ETHICS IN CORPORATE SOCIETY

Ethics Report
THE ETHICS OF SANCTIONS

12/4/2012

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Contents
Executive summary:...................................................................................................................................... 3
INTRODUCTION ........................................................................................................................................ 7
MARK AMSTUTZS JUST SANCTIONS DOCTRINE........................................................................... 11
HANS KOCHLERS THEORY ON THE ETHICS OF SANCTIONS: .................................................... 12
LITERATURE REVIEW: .......................................................................................................................... 16
Health and human rights concerns in Haiti............................................................................................. 16
THE ETHICS OF SANCTIONS ON IRAN:..................................................................................................... 19
THE ETHICS OF SANCTIONS ON IRAQ:..................................................................................................... 24
LITRETURE REVIEW: CORPORATIONS ..................................................................................................... 28
ANALYSIS: ................................................................................................................................................ 32
HAITI:....................................................................................................................................................... 32
Ethical Analysis Iran: .............................................................................................................................. 33
Ethical Analysis of the Sanctions imposed on Iraq: .............................................................................. 35
CORPORATIONS:..................................................................................................................................... 36
CONCLUSION ........................................................................................................................................... 38
REFERENCES ........................................................................................................................................... 40
APPENDIX ................................................................................................................................................. 41

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Executive summary:
Our report on the ethics of sanctions raises the fundamental question does international peace
take precedence over individual human rights?. Our report comprises of an introduction and
analysis of the two relevant theories present regarding sanction, those are Mark Amstutz Just
Doctrine Sanctions and Hans kochlers theory on the ethics of sanctions. Our report is entirely
based on secondary research. We have divided our report into two dimensions.

Firstly we have focused our attention on sanctions which are applied directly to countries. We
have critically analyzed sanctions placed on Iraq directly after the gulf war, on Iran which are
still present, and on Haiti which were present between 1991-1994. The second part of our report
is based on the organizational aspect of sanctions. How sanctions imposed on countries affect the
corporations currently operational or have trade relations with the concerned country. For this
part we have analyzed how the sanctions placed on Iran and Iraq affected corporations such as
SCB (standard chartered bank).

In both analysis we have evaluated the utilitarian approach to sanctions and how it is criticized
by the Kantian approach of the categorical imperative and rawls principle of justice. And finally
we have given our own conclusion about the ethics of sanctions and whether they are justified or
not.

Amstutz theory on Just Doctrine sanctions core aspects are the seven norms that form the theory,
they are:

1. Just cause
2. Right intention
3. Limited objectives
4. Last resort
5. Probability of success
6. Discrimination

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 7. Proportionality

He claims that sanctions are only fair and Just when they follow these seven principles.

Hans Kochler, in his theory about the ethics of sanctions, argues that sanctions are only ethical
when they are looked into from the utilitarian approach of ethics, and they are typically coercive
in nature. He states that sanctions violates the fundamental human rights awarded to each
individual, written in the UN charter chapter VIII article 55. Here he explains that Article 41 of
the charter, which states that if a country becomes a threat to international peace, the use of
sanctions is termed legitimate and is used as the last resort to military force, comes into conflict
with article 55 if the charter. So the question arises does international peace hold precedence
over individual human rights? . kochler is vehement in his decision that individual human rights
are the supreme rights granted to each citizen of the world and all other rights come under human
rights. He also says that sanctions become unethical because innocent civilians have to pay for
the decisions made by a few members of the government of their country. The difference
between multilateral and unilateral sanctions is also given in the theory, and lastly sanctions with
regard to international law are given where kochler argues that the sanctions placed on Haiti and
Iraq severely abused international law doctrines. Therefore kochler believes that sanctions are
unethical.

In our literature review we focused our studies on Iran, Iraq and Haiti.

Our literature on Haiti was done on the research conducted by Elizabeth Gibbons and Richard
Garfield. Where they presented an ethnographic account of the turmoil in Haiti after the
imposition of economic sanctions by the U.S.A and OAS regarding the military coup which
overtook jean aristides government and created a de facto government in Haiti.

Human rights interventions saw the impostion of sanction on Haiti, it effected the economy of
the country by creating widespread unemployment, black market jobs, decline in industry
production, increase in oil prices. People survived mostly on remittances provided to them, and
fled to rural areas of the country for shelter.

Most schools were closed during the calendar year of 1992-93 and education was at a standstill,
families had to send their children to school in turns, the system of restaveks was re introduced
to the country, these were children who were given food, shelter and education in exchange for
household work done for others.

A USAID survey concluded that 21% of the population in Haiti was malnourished and this rate
was increasing year by year.

A shortage in transport meant an increase in prices, especially on vaccines. This breakdown in

immunization programs caused the measles epidemic. Water output declined from 50% to 30%
since the embargo. And the average life expectancy of Haitians had decreased by 2.4 years.

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Our next focus of concern was Iran where sanctions were started since 1987 on the claims that
Iran was involved in terrorist activities. It continued with the Iran sanctions Act in 1996 where
the USA banned oil exports and oil development in Iran. And in 1997, all trade investments were
revoked. Recent sanctions on Iran have been imposed on the claim that Iran is following a
nuclear development program to make weapons of mass destruction.

The effect of these sanctions have adversely affected Irans economy. The oil and gas sector has
been severely sanctioned by the US. Irans financial sector has also been hit hard by the
sanctions imposed. At least 8 iranian banks are on the US sanctions list. Therefore it is becoming
increasingly difficult for Iranian banks to make international transactions.

Because of an internal dispute, a war broke out between Kuwait and Iraq in 1990. That war was named
the Gulf War. Eventually, Iraq invaded Kuwait and took hold of its natural resources including the oil
wells. Kuwait was declared another province of Iraq and was brought under direct control of Saddam
Hussein. As a reaction to that, U.N imposed sanctions on Iraq that went on for 13 years, ending on the
Iraq War, 2003. Although Kuwait was freed from Iraqi invasion after 7 months, in February 1991, with a
war code named as Operation Desert Storm. Even though a cease fire had been reached, U.S did not
remove the sanctions on the country and stopped U.N from removing them through Veto Vote.

The sanctions were put on International Trade with Iraq for all the member countries of the U.N.
Although, on paper, the objectives of these sanctions were different, it was implied that the U.S wants a
toppling of the Saddam Hussein led government. These sanctions led to the death of 500,000 children
under 5 because of malnutrition, and the suffering of a whole Nation for 13 years. They were deprived
of the basic amenities of life, including clothing, education and food. An ethical analysis of these
sanctions proves that they were highly unethical and were targeted at the population, even though they
did not achieve their ultimate goal of toppling the government even after 13 years. It was an
international governance failure for both the United States and the United Nations, who, instead of
taking a direct action, made the whole Iraqi population suffer for 13 long years.

