United Nations

A/50/439


General Assembly

Distr. GENERAL  

18 September 1995

ORIGINAL:
ENGLISH


Fiftieth session
Item 97 (a) of the provisional agenda*


SUSTAINABLE DEVELOPMENT AND INTERNATIONAL ECONOMIC COOPERATION:
TRADE AND DEVELOPMENT

Economic measures as means of political and economic coercion
against developing countries

Report of the Secretary-General

CONTENTS

  Paragraphs  Page

INTRODUCTION ...............................................1 -52

I.  SUMMARY OF RESPONSES RECEIVED FROM GOVERNMENTS .......6 - 173

II.  ACTIONS BY UNITED NATIONS BODIES AND OTHER
  INTERNATIONAL INSTRUMENTS ............................18 - 365

  A.  United Nations bodies ............................  18 - 305

  B.  Other international instruments ..................  31 - 369

III.  SUMMARY OF THE DELIBERATIONS OF THE EXPERT GROUP
  MEETING ..............................................37 - 5211

  A.  Conceptual issues ................................  39 - 4411

  B.  Legal issues .....................................  45 - 4713

  C.  Impact assessment ................................  48 - 5114

  D.  Institutional issues/follow-up ...................     5215

Annex.  List of experts invited to an expert group meeting on coercive
        economic measures ..............................................17


                       

  *  A/50/150.


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A/50/439
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INTRODUCTION


1.   The present report  has been prepared  in response  to General Assembly
resolution  48/l68 of  21 December  1993.  In  that resolution,  the General
Assembly,  inter alia, expressed  concern about  the adverse  effects of the
use of coercive economic measures  on the economy and development efforts of
developing   countries,  and   about   the  general   negative   impact   on
international  economic  cooperation  and  on  world-wide  efforts  to  move
towards a non-discriminatory, open trading  system.  The Assembly reaffirmed
that no State may  use or encourage  the use  of economic, political or  any
other type of  measures to coerce another State  in order to obtain from  it
the subordination of the exercise of its sovereign rights.

2.   The  Assembly also  called upon  the international  community to  adopt
urgent effective measures to eliminate the  use by some developed  countries
of unilateral coercive  economic measures against developing countries  that
are  not  authorized  by  relevant  organs  of  the  United Nations  or  are
inconsistent with  the principles  contained in  the Charter  of the  United
Nations, and  requested the Secretary-General  to assign  to the  Department
for Economic  and  Social Information  and  Policy  Analysis of  the  United
Nations Secretariat,  in cooperation  with the United Nations  Conference on
Trade and Development, the function of  continuing to monitor the imposition
of  measures of  this nature,  as well  as to  continue the  preparation  of
studies in  this  field, as  mandated by  the  Assembly  in its  resolutions
44/2l5  and 46/2l0.   Finally, the Assembly  requested the Secretary-General
to  report to  it  at its  fiftieth session  on  the implementation  of  the
resolution.

3.  Accordingly, the Secretary General, in a note verbale dated March  1995,
invited the  Governments of all States to provide relevant  information.  At
the time  of preparation of  the present report,  replies had been  received
from  the  Governments of  the  following  seven  States:   Colombia,  Cuba,
Ecuador, Estonia, Iraq, Japan and Madagascar.

4.   The Department for Economic and Social  Information and Policy Analysis
convened an expert  group meeting on  the subject  to solicit  the views  of
internationally  recognized  experts on  the  concept  and  implications  of
coercive economic measures.

5.    The  present  report  contains  a  summary  of the  responses  of  the
abovementioned Governments,  a review  of relevant  actions on  the part  of
United Nations bodies and other multilateral  instruments, and a summary  of
the deliberations of the above-mentioned meeting.


I.  SUMMARY OF RESPONSES RECEIVED FROM GOVERNMENTS

6.   The  Government of  Colombia noted  that  it  continues to  support the
relevant  provisions of General  Assembly resolution  48/l68 relating to the
non-legitimacy of the imposition of coercive economic measures.

