EU delays fresh Russia sanctions ahead of Ukraine talks
11 Feb 2015 12:00 am by Rebecca Gillingham
Jose Manuel Garcia-Margallo, Spain's foreign minister, has protested at the cost of existing sanctions on many southern European countries that are already facing economic difficulties.
"Sanctions have had a heavy cost for us all, the EU has so far lost €21 billion (£15.6bn). In Spain we have been badly hit in terms of agriculture and tourism," he said.
The impact of sanctions can be far reaching; often proving detrimental to more than the intended country as we have previously discussed in our posts on the impact of EU sanctions on the UK milk industry and the effect on the Oil and Gas industries.
Looking to history, this should not come as a surprise.
Cuban cigars are about to become legal in the United States
In February 1962, President John F Kennedy is reputed to have asked his press secretary to order him as many of his favourite Cuban cigars as he could within the next 24 hours. By the next morning, Pierre Salinger had secured more than 1000 of the H.Upmann petit coronas – just enough for Kennedy to then reach into a drawer and sign a decree banning all Cuban products from the United States. Whether this is true or not, the anecdote embodies the impact of trade sanctions and demonstrates the longevity of the most enduring trade embargo in history. In December 2014, President Obama announced a normalisation of relationships between the USA and Cuba where the US would review its position on Cuba as a state sponsor of terror and take steps to increase travel and commerce to and from the Island.
What was the true cost of US sanctions?
The US Chamber of Commerce estimates that the sanctions cost the US economy $1.2 billion per year and the Cuban Government estimates the cost of its economy as $685 million annually. The US was exposed to plenty of criticism for the effects of the embargo, including from the United Nations and the European Council. The sanctions have arguably contributed a great deal to continue to impoverish the Cuban people, whist at the same time limiting the US's ability to trade with one of its nearest neighbours - even whilst 190 other countries do so. And the sanctions have not led to regime change in Cuba. Whilst Fidel Castro retired as President of Cuba in 2008, his successor was his deputy and brother, Raul.
The announcement by President Obama of a normalisation of relationships between the USA and Cuba changes more than half a century of US policy on Cuba and ends the longest continuous application of sanctions in history.
How can organisations be compliant with Sanctions?
Even before the recent spate of EU sanctions, sanctions compliance was one of the most crucial areas of focus for organisations trying to comply with third-party due diligence. Political events can often lead to new guidance from regulators, such as the intensified focus on the EU's sanctions against Russia over Ukraine crisis and fortunately technology has evolved to meet these ever-changing challenges. 53 years after Cuba, up to the present day, there is no doubt that the use of sanctions as punishment is here to stay.
- Are Russian sanctions milking the UK dry?
- Sanctions headaches continue for the oil and gas industry in 2015
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