Shifting our paradigm of focus to corporations. with the advent of various international bodies,
including united nations, world trade organization, European Union, south Asian association for
regional cooperation and many others, nation states have been subjected to economic and trade
sanctions in the event of acts against their own or global community

These sanctions are based on boycott activity, communism, transition to democracy,

environmental protectionism, expropriation, harboring war criminals, e.t.c.

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The United nations has imposed sanctions on entities such as Iraq reinsurance company,rafidain
bank, MIDCO financials, Aviatrans anstalts e.t.c.

Most of these were associated with the management of Iraqi regime assets or were involved with
the North Korean nuclear program. They are targeted specifically in order to punish them for
their support for Iraqi and Korean actions

One major case of the US imposition of sanctions on major corporations was the recent payment
by ING of $619m to settle sanctions case. The company is said to be the
latest global financial institution to settle allegations that it broke US sanctions law. According to
news reports Authorities alleged that ING illegally concealed information that would have
identified Iranian and Cuban clients. The schemes involved billions of dollars, the US
Department of Justice claimed and the banks offices in Curacao, the Netherlands, Belgium,
France and Romania.

Other instances where businesses have been targeted for economic sanctions and fines include,
the British banking giant Standard Chartered which was accused of exposing the US to
terrorists and weapon dealers by hiding $250 billion (160 billion) worth of transactions with
the Iranian government and Hong Kong Electronics, a front for a north Korean regime
corporation.

Through the literature present, we have analysed these cases according to the ethical standpoints
that were provided to us through utilitarian, Kantian, lockess principle of liberty and Rawls
rights of justice.

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INTRODUCTION

IS IT ETHICAL FOR INTERNATIONAL REGULATORY BODIES AND SOVEREIGN

NATIONS TO IMPOSE SANCTION & STOP PRIVATE ENTERPRISES FROM
OPERATING IN STATES THAT HAVE OPPOSING AGENDAS, IDEOLOGIES AND
PRACTICES?

Pope John Paul II, in his address to the Vatican Diplomatic Corp in 1995 summed up his views
of sanctions as follows:

'In today's interdependent world, a whole network of exchanges is forcing nations to live
together, whether they like it or not. But there is a need to pass from simply living together
to partnership. Isolation is no longer appropriate. The embargo in particular, clearly
defined by law, is an instrument which needs to be used with great discernment, and it
must be subjected to strict legal and ethical criteria. It is a means of exerting pressure on
governments which have violated the international code of good conduct and of causing
them to reconsider their choices. But in a sense it is also an act of force and, as certain cases
of the present moment demonstrate, it inflicts grave hardships upon the people of the
countries at which it is aimed. I often receive appeals for help from individuals suffering
from confinement and extreme poverty. Here I would like to remind you who are
diplomats that, before imposing such measures, it is always imperative to foresee the
humanitarian consequences of sanctions, without failing to respect the just proportion that
such measures should have in relation to the very evil which they are meant to remedy.

Economic sanctions, as defined by Collins English Dictionary Complete and Unabridged, is

any action taken by one nation or group of nations to harm the economy of another nation
or group, often to force a political change. As evident from the above mentioned definition,
economic sanctions may not be a result of purely economic reasons but includes cultural, social,
political and religious factors that all contribute towards the decision of imposition of these
sanctions. Economic sanctions include barriers on trade, import duties and tariff charges.

In this report, we will look to examine the ethical theories regarding sanctions which include
theorists like Mark Amstutz and Hans kochler. The report will also look at different cases
regarding individual states and corporation in an attempt to identify whether these economic

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sanctions hold moral and ethical ground or is their imposition a way for a few mighty to
dominate the rest of the world.

The ethical theories which will be discussed include such popular theories like the Just
Sanctions Doctrine. The theory is important as it deals within the broader framework of justice
and fairness. It is explained as a: framework for analyzing the justice of whether to use
sanctions and the justice of how to apply them. Other ethical theories will also be linked to
these two major ones in order to analyze the topic and come to a conclusion.

The report is divided into four major sections. An explanation of the ethical theories and their
relevance to the topic is discussed next, which is followed by the literature review and an
analysis of the theories. Lastly, an attempt has been made to draw a conclusion based on the
analysis.

The biggest question that arises in this report is that does international peace hold precedence
over individual human rights? And we intend to explore and answer that question.

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 Target country Period Type of sanctions
Rhodesia 1968-1979 Comprehensive
economic sanctions,
financial sanctions,
diplomatic sanc-tions
South Africa 1977-1994 Arms embargo
Iraq 1990 Comprehensive
economic sanctions,
suspension of clearing
system, arms embargo,
ban on air-freight
Successor States of Yugoslavia 1992-1996 Arms embargo, setting-
up of ad-hoc tribunal to
try crimes against inter-
national law
Federal Republic of Yugoslavia 1992-1996 Comprehensive
(Serbia and Montenegro) economic sanctions, ban
on service-sector
business, sporting and
cultural sanctions, ban
on air traffic
Somalia 1992- Arms embargo
Libya 1992- Arms embargo,
suspension of air traffic,
diplomatic sanctions,
freezing of foreign bank-
accounts, partial em-
bargo
Liberia 1992- Arms embargo
Haiti 1993-1994 Oil and arms embargo,
freezing of foreign bank-
accounts
Angola (UNITA) 1993- Oil and arms embargo,
travel re-strictions, ban
on air-travel, closure of
offices abroad
Rwanda 1994-(1995: sus-pension Arms embargo, setting-
for Rwan-dan up of ad-hoc tribunal to
government) try crimes against inter-
national law

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 Sudan 1996- Reduction in number of
diplomatic missions,
travel restrictions for go-
vernment and military,
suspension of air traffic
(date from which
effective not yet
determined)
(Kulessa & Starck, 1998)

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MARK AMSTUTZS JUST SANCTIONS DOCTRINE
Mark Amstutzs theory about the ethical and moral consideration of economic sanctions is an
integral part of this report as it explores the Just Sanctions Doctrine. The doctrines importance
in analyzing the ethical question of international economic sanctions is immense. It has been
used by various high profile international theorists to analyze and achieve conclusions on
instances including the sanctions with respect to gulf war, Iraq, Afghanistan and South Africa.

The doctrine includes seven norms that form the basis of the theory. The first of these is Just
cause, which states that the objectives of the economic sanctions must be just.
According to Amstutz, the objectives of any economic sanction are as important as the
consequences that follow. Moreover, for the sanctions to be held as ethical, the imposing bodies
must provide clear and factual cause for the imposition of sanctions. Amstutzs doctrine has
Right intention as the second norm. This states that sanctions are only ethical if imposed with
the intention of promoting just policies and structure.