7.  The Government of  Cuba stressed that despite the  end of the  cold war,
certain Powers,  based on their predominant  position in  the world economy,
have  continued  to  use  coercive  economic  measures  against   developing

countries.    The imposition  of  coercive  economic measures  ignores  such
principles as the  sovereign equality  of States, non-intervention and  non-
interference  in  the internal  affairs  of  sovereign States,  and violates
international legal  instruments with the  intent of  forcibly imposing  the
political will of the sending State  and subverting the political,  economic
and  social  regime of  the  target  State.    Unilateral coercive  economic
measures are inconsistent with the objectives  and principles of the Charter
of  the  United  Nations,  and  also  contradict  the  principles  and norms
established  in   the  International  Development   Strategy,  the   General
Agreement on  Tariffs and Trade,  and the resolutions  and decisions of  the
United Nations General Assembly and the  United Nations Conference on  Trade
and Development.  The Government of  Cuba indicated that unilateral coercive
economic  measures  include  a  variety  of  punitive  actions  against  the
targeted State, such as closing off the domestic market of the country  that
imposes  the measure  to  the targeted  country;  eliminating  mostfavoured-
nation  treatment;   preventing  and  limiting   commercial  and   financial
transactions with third countries; obstructing the procurement of  essential
goods  by the  target State;  attempting  to  prevent access  to appropriate
technology;  attempting to obstruct commercial  navigation; subjecting third
countries to  extraterritorial  provisions; limiting  the implementation  of
principles  and provisions  relating to  intellectual property  rights;  and
applying  political  and  discriminatory  criteria  in  granting  visas   or
residence permits.

8.  The Government  of Cuba considers  the economic blockade imposed by  the
United  States  of America  against Cuba  for more  than  35 years  to be  a
blatant  example of  the application  of  this  type of  unilateral coercive
economic measure. In addition to the  social consequences that such measures
have caused, they are estimated to have cost the country over $40 billion.

9.   According  to  the  Government of  Cuba, the  imposition of  the United
States blockade has  imposed such costs as  the loss of preferential  prices
for sugar exports; a lack of  financial resources; substantial increases  in
transport costs,  resulting  from  the  geographical shift  in  its  trading
pattern; immobilization  of vast quantities  of resources; excessive  prices
for imported goods; idling of plants and equipment,  owing to lack of  spare
parts;  the  reduction  of  tourist  activities;  and  the  loss  of related
earnings.

10.  The Government of  Cuba considers that these  punitive measures applied
by  the United States  against Cuba  are clearly  incompatible with relevant
resolutions adopted by the United Nations General Assembly.

11.   The Government of Cuba is concerned that, despite relevant resolutions
adopted in  recent years  by the  General Assembly  on the  use of  coercive
economic  measures  against developing  countries,  which  provide  a  clear
mandate, the United  Nations Secretariat  has still not identified  specific
activities within the medium-term plan and  programme budget for the  proper
implementation of  those  decisions.   The  Government  of Cuba  hopes  that
appropriate measures will be taken to rectify this state of affairs.

12.    The Government  of  Ecuador  stressed  its  full  agreement with  the
provisions  of  General  Assembly  resolution  48/l68,  which  condemn   the
imposition of  coercive  economic  measures  against  developing  countries.
Ecuador believes  that the use  of coercive economic measures  to impose one
State's  will  on another  is  inconsistent  with  the  basic principles  of
international  law.   Such  measures  have  no justification  or  legitimacy
unless they  are authorized by  the competent organs  of the  United Nations
and  are  consistent with  the  principles  of the  Charter  of  the  United
Nations.

13.   Attempts to  coerce a  State by means  of economic  pressure can  have
serious consequences  for the  human rights  of individuals  living in  that
State.  Coercive economic measures have  no international legitimacy and are
also  incompatible  with   the  provisions  of  a  number  of  international
instruments,  including  the Universal  Declaration  of  Human  Rights,  the

International  Covenants  on  Economic,  Social  and  Cultural  Rights,  the
Universal  Declaration on  the Eradication  of Hunger  and Malnutrition, and
the Convention  on the  Rights of  the Child.    Such measures  particularly
infringe  upon the  universal principles  of the  right of  people to  self-
determination and  the  right of  individuals  to  well-being.   The  social
institutions and physical infrastructure of countries subjected to  economic
coercion  are usually seriously  affected.   Ecuador therefore believes that
economic pressure also infringes upon the right  to development as set forth
in  the Declaration  on  the Right  to Development  adopted  by  the General
Assembly in 1986.

14.  The Government of Estonia noted that  Estonia has never used  political
or  economic sanctions against  any country,  except when  authorized by the
United Nations.   Estonia  reaffirms the  basic position  that all  coercive
measures not in keeping with the Charter of  the United Nations and  without
the  authorization  of  the  United  Nations  Security  Council  are  to  be
condemned by the international community.

15.  The Government of Iraq noted that, in believing firmly in  the right of
States to the exercise of complete sovereignty and equality  and respect for
human rights,  it strongly opposes  the use by  some developed countries  of
arbitrary economic  measures as a means  of political  and economic coercion
against  the peoples  of the  world with  the aim  of humiliating  them  and
depriving them of their basic right  to development and economic well-being.
The Government  of Iraq stresses that  the coercive  economic measures taken
by  some  developed countries  against  developing  countries  constitute  a
flagrant  violation of the Charter  of the United Nations, the principles of
international   law,  the   principles  of  human  rights   and  the  divine
prescriptions of religious law.   Iraq calls upon those  countries to desist
from  enacting any  legislation or  taking  any  measures that  threaten the
economic security of the  countries of the third world and prevent them from
enjoying their right  to a free and decent  life of wellbeing and  economic,
social and scientific progress.

