Sanctions are a form of punishment that can have a significant impact on a country’s growth and stability, with their effects extending beyond the targeted areas. In this article, we will address how the scrutiny of politics promotes technology. So, let’s talk sanctions and workarounds.
- The reasons for imposing sanctions could be violations of international law, and nuclear proliferation, among others.
- Countries have found ways to legally go around sanctions, but these methods can have negative consequences and may be viewed as a violation of the spirit of the sanctions.
Deprivation is often seen as the mother of innovation, and when it comes to sanctions, this phrase is especially true.
Sanctions are to countries what grounding is to children. Punishment for breaking the rules. Besides the scale, the difference here is that these sanctions often hit key pillars of a country’s growth and stability. However, some countries do manage to legally go around the sanctions. That said, the one thing that takes virtually irreparable damage is the currency and its standing on the global stage.
SANCTIONS and Workarounds
Either individual countries or international organizations, such as the United Nations (UN) can impose sanctions. The details vary depending on the imposing party.
- Violating International Law: engaging in aggressive military actions, supporting terrorism, or committing human rights abuses.
- Nuclear Proliferation: violating international agreements related to nuclear materials, such as the Non-Proliferation Treaty.
- Economic Policies: engaging in unfair trade practices or manipulating their currency to gain a competitive advantage.
- Other Reasons: violating arms embargoes or engaging in cyberattacks.
Sanctions and WORKAROUNDS
Not to be deterred, countries always manage to find some sort of legal workaround. I’d like to point out, however, that despite their legality, these methods could have negative consequences. The global stage even views some as a violation of the spirit of the sanctions. The following are some methods used in recent history.
- Using Intermediaries: Using shell companies or third-party countries, to carry out transactions otherwise prohibited by the sanctions. Back in January, The Economist reported “that the new “shadow” shipping and financing infrastructure is robust and extensive.” In reference to Russia.
- Bartering: bartering or making trade deals with other countries to obtain goods or services otherwise unattainable. In August 2022, Business Insider reported that the Taliban were in talks with Russia regarding the trade of Russian crude oil products for Afghan produce.
- Cryptocurrencies: using crypto to bypass sanctions and facilitate transactions beyond the traditional banking system. In August of last year, Reuters reported that Iran made its first official import order, worth about $10 million, through crypto, circumventing U.S. sanctions that had crippled the economy.
- Exploiting Loopholes: looking for loopholes in the sanctions’ regime, such as exemptions for humanitarian goods, to legally acquire goods or services otherwise prohibited. Back in February, The Guardian reported that Shell, the oil company, and Vitol the energy trader, were accused of exploiting a “loophole” in the regime to bring Russian-derived products into Europe through Turkey, thus prolonging the Ukraine-Russia war.
While sanctions significantly impact a country, they greatly devalue a country’s currency and damage its standing on the global stage. The devaluation of a currency has serious consequences, including inflation and decreased purchasing power. The damage to a country’s reputation can also impact its ability to trade with other countries in the future. But fear not, there’s always a way to get out of trouble. Some countries have mastered sanctions and workarounds.
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