The third norm regarding the doctrine is that a sanction is only ethical if it aims at rectifying only
those actions, behaviors and institutions that are unjust or evil. Thus, a sanctions objective
should be limited towards the reformation of only those behaviors that may be unhealthy for the
society and therefore, sanctions that have hidden political motives cannot be regarded as ethical.
This norm is called Limited objectives.

The norm regarding last resort is self explanatory. This suggests that in order for a sanction to
be truly ethical, it has to be of the nature of a last resort. It has to be taken only after every
measure of diplomacy and dialogue has failed. Even then, a sanction cannot be held as ethical if
it is extreme in nature and has not been preceded by less coercive ones. For instance, an
outright ban on all exports on a responsible nation may not be ethical when a partial ban on its
trade or other measures might have been effective.

Probability of success is another norm that has to be taken into consideration while analyzing
the ethical nature of any sanction. Economic sanctions need to have a reasonable chance of
success and should not be enacted to merely fulfill an international norm or to alienate the target
state to such a point where the unjust practices prosper.

Another norm is stated as Discrimination which explains that economic sanctions result in
certain economic hardships on the target state. However the ethical nature of any sanction comes
into question if it imposes economic hardship directly on innocent civilians. the extent of this
directness is a major problem regarding this norm.

The last norm is Proportionality. This states that the benefit that may arise out of imposing
an economic sanction must be proportional to the hardship that it causes on the target state. The
sanctioning body should thus examine thoroughly, before the imposition of any sanctions,
whether their actions may result in more benefit to the target state or less.

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HANS KOCHLERS THEORY ON THE ETHICS OF SANCTIONS:

General view of sanctions:

According to Hans Kochler, sanctions viewed are viewed directly in line with general ethical
principles such as the utilitarian approach which states that actions that provide the maximum
utility for the entire society should be followed. Kochler argues that these sanctions are coercive
in nature.

Public awareness of these sanctions started since the wake of the gulf-war in 1991. They are
described as the last resort before the use of military force. The charter regarding the threat of
peace is determined arbitrarily by the security council itself. Sanctions are treated as
countermeasures to law breaking, and legal obligations that can withhold sanctions are deemed
invalid. Two factors determine the ethical evaluation of these measures :

a) whether the economic sanctions are partial or comprehensive.

b) the special economic conditions of the country subject to these sanctions.

The two types of economic sanctions are categorized as

1.) Unilateral sanctions.

2.) Multilateral sanctions.

Sanctions are termed as normative priority in international law. Evaluating the UN charter on
economic sanctions provided in chapter VII. It is apparent that peace assumes priority over
human rights. According to the security council charter- human rights violations are a threat to
peace itself.

Comprehensive sanctions need to be analyzed from an ethical standpoint before a normative

evaluation of the international law can be undertaken. Sanction seem to be classical
instruments for including submission in the power politics of the so called new world order.
Coercive sanctions represent a form of collective punishment. Do not comply with the ethical
principle of individual responsibility. The fundamental problem here is that they punish innocent
people for the acts and decision making of their government. The aim of these sanctions is to
restrain governments course of action by deliberately harming the civilian population. Punishing
the innocent is an immoral act per se and cannot be justified by any form of the utilitarian
principle. According to Thomas Aquinas and the utilitarian approach, the intention is important
when judging an unethical act.

Morally permissible acts contain four provisions:

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 1. The intended final end must be good.
2. The intended means to it must be morally justifiable
3. The foreseen bad shot must not be intended.
4. The good end must be proportionate to the bad upshot.

The problematic nature of this utilitarian context of evaluation is plain to view. Are those who
suffer under a certain measure to be viewed sympathetically as the victims of the pursuit of a
good intention, or is their suffering to be regarded as the deliberate component of a strategy?
This debate seems merely to invite hypocritical casuistry. The outcome for the affected
population is one and the same.

The doctrine of double effect is applied here which states that only good things can come from
inflicting harm on other people. Comprehensive economic sanctions, then continuing with the
comparison above have the ethical quality of terror bombings: the civilian population is
explicitly taken hostage in the framework of a security strategy of power politics. It is self-
evident that this kind of political instrumentalization of the human being as the citizen of a
community that is a subject in international law is not compatible with his status as an
autonomous subject, i.e. with human dignity.

The good that comes out of these sanctions according to UN charter chapter 8, the wrong that
comes with it is the suffering of innocent civilians, which includes sickness and death. According
to quins analysis, the nature of the good must be seen with the wrong that comes with it, gives
example of terror bombing and strategic bombing. One is directly inflicted which is unethical,
the other is indirectly inflicted, economic sanctions are llike terror bombing, they are directly
inflicted.

The civilian population is taken hostage this is not compatible with the autonomous subject:
human dignity, people have a natural right not to suffer for the policies of people who they have
no control of.

The doctrine of double effect criticizes the utilitarian approach to maximize utility, in this case
peace, could sacrifice the health and prosperity of people. Economic sanctions cause the civilian
population to be held hostage in its own country. Measures such as those which explicitly intend
to harm the population are to be judged as amoral, for "one cannot intentionally cripple an
economy without intentionally affecting the people whose working and consuming lives are
partially constitutive of that economy."

Sanctions within the normative system of international law:

Current doctrine of international law proposes that human rights constitute the jus cogens of
international law.The charters phrasing in context to human rights includes no reference to
human rights considerations. Security threats to international peace are sometimes concocted
by power politics i.e: US sanction of Haiti.

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 It is upto socio philosophical experts to break down the taboo of power politics and to impose
the rights of humans declared in international law and to break down the fallacies in
international law to save human rights and to downgrade power politics.

Human rights constitute the normative foundation of every legal system. International peace
should come under, and should be a norm of human rights. A general interpretation of the
charter must be taken into consideration with regards to international law.

This must be done according to 3 sections, in view of their compatibility not only with the
Charter's human rights goals, but more importantly with the jus cogens of general
international law. On the other hand (2), we must analyze the sanctions policy with regard to
specific instruments of international law, such as conventions and treaties. Finally (3), we
must apply by analogy the generally recognized principles of international humanitarian law
to the area of sanctions; our central concerns here are the unity and consistency of the
normative system in international law, without which the sanctions policy would lose its
legitimacy.

Concerning collective and individual responsibility in domestic and international law:

Jean cocambeau in his work on the theory of non-military coercive forces typifies the
international laws on sanctions and the forces that accompany them. He disregards the ethical
aspects of sanctions in connection with the affected country, rather he talks about the
suffering of neighboring countries. In connection with Art. 50 of the UN Charter, he
describes the existence of a legal obligation regarding the neighboring states affected by the
sanctions

Boutros ghali, in his 5th book addresses the ethical problems of sanctions for the first time.

Konrad ginther has proposed a theory for the responsibility of international organizations
under international law, kochler disputes the theory because ginther disregards the security
councils duty for peace and security.