 16.   The Government of Japan  stressed that it  had voted against  General
Assembly resolution 48/l68.  Japan is therefore opposed  to the inclusion of
the  item  on  coercive economic  measures  in  the  agenda  of  the  Second
Committee at the fiftieth session of the General Assembly.   Japan is of the
view  that it  is inappropriate  to  discuss  economic sanctions  in general
because  this  distorts  their  meaning,  making  it  appear  that  they are
unilateral measures taken by developed against developing countries.

17.   The Government  of Madagascar  provided information  about negotiating
with the  International  Monetary Fund  concerning  access  to the  Enhanced
Structural Adjustment Facility.


II.  ACTION BY UNITED NATIONS BODIES AND OTHER
     INTERNATIONAL INSTRUMENTS               

A.  United Nations bodies

18.    The  relevant  General  Assembly  resolutions  and  declarations  are
described below.


      1.  Declaration on the Inadmissibility of Intervention in
          the Domestic Affairs of States and the Protection of
          Their Independence and Sovereignty (General Assembly
          resolution 2l3l (XX)) and Declaration on Principles
          of International Law concerning Friendly Relations
          and Cooperation among States in Accordance with the
          Charter of the United Nations (General Assembly
          resolution 2625 (XXV))                 

19.   Both declarations provide  that no State  has the  right to intervene,

directly  or  indirectly,  for  any  reason  whatever,  in  the  internal or
external affairs of any other State.   Consequently, armed intervention  and
all  other   forms  of  interference   or  attempted   threats  against  the
personality of  the State  or against  its political,  economic or  cultural
elements are condemned.

20.  Both  declarations also state that  no State may  use or  encourage the
use of economic, political  or any other type of measures to coerce  another
State in  order to obtain from it  the subordination of  the exercise of its
sovereign rights  or to  secure from  it advantages  of any  kind, and  that
every  State has  an undeniable  right  to  choose its  political, economic,
social and  cultural system,  without interference  in any  form by  another
State.


    2.  Declaration on the Establishment of a New International
           Economic Order (General Assembly resolution 320l (S-VI))

21.  The Declaration provides, in part,  that the new international economic
order should  be founded on full respect for the  full permanent sovereignty
of every State over  its natural resources and all its economic  activities.
In order  to safeguard these  resources, each State is  entitled to exercise
effective control  over them and their  exploitation with  means suitable to
its  situation,  including  the  right  of nationalization  or  transfer  of
ownership to  its nationals,  this right  being an  expression  of the  full
permanent sovereignty  of the State.   The Declaration  states the no  State
may be  subjected to economic,  political or any  other type  of coercion to
prevent the free and full exercise of this inalienable right.


3.  Charter of Economic Rights and Duties of States
    (General Assembly resolution 328l (XXIX))     

22.    Article  32 states  that no  State may  use or  encourage the  use of
economic, political  or any other type  of measures to  coerce another State
in  order to  obtain  from it  the  subordination  of  the exercise  of  its
sovereign rights.

4.  Commission on Human Rights

23.   The Commission  on Human Rights,  in its  resolution 1994/47, entitled
"Human rights  and unilateral  coercive economic  measures", identified  the
following instruments and resolutions  as providing the  legal framework for
the consideration of the issue:

  (a)  Charter of the United Nations;

  (b)   Declaration on Principles  of International  Law concerning Friendly
Relations  and Cooperation among  States in  accordance with  the Charter of
the United Nations (General Assembly resolution 2625 (XXV));

  (c)   Charter of  Economic Rights and  Duties of  States (General Assembly
resolution 328l (XXIX)), in particular article 32;

  (d)  The Vienna  Declaration and Programme of  Action adopted by the World
Conference on Human Rights in June 1993; 1/

  (e)  Commission on Human Rights resolutions 199l/79, 1992/39, 1993/59.

24.  The Commission on Human  Rights identified unilateral coercive measures
against   developing  countries,   such  as   blockades,   embargoes,  trade
restrictions  and freezing of  assets as  being in  clear contradiction with
international  law. Such  measures have  the  purpose of  preventing  target
States  from exercising their  rights to determine their political, economic
and social system, and are intended to exert political, economic and  social
pressure.  Unilateral coercive economic  measures create obstacles  to trade

relations among States,  adversely affect the  socio-humanitarian activities
of developing countries, and hinder the  full realization of human rights by
the people  subject to those  measures.  The  human rights  affected include
those set forth in the Universal Declaration of Human Rights, in  particular
the right  of people  to self-determination  and the  right to  development.
Unilateral coercive  economic measures  thus also  constitute violations  of
peoples' rights.

