30 Nov 2020
External Publications

Extraterritorial sanctions on trade and investments and European responses

Recent US measures directed against Iran, Cuba and Russia (North Stream 2) have become indirectly  a  critical  challenge  for  the  European  Union  as  well.  As  they  purport to deter economic actors under EU jurisdiction from engaging with target countries,  they  have  an  important  extraterritorial  dimension,  which  affects  EU  business and individuals and ultimately the sovereignty of the EU and its Member States.  A  review  of  the  existing  sanction  regimes  and  of  the  geopolitical  context  reveals  that  other  international  players  and  the  PR  China  in  particular  may  follow  suit  in  using  such  measures.  The  study  shows  that  extraterritorial  sanctions  have  important  economic  implications,  particularly  for  the  EU  and  its  vulnerabilities.  Extraterritorial  sanctions  also  raise  critical  questions  as  to  their  legality  under  general international law, WTO law and other specific international rules. The EU is especially  affected  by  these  measures  and  has  taken  some  measures  already  in  response. These could be improved and additional measures could be taken, as the policy recommendations set out.

This paper was requested by the European Parliament's Committee on International Trade.


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