With regard to the postulated universality, Ginther formulates a fictitious principle which can
only be taken cynically by the population whose human rights are affected by the sanctions:
"the measure adopted by the organisation in conformity with its Charter is always to be
regarded as being in the interest of the affected state." Ginther seems not to have considered
what consequences this formulation could have for the escalation of coercive economic
measures, for the maxim he proposes instrumentalizes the rights of the civilian population
(i.e., their human rights) for the benefit of an abstract state; this maxim thereby runs counter
to a central area of the jus cogens of general international law. From a formal standpoint,
Ginther correctly concludes from the universal nature of the United Nations Organisation that

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 "the organisation alone, to the exclusion of a subsidiary liability of the member states, is
responsible for the consequences resulting from a violation of rights by one of its
organs." This general statement is problematic, however, with regard to the privileged
position of the permanent members of the Security Council, for these members can steer a
resolution in a particular direction by means of their right to veto.

We are thus forced to acknowledge that the current theory of international law completely
overlooks issues of human rights and issues of liability closely connected with the latter

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LITERATURE REVIEW:

Health and human rights concerns in Haiti

Authors: Elizabeth gibbons, MA and Richard Garfield, DrPH, RN

This report examined the impact of an economic embargo imposed on Haiti, between 1991-1994
on health, well being and human rights in Haiti.

Data from surveillance systems of health records, diseases contracted and nutrition along with
interviews with the people who were affected, combined with survey data from government and
non- government organizations was recorded.

The Findings:

After jean Bertrand aristide was ousted in a military coup in Haiti in September 1991, economic
sanctions were placed by the united states against the de facto regime in Haiti. They initially
froze Haitian government assets in the united states and later expanded to include prohibition of
most imports and exports, restriction on commercial flights and freeze on arms and oil
shipments.

Multilateral economic sanctions are associated with decline in health and welfare in cuba, Iraq,
former Yugoslavia, Burundi and Nicaragua. Sanctions should be imposed in a way that prevents
unnecessary suffering. This report analyses the human impacts of the sanctions placed on Haiti.
Data from national survielance systems and humanitarian organizations was collected and
special studies and health, income, welfare and morality were conducted before, during and after
the imposition of these sanctions.

The economic impact:

The embargo imposed on Haiti was associated with the loss of 29780 jobs in Haitian industries.
The no. of workers in the assembly section declined from 40000 in 1990 to 8000 in 1994, the no.
of garment factories operational, declined from 145 to 44. A quarter of a million Haitians lost
their primary source of income. This affected 15% of haitis population. The embargo also
resulted in a major rise in imports. Oil prices surged which also impacted food imports which
were not part of the embargo, they were affected because of the lack of vessels entering Haiti
caused delays. After 1993 food could not be inspected, hence it was turned back. The embargo
also prevented the export of $15 million of cocoa and coffee, $12 million of mangoes and $4
million of essential oils.

Survival strategies:

80% of people who lived in port-au-prince were affected first, most fled to rural villages because
farming families were able to provide more food and during the time of the sanctions, more aid

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was provided to the rural areas. Remittances constituted as a major source of income for the
people, it was done through direct and indirect channels, they provided income to some 77560
people of low income households. To raise income, many people sold personal assets like
utensils, jewelery and property. In poor urban areas, families even sold tables and chairs. To
compensate for the sale in assets and property, families moved in together. Some households
held 3 or more people per room. Informal sector employment such as food preparation, tailoring,
barbering, shoe polishing e.t.c became the economic refuge for workers. In 1993 39% of men
and 29% of women were working in the informal sector. The middle class became non-existent.

Some Haitians became involved in contraband activities such as sale of kerosene and back
market gasoline and even prostitution. Quality and quantity of products decreased, especially
food products.

Education:

After the coup, most private schools closed for 6 months, violence and the embargo closed the
schools for another 2 months causing the academic year of 1992-93 to come to a standstill. Gross
enrollment fell from 83% to 57% in 1994. Families sent their children to schools in turns. The
withdrawal of foreign aid for education (as education was considered developmental and did not
require humanitarian intervention) resulted in a pass rate of only 7%.

Because of the increased poverty, families were forced to resort to traditional practices of
sending their children to domesticated homes where in return for the work they provided, they
were given food, shelter and education. They were called restaveks. 75 % of these were girls
as boys were preferred to sending to school as they were seen as the bread winners and the future
of the families. Children not in school were often left unattended. UNICEF estimated that the
no. of street children rose to 4000 in 1994. The population incarcerated children with charges of
burglary, murder and drug use, which were much more serious than previous years.

Nutrition:

prior to the coup, calorie consumption was about 80- 90%, after it, health conditions severely
started to deteriorate. 21% of the population was considered severely malnourished. According
to the 1994-95 USAID financed demographic and health survey, 7.8% of children under the
age of 5 years had acute malnutrition, compared with 3.4% in the 1990 survey. An important
reason for this was the absence of mothers from home, owning to working for long hours.

Medicines, vaccines and epidemics:

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A shortage of transport meant an increase in prices. Gasoline shortage caused medicine to
become especially expensive. Penicillin and intravenous fluids cost 3 times and acetaminophine
and antihistamines cost 5 times what they had in 1991. This shortage led to a collapse of the
vaccine refrigeration. This breakdown in the immunization programs contributed to a measles
epidemic from .

Water and sanitation:

Drinking water output declined from 50% to 30% in the first 18 months of the embargo. %age of
people who had drinking water in port-au-prince were 35%. Many of the urban poor purchased
their water in water buckets. Most areas were forced to use contaminated sources. In port-au
prince 3.4 million pounds of garbage were produced daily, community organizations appealed to
the media to reduce the miserable situation.

Child Mortality:

A 1994 USAID survey found out that child mortality rose in Haiti to 61 children per 1000.
Average life expectancy of Haitians decreased by 2.4 years during the crisis. It stood at 54.4
years.

Much of the decrease in the infant mortality during the crisis was because of the measles
epidemic, UNICEF accepted the decision against a measles campaign to help the children in
Haiti but still provided such supplies to health centres. By 1994, 400 health institutions had
received essential drugs worth $ 2.3 million and more than 3550 delivieries of more than $4
million.

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THE ETHICS OF SANCTIONS ON IRAN:

In this present day and age getting a hold of the natural resources of the world has become ever
more important for a sustained standard of living. Perhaps the most valuable and scarce resource
among them is of oil. Approximately two thirds of the total oil and gas reserves are possessed by
the Persian gulf and the USA recognizes the importance of getting a foothold in the region.