25.  The Working  Group on the  Right to  Development identified the use  of
unilateral  coercive economic measures  as an obstacle to the implementation
of the Declaration on the Right to Development.

26.  The Commission  on Human Rights,  at both its fiftieth and  fifty-first
sessions, requested  the Secretary-General to  submit, in consultation  with
Governments,   specialized   agencies   and   intergovernmental   and   non-
governmental  organizations,  a report  on  coercive  measures  unilaterally
implemented against  developing countries that  hinder the full  realization
of all  rights set forth  in the Universal  Declaration of  Human Rights and
other  international human  rights instruments,  particularly the  right  of
people to a minimum standard of living and development.

27.   In accordance with Commission  on Human Rights resolution 1994/47, the
Secretary-General  submitted a  report on  the  subject at  its  fifty-first
session, containing comments submitted  by Governments, specialized agencies
and  intergovernmental  and  non-governmental   organizations  on   coercive
measures    unilaterally    implemented   against    developing    countries
(E/CN.4/1995/43).    The  report  contains  some  salient  points  based  on
replies, such as:

  (a)  The use of all forms of  coercive measures violates the principle  of
international   cooperation,  and   constitutes   a   barrier  to   mutually
advantageous cooperation between countries;

  (b)   The use  of unilateral  coercive economic measures       has  severe
repercussions  on  the  economies  of  targeted  developing  countries,  and
creates numerous social problems;

  (c)   The  use of  unilateral coercive  economic measures  as a  means  of
exercising  political  and economic  pressure  against developing  countries
constitutes  a grave violation  of the  human rights  of individuals, groups
and  people recognized  in the  Charter of  the United  Nations and  in  all
international human rights instruments.

28.    The  Commission  on Human  Rights  has  called on  the  international
community to reject the  use of such unilateral  coercive measures.   It has
requested all  States to refrain from  adopting them, and  has condemned the
fact that certain countries, using their  predominant position in the  world
economy,  continue  to  intensify  the  adoption  of  such  measures.    The
Commission  has also stressed  that the  international community  as a whole
should  hold Governments responsible  for the  use of  coercive measures and
their  consequences, and should  take firm  action to  thwart such attempts,
which  are in flagrant  violation of  international law.  The United Nations
should deal with  the adverse effects  of these coercive  measures on  human
rights,  and should  establish a  mechanism  to monitor  the forms  of  such
measures, the purposes they are designed  to achieve and their repercussions
on the economies of the developing countries affected.  This would
also include identifying countries that impose  such measures with a view to
determining the adequate manner in which the measures  should be tackled and
finally eliminated.


5.  International Law Commission

29.   The International Law Commission has been considering  a draft article
on  prohibited countermeasures  within the  context of  its codification and
progressive development  of the law of  State responsibility.  At its forty-

sixth  session (2  May-22 July  1994), the Commission  provisionally adopted
draft article l4,  entitled "Prohibited counter  measures", for inclusion in
the  draft  articles   concerning  the   content,  forms   and  degrees   of
international  responsibility.   The text  of article  l4,  as provisionally
adopted by the Commission, reads as follows:


Article l4

Prohibited countermeasures

  "An injured State shall not resort by way of countermeasures, to:

  (a)   The threat  or use  of force  as prohibited  by the  Charter of  the
United Nations;

  (b)   Extreme  economic or  political  coercion  designed to  endanger the
territorial  integrity or  political independence  of  the State  which  has
committed an international wrongful act;

  (c)  Any conduct which derogates from basic human rights;

  (d)  Any other  conduct in contravention of norms of general international
law."

30.   However, the  Commission decided not  to formally  submit articles  on
countermeasures  to the  General Assembly,  pending  the adoption  of  other
articles   on  countermeasures   and   the  submission   of   the   relevant
commentaries.   At  its forty-seventh  session  (2  May-2l July  1995),  the
Commission  adopted   a  set   of  draft   articles  on   the  question   of
countermeasures, which  will be  submitted to  the General  Assembly at  its
fiftieth session.


