Trade sanctions in international law

It frequently falls to international law firms like Stephenson Harwood to monitor the rapidly changing diplomatic landscape that influences the imposition and relaxation of sanctions.

 

Trade sanctions have long been an important diplomatic tool in the arsenal of national governments. The United States in particular is known for enacting sanctions against countries – from Cuba to Iran – which have provoked its ire. Diminishing defence budgets and lack of public appetite for military intervention have led the US, along with the EU and various other nations, to impose sanctions on Syria, Egypt and Russia in recent years. Such sanctions can be imposed unilaterally by a single nation – as is the case with the US and Cuba – or by an international body on behalf of all its members (for example, the UN on South Africa in the 1980s and Iraq in the 1990s).

Sanctions are playing an increasingly big role in the practice of international trade law. Certain businesses – including those in the shipping, energy and infrastructure industries – have to keep abreast of current sanctions that are in place and consider the effect potential future ones could have upon existing relationships with businesses in targeted countries. As a result, international law firms like Stephenson Harwood, which has well-established international trade and shipping practices, are tasked with monitoring the rapidly changing diplomatic landscape that influences the imposition and relaxation of sanctions. They must also keep a close watch on the ways in which courts have responded to the effects of sanctions in various jurisdictions.

This recent case demonstrates how quickly that landscape shifts: in 2014, SH acted for the National Iranian Tanker Company (NITC) as it fought against sanctions imposed on it by the EU. The NITC had been subject to an EU-wide asset freeze since 2012, which blocked it from conducting any business within the EU or with any EU companies globally. The General Court of the European Union then ruled that the sanctions were unlawful, as there was no evidence to support their original imposition. This victory turned out to be short-lived, as by 2015 the EU once again set about issuing sanctions on the company. After failed attempts by SH's lawyers to prevent the UK from voting in favour of the sanctions, they were re-imposed. The diplomatic landscape once again shifted soon after, when Iran agreed a nuclear deal with a group of world powers in January 2016. As a result, the most restrictive sanctions were lifted, and NITC's commercial director threw a party with European shipbrokers and insurers to bring business back.