The one country resisting influence of the United States on their domestic policy is Iran. Iran has
continued to challenge US influence in the region and have therefore been the subject of
perpetual economic sanctions for their hostile behavior. The opposition started with the Iranian
revolution in 1979 when the pro American regime of Shah Muhammad Raza was overthrown by
Ayatollah Khomeni and Iran was declared an Islamic Republic through a national referendum.
Reacting against the revolution, the USA ended its economic and diplomatic ties with Iran,
banned Iranian oil imports and froze approximately $11 billion of its assets. They included $5.6
billion held by overseas branches of US banks. Since then, Iran has endured 33 years of
economic sanctions of the USA but has not changed its security policy.

Early Sanctions after the Revolution

In 1987, the USA, under the presidency of Ronald Reagan imposed sanctions on Iran on
the claim that Tehran supports international terrorism and aggressively acts against
Persian Gulf shipping.
In 1996, the USA prohibited US and foreign oil development investments under the Iran
and Libya Sanctions act which became a law of the USA. In 2006, it was renamed the
Iran Sanctions Act (ISA).
The executive order of 1997 virtually prohibited all trade and investments with Iran.

Recent Sanctions after concerns on WMD plans

Most recently sanctions have been levied on Iran on the pretext that they are following a nuclear
development program to make weapons of mass destruction. It was this same claim that was
used to attack Iraq where no weapons of mass destruction were found after the war. The United
States president back then, George Bush, said in an interview that his biggest regret was the
intelligence failure in Iraq.

Iran has been continuously reiterating that their program of nuclear development is there only for
peaceful purposes and that no weapons of mass destruction will be made from the program. The
International Atomic Energy Agency has been allowed to visit the nuclear sites of Iran and have

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come to a conclusion that Iran might be producing weapons in a hidden site. This has resulted
in a series of economic sanctions on Iran. A timeline of these sanctions are as follows:

December 2006 - After having called on Iran to halt its uranium enrichment programme in July,
the UN Security Council imposes sanctions on Iran's trade in nuclear-related materials and
technology and freezes the assets of individuals and companies involved with nuclear activities.
The sanctions are mainly an effort to curtail Iran's growing nuclear capacity, but while
programmes to enrich uranium were stopped in 2002, they restarted in late 2005.

March 2007 - UN Security Council votes to toughen sanctions by banning all of Irans arms
exports and extending the freeze on assets of those associated with the enrichment programme.
One month later, the EU publishes an expanded list of Iranian individuals and companies
deemed persona non grata in the bloc.

October 2007 - The US announces a raft of new unilateral sanctions against Iran, the toughest
since it first imposed sanctions almost 30 years ago, for "supporting terrorists". The sanctions cut
more than 20 organisations associated to Irans Islamic Revolution Guard Corps from the US
financial system and three state-owned banks.

March 2008 - UN Security Council passes further sanctions, including the monitoring of Iranian
banks and all Iranian cargo planes and ships suspected of carrying previously sanctioned items. It
also extends asset freezes.

June 2010 - UN Security Council imposes fourth round of sanctions against Iran over its nuclear
programme, including tighter financial curbs and an expanded arms embargo. The measures
prohibit Iran from buying heavy weapons such as attack helicopters and missiles.

US Congress imposes new unilateral sanctions targeting Irans energy and banking sectors.
Penalties are instated for firms that supply Iran with refined petroleum products worth over a
certain amount.

May 2011 - US blacklists the 21st Iranian state bank, the Bank of Industry and Mines, for
transactions with previously banned institutions.

August 2010 - EU prohibits the creation of joint ventures with enterprises in Iran engaged in oil
and natural gas industries, as well as the import and export of arms and equipment related to
nuclear activities. The sale, supply, and transfer of equipment and technology used for natural
gas production is also banned.

November 2011 - The US, UK and Canada announce bilateral sanctions on Iran. While the US
expands sanctions to companies that aid Irans oil and petrochemical industrials, the UK
mandates all British financial institutions stop doing business with Iranian counterparts.
20
January 2012 - US imposes sanctions on Iran's central bank, the main clearing-house for its oil
export profits. Iranian in turn threatens close off the transport of oil through the Strait of Hormuz.

The European Union announces an oil embargo on Iran unless it curtails its nuclear programme.

June 2012 - US bans the worlds banks from completing oil transactions with Iran, and exempts
seven major customers - India, South Korea, Malaysia, South Africa, Sri Lanka, Taiwan and
Turkey - from economic sanctions in return for their cutting imports of Iranian oil.

July 2012 - EU ban of Iranian oil exports takes effect.

October 2012 - Iran's rial currency falls to a new record low against the US dollar, having lost
about losing 80 per cent of its value since 2011, which many economists peg as the result of
international sanctions.

EU tightens sanctions on the countrys banking, trade, and energy sectors. The package prohibits
any transactions with Iranian banks and financial institutions and includes an embargo on Iranian
natural gas.

The Effects of Sanctions

The sanctions imposed have adversely affected Irans economy. According to Dean A. DeRosa
and Gary Clyde Hufbauer of the US National Foreign Trade Council, in the medium-term,
lifting US sanctions on Iran would increase Irans total trade annually by as much as $61 billion
(at the 2005 world oil price of $50/bbl), adding 32 percent to Irans GDP. However, Iranian
president Mahmoud Ahmadijenad claimed on 16th February 2011 that these sanctions have had
no effect on Irans economy. However, it is clear to everyone that the sanctions have pulled
down Irans annual GDP.

The oil and gas industry has been severely sanctioned by the USA and the international
community. Iran is currently short on refining capacity. With the ban on foreign investment and
machinery Iran has had to import oil for local consumption. Upto 40 % of the oil is imported by
Iran. This has led to a sharp increase in the local price of oil as major oil companies have all
stopped gasoline sales to Iran. Overall, the sanctions have affected but not crippled the Oil and
gas industry as Iran is still able to buy oil from China and Russia.

Irans financial sector has also been hit hard by the sanctions imposed. Atleast 8 iranian banks
are on the US sanctions list. Therefore it is becoming increasingly difficult for Iranian banks to
make international transactions. With business to Europe and US reduced, businesses and the

21
exchange rate is suffering. The Iranian currency is devaluing causing inflation within the
economy.

Overall, Iran has learnt to live with these sanctions imposed on them. Since the Iranian
Revolution of 1979, these sanctions have been imposed on them one after the other. The
sanctions have not yielded the desired results as more anti-american views are developing among
the citizens of Iran and the government cannot negotiate against the resentment of the people.
However, Iran has allowed the IAEA to inspect their nuclear facilities and they remain suspect
on Irans nuclear program. The IAEA suspect that Iran has the potential to further enrich its
facilities. Even though the sanctions have rocked Iran, the issue of their nuclear program remains
unresolved.

Framework for Ethical Analysis

To do an ethical analysis we must first set up a framework on which to measure the sanctions.
The theories of Utilitarianism, rights, Rawls theory of original position, libertarianism and
justice give us strong fundamentals on which to make our framework. The seven norms that we
are going to analyze in this analysis and their justifications are as follows:

(1) Just cause: The aim of economic sanctions must be just.