B.  Other international instruments

1.  General Agreement on Tariffs and Trade

31.   Article  XXI of the  General Agreement on  Tariffs and Trade  2/ deals
with security exceptions.   It states that nothing in the Agreement shall be
construed to prevent  any contracting party from  taking any action  that it
considers necessary  for the protection of its essential security interests.
The interpretation and  application of article XXI  is still the subject  of
dispute as illustrated, inter alia, by:

  (a)  The complaint of former  Czechoslovakia against the United  States of
America,  in 1949, concerning restrictive trade measures.   In this case, it
was  stated that  every country  must be  the  judge in  the last  resort on
questions  relating to its  security.  On the  other hand, every contracting
party should be cautious  not to take  any step that might have  the effects
of undermining the General Agreement;

  (b)  In 196l, on the  occasion of the accession of  Portugal, Ghana stated
that its  boycott  of Portuguese  goods  was  justified under  article  XXI,
noting that  under that article,  each contracting party was  the sole judge
of what was necessary  in its essential  security interest.  The  Government
of Ghana  felt that the  situation in Angola  was a constant  threat to  the
peace of  the African  continent, and  that any  action  which, by  bringing
pressure to bear on the Portuguese Government, might lead to a lessening  of
this danger, was therefore justified in  the essential security interest  of
Ghana;

  (c)   The  United States  embargo on  trade  with  Cuba, imposed  in 1962,
invoked  article  XXI as  justification (national  security reasons).   Cuba
rejected that argument;

  (d)   In 1970,  the Working  Party report  on the accession  of the former
United  Arab  Republic   stressed  that,  in  response  to  concerns  raised
regarding the Arab League boycott against  Israel, the representative of the
former UAR noted that in view of the  political character of this issue, the
United  Arab  Republic  did  not wish  to  discuss  it  within  GATT.    The
background of the boycott measures was political and not commercial;

  (e)  In November 1975, Sweden introduced a global import quota system  for
certain footwear.  The Government of Sweden considered that  the measure was
taken in conformity with  the spirit of article XXI, and stated, inter alia,
that the  decrease in  domestic production had  become a critical  threat to
the emergency planning of  Sweden's economic defence as  an integral part of
the country's security policy;

  (f)  In April 1982, the former European  Economic Community and its member
States,  Canada and  Australia, suspended  indefinitely imports  into  their
territories of products from Argentina.   In notifying these measures,  they
stated that they had  taken certain measures in  the light of  the situation
addressed  in Security Council  resolution 502  (1982); that  they had taken
those measures on the  basis of their inherent rights, of which article  XXI
of the  General Agreement  was a reflection.   Argentina  took the  position
that, in  addition to infringing  the principles  and objectives  underlying
GATT, those measures violated specific GATT  articles.  Argentina sought  an
interpretation  of article  XXI.   These  efforts  led to  the inclusion  of
paragraph  7 (III) in  the Ministerial  Declaration of  November 1982, which
provides that the  contracting parties undertake, individually and  jointly,
to  abstain from  taking restrictive  trade measures for  reasons of  a non-
economic character, that are not consistent with the General Agreement;

  (g)  On 7 May 1985, the United  States of America notified the contracting
parties of an executive order prohibiting all imports of  goods and services
of Nicaraguan origin, and  all exports from the United States to  Nicaragua.
Nicaragua stated that those measures contravened  GATT articles and that  it
was a matter not  of national security  but of coercion.  Nicaragua  further
stated that article XXI could not be  applied in an arbitrary fashion.   The
United States stated that  its action had been  taken for national  security
reasons, and  that it  was the  prerogative of  each country to  judge which
action it considered necessary to protect its essential security interests;

  (h)    In  November  199l,  the   European  Community  (EC)  notified  the
contracting parties that the  EC and its member States had decided to  adopt
trade  measures  against  former  Yugoslavia.    The  EC  stated  that those
measures were taken upon  consideration of its  essential security interests
and were  based on article XXI. Former Yugoslavia stated that those measures
were inconsistent with the GATT agreement.

32.  The above  briefly described instances of  the application of  coercive
economic measures with reference to article XXI of the General Agreement  on
Tariffs  and Trade  indicate  the  difficulties  in  the  interpretation  of
national  security exceptions,  and thus  the difficulties  in  legitimizing
coercive economic measures for national security reasons.


2.  Helsinki Final Act, 1975

33.   Principle VI  of the  Declaration of the  Principles guiding Relations
between Participating States adopted in the  Final Act of the  Conference on
Security and  Cooperation in  Europe on  1 August  1975,  3/ entitled  "Non-
intervention in internal affairs" provides, in part, that the  participating
States,  will likewise  in all circumstances  refrain from any  other act of
military, political, economic or  other coercion designed  to subordinate to
their own  interest  the exercise  by  another  participating State  of  the
rights inherent in  its sovereignty  and thus  to secure  advantages of  any
kind.

