What are sanctions?

Blog post | 09-02-2024 | Ministry of Foreign Affairs

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More and countries are on the offensive, or using force to achieve their objectives. Examples include Russia’s aggression against Ukraine, North Korea’s nuclear weapons programme, and hackers targeting the Netherlands. Such actions have all kinds of consequences, including implications for our security and economy.

The Netherlands is helping to build a world in which countries can trust each other, and don’t need to fear each other. To achieve this, it’s important that every country complies with international agreements.

But what if a country doesn’t? We can respond by imposing sanctions, to show that undesirable behaviour has consequences.

What are sanctions?

Sanctions are measures taken against countries, organisations or individuals, to show them that we do not condone actions that are at odds with international agreements. Such actions include aggression towards other countries, violation of human rights or the proliferation of nuclear weapons. There are different types of sanctions:

• financial sanctions: for example, freezing bank accounts or other assets, or banning investment in certain countries.
• trade sanctions: for example, banning trade in special products – such as technology or raw materials – that are a major source of income for a country.
• arms embargoes: prohibiting the import and export of military goods.
• travel and visa restrictions: for example, stopping certain people from travelling to the EU.

What is the purpose of sanctions?

Sanctions can be used to put pressure on countries, in order to stop them behaving in an unacceptable way. And the surest way to get the attention of a country, organisation or individual is to hit them where it hurts: their pocket. That’s why most sanctions focus on money and trade – reducing the income of the party concerned and their access to military technology. Sanctions make it harder for a country to wage war, for example.

Sanctions have five different objectives:

1. sending a powerful message – both to the target and to others – that we do not condone such behaviour.
2. putting a financial price on the failure to respect international rules or agreements.
3. making unacceptable behaviour harder, for example by restricting trade in technology or weapons.
4. discouraging others from behaving in the same way.
5. encouraging or even forcing other parties to change their behaviour.

How do we impose sanctions?

The more countries that impose a set of sanctions, the harder its impact. This is why the Netherlands almost always imposes sanctions as part of the European Union (EU). All 27 EU countries must first agree on the sanctions to be imposed, however. That can be difficult, because each country may be affected differently by the sanctions. For example, when the EU introduced sanctions against the import of oil from Russia in 2022, some EU countries were more affected by this than others.

This is why extensive consultations are always required. Only once all countries are agreed can the sanctions be officially announced. This was the case, for example, when sanctions were imposed on the import of oil from Russia. The next step is ensuring that everyone in the Netherlands (and the EU) upholds the sanctions.

Implementing and upholding sanctions

Sanctions only work if everyone upholds them. This means that a whole range of parties have to work together. For example, our customs authority, which check goods entering and leaving the country. Or Dutch banks, which monitor money entering the country from abroad. Dutch businesses also need to uphold sanctions. They must follow rules on doing business in countries facing sanctions. And it is prohibited to trade with people or organisations who are subject to sanctions.

In the Netherlands, the Ministry of Foreign Affairs works to foster a good working relationship between the organisations that have to comply with sanctions.

Combating circumvention

Sanctions are only effective if they’re not circumvented. One example of circumvention is buying products from a country even though it is subject to sanctions. The EU confronts countries that enable circumvention, and non-EU ‘broker’ countries may also be subject to sanctions.

What are the consequences of sanctions?

Sanctions can really hit a country, person or organisation where it hurts – their wallet. For example, their assets and possessions in the EU may be frozen. Sanctions can also make it harder to wage war, as technology from EU countries is no longer available.

Sanctions imposed on other countries sometimes affect us, too. Reduced trade with a third country can negatively impact our own economy. Or, in some cases, measures may be introduced against the Netherlands in response to sanctions. The Netherlands always tries to make a well-considered decision, looking at whether the intended effects outweigh the negative consequences for us. But sometimes sanctions are needed even if they cost the Netherlands money.

The exact effects of sanctions can be difficult to measure. However, if we let aggressive countries, organisations or people act with impunity, the consequences may be much worse. Unfortunately, maintaining order in the world can come at a cost. It is important to keep pushing back against unacceptable behaviour. And sanctions are a key part of that process.