Justification: The principle of retributive justice applies to the sanctions. If Iran is doing
something that will adversely affect other people in the world then they should bear the
brunt of their actions. Punishments should be levied on the persons responsible for
causing harm according to the principle of retributive justice.

(2) Right intention: Sanctions are legitimate only if they are imposed to promote just
structures and policies.

Justification: The sanctions should not be imposed for oil or other materialistic objectives.
The purpose should be to solely benefit humanity. This is consistent with Kants principle of
rights where Kant points out that an action carries moral worth if and only if it is done out of
duty and with the rght intentions.

(2) Limited objectives: Sanctions must have limited goals, involving behavioral reform of
only those behaviors and institutions that are unjust and evil.

Jusitification: The objective must be clear and other interests should not be pursued. This is
consistent with the principle of retributive justice.

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 (4) Last resort: The imposition of sanctions must be preceded by other, less-coercive
instruments.

Justification: All humans have certain basic rights that override other less important rights.
The right to live and the right to work override most other rights. Therefore, taking away the
right of live and work should only be used if it is a last resort. This is also consistent with the
libertarian view that life liberty and property of every individual must be safeguarded.
Liberty may only be infringed if there is a threat posed if sanctions are not imposed.

(5) Probability of success: Economic sanctions must have a reasonable chance of success.

Justification: As the economic sanctions are just a source of achieving the final objective of
stopping Irans nuclear campaign, it should only be used if there is surety of the objective
being achieved. Otherwise, it would be a violation of the basic rights of the people of Iran for
no reason.

(6) Discrimination: Economic hardship should not be imposed directly on innocent

civilians.

Justification: This principle is again consistent with the principle of retributive justice
as innocent civilians who have nothing to do with the nuclear enrichment should not be
directly affected by the sanctions.

(7) Proportionality: The good intended from sanctions must be proportional to the harm
inflicted on the target state.

Justification: The utilitarian principle of Cost benefit analysis should be applied to determine
whether the sanctions are worth it. If the sanctions are doing more harm than good then the
sanctions would be considered unethical.

The ethical framework drawn is also consistent with the Rawls principle of original position that
all human beings or countries in this case would agree to this framework if they were in a
position of equality behind a veil of ignorance. The ethical framework may be expanded to
include other elements but we think that these are the most critical in determining the moral
worth of the sanctions imposed by the US on Iran.

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THE ETHICS OF SANCTIONS ON IRAQ:
The Gulf War & Operation Desert Storm.

The history of Gulf War & the sanctions imposed on Iraq after the war, in 1991, presents a case when
disarmament became a priority as compared to the humanitarian concerns. Hundreds of thousands of
people were affected or were snatched of their souls as a result of the war and the sanctions. The only
mission was to see a change in the Iraqi Regime. Still, even after all that was done to the humans living
there, the mission failed in its ultimate goal, the removal of Saddam Hussain from power. What in the
end happened was also a war, one that took place in 2003,which further led to the worsened living
conditions in Iraq. Are these actions of the UN justified by the only aim of disarming Iraq? Before we
look at the ethical aspects of the case, we need to explore more into the history of the war & the
sanctions themselves.

The Gulf War or the First Iraq War (Code named: Operation Desert Storm) started on January 17, 1991
and went on for more than a month; It ended on 28th February. The war was waged by UN Coalition
Force against Iraq & comprised of armies from 34 Nations of the world, led by United States. It was
waged in response of Iraqs invasion in Kuwait.

Iraq began the invasion of Kuwait in August 1990 & kept it

occupied for seven months, before the First Iraqi War began. The
reason for this invasion, as claimed by Saddam Hussain was that
Kuwait was stealing Iraqi petroleum by indulging in Slant Drilling,
a term used to describe the practice in which non-vertical wells are
dug. Iraq claimed that Kuwait is using its land to drill & extract the
petroleum belonging to Iraq. There were several other reasons as
claimed by the historians for this invasion of Kuwait. Among the
reasons explained by the historians are financial issues, hegemony Figure 1: Kuwait's 600 oil wells were set on
fire by Iraq
& a diplomatic row, besides the claim of Slant Drilling.

As a reaction to these issues, Iraq invaded Kuwait and within 2 days, overturned the army of Kuwait,
which was caught by the shock, & soon declared Kuwait as the countrys 19th province. At least 1000
people were killed during the Iraqi occupation of Kuwait. This occupation was condemned at the United
Nations. U.N Security Council passed 12 resolutions asking Iraq for an immediate withdrawal from
Kuwait but Iraq did not pay any heed. Sanctions imposed by U.N & trade embargos by the countries of

24
the World soon began & finally, in the late 1990, America gave an ultimatum to Iraq to withdraw from
Kuwait by 15 January or face a war.

As a result of the failed negotiations between Iraq and other countries supporting Kuwait, U.S led
coalition war began against Iraq, named Operation Desert Storm. Several military establishments of Iraq
were targeted by the Coalition Forces, both at Iraq and at Kuwait. The justification given by the U.S for
involvement in this issue was to protect its ally Saudia Arabia from the possible threat of Iraqi
intervention in Saudia Arabia, which would give Iraq a major control of the Worlds Oil Supplies. U.S
claimed of the Iraqi Armys build up towards the direction of Saudia, which it said it had seen through
satellite images. This claim of the U.S was proved false in the coming years.

It is easy to conclude here that the U.S involvement in this issue was solely to prevent the Arab countries
from slipping in one hand, which U.S feared would give Iraq
more power over U.S itself and its close ally Israel. Using the
platform of United Nations, U.S started the operation against
Iraq. The war began with extensive aerial bombing of Iraq and
Kuwait, which largely damaged the civil and military
infrastructure. Their target was to destroy all the Iraqi anti
aircraft capabilities and the aircrafts belonging to Iraq. Next,
they destroyed the command and communication systems of
Figure 2: The USAF Night Hawk: a key Iraqi Army. After that, they destroyed the Iraqi military
player in Operation Desert Storm
infrastructure, targeting the heavy weapons of Iraq. 130,000
tons of explosives were dropped on the country.

In response to the U.S led attack, Iraq fired missiles on U.S military targets in Saudia Arabia, which was
supporting the war and paid 36 Billion Dollars out of a total of 60 Billion dollars from its own pocket. Iraq
also fired missiles to Israel, killing few and injuring many people. One missile each was fired on both
Qatar and Bahrain. Iraq also attacked and occupied the Saudi city of Khafji, which was later freed by the
combined efforts of Saudi and American Armies.

The aerial attack of the coalition forces was followed by a ground attack, which operated under the
protection of its air supremacy, which had been achieved in the previous days. Coalition Forces had
better trained individuals, army and tank operators, which were capable to destroy the Iraqi ground
forces. U.S also ensured the usage of GPS technology in attacking the Iraqi ground forces, in order to
maximize the damage.