             3.  The Charter of the Organization of American States of
                 30 April 1948, as amended 27 February 1967

34.  Article l8  of the Charter  of Bogota establishing the Organization  of
American States 4/ provides that  no State or group of States has the  right
to intervene,  directly  or indirectly,  for  any  reason whatever,  in  the
internal  or external affairs of  any other State.   The foregoing principle
prohibits not only  armed force but also any  other form of interference  or
attempted threat  against  the personality  of  the  State, or  against  its
political, economic and cultural elements.

35.  Article 19  of the Charter states  that no State may  use or  encourage
the use of coercive  measures of an economic or political character in order
to force the sovereign  will of another State and obtain from it  advantages
of any kind.

36.  Article  34 of the Charter provides  that member States should  refrain
from practising policies and adopting actions  or measures that have serious
adverse effects for the development of other member States.


                  III.  SUMMARY OF THE DELIBERATIONS OF THE EXPERT
                        GROUP MEETING

37.  The Department for Economic and Social  Information and Policy Analysis
convened an  expert group meeting on  coercive economic  measures (see annex
for a list of experts invited).  The  meeting discussed conceptual and legal
issues, the problems of impact assessment and institutional arrangements.

38.  The main findings of the meeting are summarized below.


A.  Conceptual issues

1.  Definition

39.   The  imposition  of  coercive economic  measures must  be seen  in the
context  of the use  of tools of  economic statecraft  and as  an element of
coercive  diplomacy.  The meeting  agreed  that  the definition  of coercive
economic measures must include the following essential elements:

  (a)  The  motives of the  sender State  and the  explicitly stated  policy
objectives  (i.e.,  identification of  the  objectionable  policies  in  the
target State);

  (b)   The selection of specific  types of economic  instruments imposed on
the target  State with the objective  of enforcing  changes in objectionable
policies in the target State;

  (c)   The implicit  assumption that  the imposition  of coercive  economic
measures  causes  economic  damage  and  dislocation in  the  target  State,
creating political, economic and social tensions  in the target State, which
in turn create pressure for policy changes.
  40.  The meeting determined that  coercive economic measures are  negative
economic activities  imposed by the sender on the target State for political
(non-economic) purposes.    Coercive  economic measures  can be  imposed  by
individual States (unilateral  economic sanctions) or regional organizations
(plurilateral  economic  sanctions).   The  specific,  defining  feature  of
coercive economic measures  is that of negative economic activities  applied
for  political  purposes,   forming  part  of  discriminatory  or   punitive
interventionist policies. The meeting  agreed that the  existence of serious
material impact is  a necessary condition  for negative  economic activities
to qualify  as coercive  economic measures.   This definition  distinguishes
coercive economic measures from:

  (a)    Multilateral economic  sanctions  imposed  by the  Security Council

after determining a threat  to international peace and  security.  This type
of  multilateral  economic sanction  is  legitimized  by  the  international
community as an instrument to enforce the collective  security regime.  This
bestows legal, political and moral authority;

  (b)   Unilateral or  plurilateral economic sanctions imposed  for economic
purposes.    Specific   types  of  unilateral  or  plurilateral   sanctions,
especially when  they  relate to  trade  measures,  are  dealt with  in  the
context  of  the  multilateral  trade  regime  (norms,  rules  and   dispute
settlement mechanisms);

  (c)   Positive  economic sanctions  (affirmative economic  measures)  that
involve adequate incentives and reward systems to induce policy changes.

41.    The  concept  of  coercive  economic  measures  embraces  the  policy
objectives of the sender State, the  selection of specific economic measures
by the sender  State, the economic impact on  the target State and  enforced
policy changes in  the target State.   The  assessment of  the economic  and
political  effectiveness of coercive  economic measures and the judgement of
their legitimacy are further relevant issues.


2.  Policy objectives

42.   The motives of the sender State and  the derived policy objectives are
essential factors in  the concept of coercive  economic measures.  The  real
motives   and  the   explicitly   stated  policy   objectives   (change   of
objectionable policies)  are related but not  always identical.   The stated
policy objectives  are  the result  of  political  processes in  the  sender
State, and  reflect the reconciliation of  often divergent  interests.  They
range from alleged threats  to the national security of the sender State and
the alleged violation of agreed international  norms and instruments by  the
target  State, to expressions  of dislike  for specific  domestic or foreign
policies of the target  State or more generally for the political and socio-
economic  system of  the target  State.    The stated  policy objectives  in
specific cases  of  coercive economic  measures  reflect  a broad  range  of
options based  on unilateral  judgements by  the sender  State, and  express
specific  interests.     This  approach  forms  part  of  coercive  economic
diplomacy in inter-State relations.

