What is Sanction? Who is Sanction Authority? Types of Sanction, Nature of Sanction, and Impact of Sanctions...:
Sanctions are penalties applied by one country or organization or authority on another country/countries or person(s) or company/companies or organization(s) or entity to control one's behaviour or to stop certain actions. Generally, Sanctions imposed or applied for global peace and security purpose or for political and social purpose which violates human rights, democracy, etc. However today, sanctions apply to one another for various reasons specially if they think them threat for one another for peace and security reason. Sanctions have various forms such as economic sanctions, trade sanctions, financial sanctions, and more.
Sanctions creates various forms of trade barriers, freezes the assets of specific people or companies, puts travel and visa restrictions, and restrictions on financial transactions. By applying different restrictions of economic, trade, financial, diplomatic, cultural, etc; the Sanctions applied entity/entities want(s) to change the behaviour for which the sanctions imposed. There are different authorities apply Sanctions; they are - UNSC, OFAC (USA), The Financial Crimes Enforcement Network (FinCEN) (USA), World Bank, EU and Local Jurisdiction.
Sanction Authorities Include:
* The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury
* The Financial Crimes Enforcement Network (FinCEN) (USA)
* The United Nations Security Council (UNSC), which also called UN Sanctions
* World Bank
* European Union (EU)
* UK Sanctions
* The Comptroller of the Currency (OCC) Directives, USA
* Local Jurisdiction
* And More...
Nature of Sanctions:
- International Sanctions
- Economic Sanctions
- Trade Sanctions
- Diplomatic Sanctions
- Sectoral Sanctions
- Military Sanctions
- Sport Sanctions
- Pragmatic Sanctions
- Targeted Sanctions
- Comprehensive Sanctions
Sanctions have greater impact from diversified grounds on targeted country/person/company/organization/entity. As sanctions impose restrictions and different barriers; the targeted country/person/company etc cannot proceed its trade and transactions with globally. Sanctions imposed without notice and with immediate effect.
In documentary credit, as Sanctions are a force of law, which will override the rules of UCPDC; even through complying presentation is made due to Sanctions, the exporter/beneficiary will not receive payment (as local laws and regulations applicable to the issuing bank/branch) which creates greater trade barrier among the parties and countries. Due to Sanctions impose, the targeted country or related entity cannot promote international trade and business and financial transactions with other countries or entities.
Published Date: 21/07/2023