This ground attack was directed towards Kuwait and the target of the Coalition Forces was to free
Kuwait of the Iraqi occupation. Coalition forces faced some resistance because of barbed wires, trenches
and minefields, however, the whole of Kuwait was over ran by the U.S ground forces in the first few
hours. Whole of the Iraqi Army had surrendered except for a few with whom the battle took place. On
27th February, Saddam Hussain ordered a retreat from Kuwait and U.S president George W.H Bush
declared the country as liberated. Before leaving Kuwait, Iraqi forces put on fire the 737 oil wells located
in Kuwait and built land mines around them to make the fire extinguishing process difficult. Retreating

25
armies were extensively bombed by the U.S led coalition forces, so much that the highway between
Kuwait and Iraq was later called the Highway of Death. However, fighting was carried out inside Iraq
too, leading to death and captures for the Iraqis. After efforts from Soviet Union and U.N, a ceasefire
was declared by the then U.S president Bush. Saddam Hussain was allowed to stay in power of the
country.

Sanctions against Iraq

As a reaction to the Gulf War and Iraqs occupation of Kuwait in 1990, sanctions were imposed
on the country by the United Nations Security Council, which had put a total trade and financial
embargo on the country. The sanctions began four days after Iraqs invasion of Kuwait and
stayed largely in force until the Iraq War in 2003. The purpose of these sanctions was to force
Iraq to withdraw from Kuwait. After the Gulf War, these sanctions took a change and were
linked to the presence and elimination of Weapons of Mass Destruction.
The goal of these sanctions, as expressed, was to eliminate the MWDs as well as extended range
ballistic missiles, decreased support for terrorism and repaying of all international debts.
However, analysts have proved that the ultimate goal of these sanctions was to topple the
Saddam Hussein led regime, as expressed in the Iraq Liberation Act of 1998. United Nations not
only forced the imposition of these sanctions through the U.N, but also planted attempts to topple
the Saddam Hussain led government by the insiders, more importantly the Kurds. U.S had
believed that by imposing these sanctions and making the life uncomfortable for the people, it
would encourage the Iraqi people to remove Saddam Hussein from power. Throughout the
1990s, U.S spent over $100m to support Insurrections & Coup Attempts in the Saddam led
Government. (Invisible War, Joy Gordon)
Boris Kondoch, in his research The limits of Economic Sanctions under International Law: A
Case of Iraq has written that following were the objectives to put up these sanctions:
a) to bring the invasion and occupation of Kuwait by Iraq to an end,
b) to restore the sovereignty, independence, and territorial integrity of Kuwait,
c) to restore the authority of the legitimate government of Kuwait, and
d) to protect the assets of the legitimate government of Kuwait.

However, according to him, after the successful ceasefire between Iraq and the U.S, the sanctions
were continued with the following objectives:

a) The respect for the inviolability of the border between Iraq and Kuwait,
b) The demarcation of the boundary between Iraq and Kuwait,
c) The deployment of United Nations observer unit to monitor the Khor Abdullah and the
demilitarized zone,
d) The destruction, removal or rendering harmless, under international supervision, of all
weapons of mass destruction and ballistic missiles with a range greater than 150 kilometers.
e) Liability for any direct loss, including environmental damages due to the annexation.
f) The repatriation of all Kuwaiti and third country nationals,
g) The requirement not to commit or support international terrorism, and
h) The return of all property seized by Iraq

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(Boris Kondoch)

Joy Gordon has named these sanctions as an Invisible War by the U.S against Iraq. She called
the imposition of these sanctions as a U.S failure in terms of international governance. Even with
these sanctions, Saddam Hussein remained in the government and the only thing happened was
that Iraq was pushed to a Pre-industrial Age, as one U.N official describes. According to her,
U.N presence only ensured the legalization of the atrocity led by the U.S.
Following Sanctions were imposed by the U.N Security Council on Iraq, in its Resolution 661:
1) Limitations on Imports: All the imports into Iraq were evaluated on an individual basis,
rather than a list compiled of banned import goods.
2) Limitations on the Exports: A limit was put on the countrys oil exports with the
condition that the revenue generated through export of Oil would primarily be used to
meet the Food needs of the Iraqi people. Following was the proportion of expenditure for
the revenue generated:
72% allocation to Humanitarian Programme (food and other basics)
25% allocation to Compensation Fund for War Reparation Payments.
2.2% for U.N Administrative and Operational costs in the country.
0.8% for weapons inspection programme. (wikipedia)
No complete list of goods banned from importing in Iraq was given by the U.S, however,
imports of educational and clothing stuff were intercepted and barred from entry to Iraq. A
Multinational Interception Force was organized and led by U.S to intercept & inspect vessels,
cargoes and crews suspect of carrying freight to and from Iraq. Such actions of the U.S have
been condemned by almost all the humanitarian writers.
These sanctions of the U.S and U.N led to very high rates of malnutrition, lack of medical
supplies and diseases from lack of clean water. Unicef estimates that the number of children who
died under the age of 5 was 500,000 and this was because of malnutrition. Because of the
damage to the Water Sewage and Treatment Plants, epidemics of Cholera and Typhoid had
spread out throughout Iraq. The budget of Iraqi Government was reduced by 90%, undermining
its ability to provide basic services. Iraq had been importing 70% of its food and because of the
sanctions, it could not do so.

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LITRETURE REVIEW: CORPORATIONS

The nature of ethics as applied to the economic sanctions have been discussed in many scholarly
articles and since the gulf war, has been the focus of many international theorists and analysts.
The focus of many writers has been on the objectives and consequences of economic sanctions
on nations. They have conducted studies and analyzed cases ranging from economic sanctions on
Iran, Syria and Iraq to the effects that the sanctions have on overall society. Some theorists
however have realized the importance of corporations and multinationals for any nations
economy. And with the increasing importance attributed to the concept of globalization, the
ethics of economic sanctions are becoming increasingly relevant.

The traditional realist paradigm holds that the sovereign nation-state is the principal political and
legal unit in the world community. However, with the advent of various international bodies,
including united nations, world trade organization, European Union, south Asian association for
regional cooperation and many others, nation states have been subjected to economic and trade
sanctions in the event of acts against their own or global community. Nation states like USA are
also imposers of economic sanctions.