43.  The meeting agreed that  a general classification of motives/objectives
should include  the broad categories  of deterrence, compliance,  punishment
and retaliation.  Efforts  to establish a hierarchical order of motives  are
relevant  for the consideration  of legitimacy.   Any  hierarchical ordering
must be devised  in accordance with degrees of acceptability  (acceptability
criteria).    Some participants  stressed the  view  that coercive  economic
measures are  to some  extent an  unavoidable part  of the  use of  economic
tools of statecraft as coercive diplomacy.  In this view, coercive  economic
measures  can constitute an  alternative to  the use of military  force.  It
was  agreed, however,  that  without clearly  defined  criteria,  unilateral
decisions  on the use of  coercive economic measures  have the potential for
arbitrariness and abuse.  It was also  agreed that any hierarchical ordering
in terms  of acceptability  should place  policy objectives  related to  the
violation of internationally agreed norms and instruments above those  based
on  the  expression of  objections  to  the  specific  political and  socio-
economic system of the target State.


3.  Type of coercive economic measures

44.   The meeting  agreed that  sender States  can potentially  resort to  a
large variety of economic instruments.   The selection of specific  economic
measures is linked  to the basic objective,  namely, to restrict  the target
State's  access  to  markets,  capital,  technology  and  investment.    The
selection  of specific  trade, finance  and investment-related  measures  is
intended to  maximize  the negative  economic  impact  in order  to  enforce

changes in  the alleged  objectionable policies.   The  broad categories  of
trade, finance and  investment-related measures can be further subdivided in
a typology of individual  measures.  The selection  of specific measures  is
influenced by such factors as the  policy objectives, the intended  negative
economic  impact,   the  economic  size  of   the  target   State,  and  the
geographical proximity and strength of economic  ties between the sender and
target  States.   The  interplay  of these  factors  has to  be analysed  in
specific cases in order to permit adequate generalizations.


B.  Legal issues

45.   An  essential problem addressed  by the meeting  is that of  the legal
base, such  as international  law, declarations and  resolutions adopted  by
international  organizations,  and  provisions  contained  in  international
regimes and conventions.   The basic question is how to interpret such legal
instruments for  applicable  norms and  criteria  with  which to  judge  the
legitimacy of  coercive economic measures, both  in general  and in specific
cases.   The relevant  provisions of  such instruments  reflect a  normative
consensus  on  the  legality  of coercive  economic  measures  under certain
circumstances, but there is  a lack of normative consensus in certain  other
respects.  The meeting agreed that the  basic principle to be applied in the
judgement of  the legality  of coercive  economic measures  is that of  non-
intervention and  non-discrimination, based on such norms as the sovereignty
of nation  States and  the sovereign  equality of  States.   This  prohibits
intervention  into  the domestic  affairs  of  sovereign  States, either  by
forcible (military)  or non-forcible (economic)  intervention, as a  general
rule.  The  strict observation and application  of these basic principles of
international law, backed by specific declarations adopted by  international
organizations, prohibits  the application of  coercive economic measures  as
instruments  of intervention,  including any  attempts at  an  exterritorial
application of coercive  economic measures.  This establishes the  generally
applicable rule.

46.    Evolving  norms  in  international   law  and  specific   enforcement
provisions in  international regimes and conventions  can contribute to  the
specification of the applicable  criteria to be used in the judgement of the
legitimacy  of   coercive  economic   measures  (States'   responsibilities,
response  to  wrongful acts  etc.).  This  development, however,  should not
detract  from the applicability of the basic  principles of non-intervention
and  non-discrimination.   It should  also be  taken  into account,  even in
applying  exceptions,   that  the  response  must  be  proportional  to  the
seriousness of the violation (principle of proportionality).

47.  While not  disputing the general rule,  some participants expressed the
view   that  the  application   of  coercive  economic  measures  cannot  be
completely   excluded  in   a  realistic   consideration   of  international
relations.  Exceptions, according to this view, include the use of  coercive
economic  measures as  part of  an enforcement  mechanism  incorporated into
internationally agreed instruments  and regimes.  Under such  circumstances,
coercive economic measures can be  legitimately applied in the case of clear
violations  of internationally  agreed  norms.   Such  judgements,  however,
should  be made on a multilateral  and not a  unilateral basis.  The meeting
noted that  despite the above-mentioned principles,  there have been  recent
attempts   to   justify   unilateral   coercive  measures   for   explicitly
interventionist  purposes (to  bring  about changes  in a  sovereign State's
economic and  political system).  The  meeting viewed  this development with
concern  and wished  to  bring it  to  the  attention  of the  international
community.


