use of force. Finally, the article demonstrates how Canada can use its unique diplomatic resources to encourage efforts to reform the perception and practice of UN sanctions, even in a political climate that appears resistant to such innovations.