C.  Impact assessment

48.    The  problem  of  impact  assessment  concerns  the  effectiveness of
coercive  economic  measures.    Impact  assessment  has  to   differentiate
between:

  (a)  The costs for the imposing State and the distribution of such costs;

  (b)    The  negative  economic  impact   on  the  target  State  (economic
effectiveness);

  (c)    The  enforced  policy  changes   in  the  target  State  (political
effectiveness).

49.  The costs for the sender State and the distribution of such costs  form
part of  the political process  leading to the  decision to impose  coercive
economic measures.  Different domestic interest groups (commercial  interest
groups,  non-governmental  groups  pursuing  specific  political  objectives
etc.) try  to influence  the policy  decision-making process.   This  offers
opportunities for mobilizing  opposition to the application of  illegitimate
coercive  economic measures.   It is  also necessary  to distinguish between
coercive economic  measures  that are  imposed  by  an executive  branch  of
government and those  measures that require  approval by  legislative bodies
in the  sender State.   The  negative economic  impact on  the target  State
depends on a  variety of  factors, such  as the magnitude  and scope of  the
imposed coercive economic measures, the relative  size of the target  vis-a-
vis the sender State  (i.e., the degree of  economic autonomy of  the target
State), and the availability of alternative  economic options for the target
State in  terms of access to  markets, capital,  technology and investments.
The  meeting  agreed  that  further  analytical  work  will  be  required to
operationalize the concept of economic impact  assessment. This will have to
include the  elaboration  of specific  indicator  systems,  as well  as  the
analysis of  the relationship  between the  magnitude and  scope of  imposed
measures,   specific  variables   and   their  negative   economic   impact.
Differentiation will also  be required  between short, medium and  long-term
impact,  depending on  the duration  of  imposed  measures.   Structural and
sectoral distortions  will have to be identified.  The  degree of compliance
with   government-imposed   restrictions  on   the  part   of  transnational
corporations will also be an important factor.

50.    The meeting  questioned  some  of  the  basic assumptions  concerning
political impact,  such as  the assumption that  coercive economic  measures
have a negative  economic impact.  The  negative economic impact is  assumed
to  cause  tensions  that  translate directly  into  political  pressure and
enforce  changes in objectionable  policies.   In reality,  the mechanism is
much more complex and ambiguous.   The meeting stressed that the translation
of a negative economic  impact into policy changes depends very much on  the
nature of the political regime in the target State.

51.  There can be  either a unifying effect ("rallying around the flag")  or
a  strengthening   of  internal  opposition,   depending  on  the   concrete
circumstances of individual cases.  Another  consideration is the effect  of
coercive  economic  measures  on  vulnerable  groups  in target  States  and
whether  there are  options  for specifically  targeting  coercive  economic
measures  on the  policy makers  in target States.   These  problems require
further case-studies and  empirical analysis. The judgement of economic  and
political impact involves both qualitative and quantitative assessments.


D.  Institutional issues/follow-up

52.   The meeting  agreed  that the  problem of  coercive economic  measures
merits  increased attention  by  multilateral  bodies.   Within  the  United
Nations, intergovernmental deliberations  should be supported by  analytical
and  monitoring  capacities   in  the  United  Nations  Secretariat.     The
analytical  work should be focused on the refinement of applicable norms and
criteria, and  on the  methodology for  impact assessment.   The  monitoring
function  will   require  effective  information-gathering  and   assessment
methods, as  well as  effective cooperation and  coordination among  various
United  Nations  intergovernmental bodies  and units  of the  United Nations
Secretariat, based on clearly defined mandates.

Notes

  1/   Report of the  World Conference on  Human Rights,  Vienna, 14-25 June
1993 (A/CONF.157/24 (Part I), chap. III); see, in particular, para. 31.

  2/    See   The  Results  of  the  Uruguay  Round  of  Multilateral  Trade
Negotiations:  The Legal Texts (Geneva, GATT secretariat, 1994), p. 485.

  3/  See  International Legal Materials,  vol. 14,  No. 4  (July 1975),  p.
1292; see also A/36/597.

  4/  United Nations, Treaty Series, vol. 119, No. 1609, p. 3.
ANNEX

List of experts invited to an expert group meeting on
coercive economic measures a/


  Professor David CORTRIGHT (United States of America)

  Dr. Alberto Franco MEJIA (Costa Rica)

  Professor Deepak NAYYAR (India)

  Professor Raymo VAYRYNEN (Finland)


-----________________________

  a/    Participants also  included  representatives  of the  Department for
Economic  and Social  Information  and Policy  Analysis,  the  Department of
Political Affairs,  the Office  of Legal Affairs  and the  Centre for  Human
Rights,  of  the  United Nations  Secretariat;  and  representatives of  the
United Nations Conference on Trade and Development.
  


 

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Date last posted: 18 December 1999 16:30:10
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