The USA Engage website lists the following reasons as to the USAs reasons for imposition of
unilateral economic sanctions on various countries over the years:

Boycott activity
Communism
Transition to democracy
Environmental activity
Expropriation
Harboring war criminals
Human rights
Market reform
Military aggression
Narcotics activity
Proliferation of weapons of mass destruction
Terrorism
Workers rights

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The United Nations and individual countries have imposed sanctions for some of these reasons
as well. Although the United Nations Security Council imposed sanctions only twice between
1945 and 1990, it has done so 11 more times since 1990. Yet this statistic pales alongside the
number of times the United States has imposed sanctions, in concert with other nations or
unilaterally. The United States has been the most prominent practitioner of peace time
restrictions on trade and other economic transactions since World War II, having targeted 35
countries for sanctions just between 1993 and 1996. It even currently imposes some kind of
sanction on more than 70 countries, including some countries that are supposedly allies,
including Canada and Mexico (McGee, 2002).

The united nation sanctions require all member states to adhere to the actions required by
resolutions passed by the UN. One of those is the UNs list of entities Established pursuant to
Security Council resolution 1483 (2003), which includes business entities like

1. IRAQ REINSURANCE COMPANY

2. RAFIDAIN BANK
3. ARAB WOOD MANUFACTURING COMPANY
4. AUTOMOBILE STATE ENTERPRISE
5. T.M.G. ENGINEERING LIMITED
6. ALFA COMPANY LIMITED FOR INTERNATIONAL TRADING AND
MARKETING
7. MIDCO FINANCIAL, S.A
8. MONTANA MANAGEMENT, INC
9. AVIATRANS ANSTALT
10. GREEN PINE ASSOCIATED CORPORATION
11. HONG KONG ELECTRONICS
12. KOREA RYONBONG GENERAL CORPORATION
13. TANCHON COMMERCIAL BANK
14. NAMCHONGANG TRADING CORPORATION
Most of these were associated with the management of Iraqi regime assets or were involved with
the North Korean nuclear program. They are targeted specifically in order to punish them for
their support for Iraqi and Korean actions. As such, they have been denied their right to continue
operations legally in the UN member states and their assets have been frozen. Such actions have
been considered excessively stringent and the UN has made attempts to find other measures in
order to apply pressure on a State or entity to comply with the objectives set by the Security
Council without resorting to the use of force. On the UN website, we find note of this points
relevance to the international body:

At the same time, a great number of States and humanitarian organizations have
expressed concerns at the possible adverse impact of sanctions on the most vulnerable
segments of the population. Concerns have also been expressed at the negative impact
sanctions can have on the economy of third countries.

29
In response to these concerns, relevant Security Council decisions have reflected a more
refined approach to the design, application and implementation of mandatory sanctions.
These refinements have included measures targeted at specific actors, as well as
humanitarian exceptions embodied in Security Council resolutions. Targeted sanctions, for
instance, can involve the freezing of assets and blocking the financial transactions of
political elites or entities whose behavior triggered sanctions in the first place. Recently,
smart sanctions have been applied to conflict diamonds in African countries, where wars
have been funded in part by the trade of illicit diamonds for arms and related materiel.

As part of its commitment to ensure that fair and clear procedures exist for placing
individuals and entities on sanctions lists and for removing them, as well as for granting
humanitarian exemptions, the Security Council, on 19 December 2006, adopted resolution
1730 (2006) by which the Council requested the Secretary-General to establish within the
Secretariat (Security Council Subsidiary Organs Branch), a focal point to receive de-listing
requests and perform the tasks described in the annex to that resolution. The Security
Council took another significant step in this regard by establishing, by its resolution 1904
(2009) the Office of the Ombudsperson.

On 17 April 2000, the members of the Security Council established, on a temporary basis,
the Informal Working Group on General Issues of Sanctions to develop general
recommendations on how to improve the effectiveness of United Nations sanctions. In 2006
the Working Group submitted its report to the Security Council (S/2006/997), which
contained recommendations and best practices on how to improve sanctions.

The above mentioned information regarding UN economic sanction ethical perspective is

important to understand the objections raised by corporations on ethical grounds about their right
to maintain business relationship even with rogue states and regimes. Recent instances of
economic sanctions include the sanctions on 3 North Korean companies. The international
regulatory body also ordered all countries to freeze assets pertaining to these companies. All 3,
Green Pine Associated Corporation, the Amroggang Development Banking Corporation and The
Korea Heungjin Trading Company were state-owned companies reputed to be involved in
financing, exporting and procuring weapons.

The US Treasury and Commerce Departments administer the primary US economic

sanctions. Both departments administer far-reaching and ever-changing extraterritorial
restrictions that govern the activities of US firms and their overseas affiliates as well as those of
wholly non-US companies.

Through its Office of Foreign Assets Control (OFAC), the Treasury Department administers
comprehensive trade and investment embargoes against Cuba under authority provided by the
Trading with the Enemy Act (TWEA),6 and against Iran, Iraq, Libya, Sudan, Afghanistan and the

30
Federal Republic of Yugoslavia (including Serbia, but not Kosovo or Montenegro) under the
International Emergency Economic Powers Act (IEEPA).

One major case of the US imposition of sanctions on major corporations was the recent payment
by ING of $619m to settle sanctions case. The company is said to be the
latest global financial institution to settle allegations that it broke US sanctions law. It is reported
that Credit Suisse and Lloyds paid $536m and $350m, respectively, to resolve separate cases in
2009. Barclays settled in 2010 for $298m.

According to news reports Authorities alleged that ING illegally concealed information that
would have identified Iranian and Cuban clients. The schemes involved billions of dollars, the
US Department of Justice claimed and the banks offices in Curacao, the Netherlands, Belgium,
France and Romania.

The ethical stance in such instances is heavily debated. While in this case, as the company has
agreed to its actions being illegal and has settled by the payment of a fine, ethicists have
questioned whether the original decree maintaining a sanction against a particular country is
moral or not. The major concern is still the fact that whether ethical theories like utilitarian
principles or Immanuel Kants theories of rights can justify such sanctions. The theory by Mark
Amstutz is mostly attributed to explaining economic sanctions on nation state but could also be
used in order to understand the ethical perceptions regarding the economic sanctions.

Other instances where businesses have been targeted for economic sanctions and fines include,
the British banking giant Standard Chartered which was accused of exposing the US to
terrorists and weapon dealers by hiding $250 billion (160 billion) worth of transactions with
the Iranian government and Hong Kong Electronics, a front for a north Korean regime
corporation. The former, one of the top five largest banks in the UK by market value, kept
around 60,000 transactions secret from US regulators over nearly 10 years, the New York State
Department of Financial Services claimed. Eventually, it had to settle by agreeing to pay $340
million to a New York regulator. The bank still hasn't admitted wrongdoing and the managers
maintained that the original decision by the US government regarding Iranian actions was based
on their ulterior motives. It is yet again an example of ethical perceptions shaping moral attitudes
and behavior.

In a unique recent case the U.S. offshore drilling regulator formally issued sanctions
against BP and the major contractors involved in the explosion on the Deepwater Horizon rig.
The company has already agreed to pay $4.5bn (2.8bn) over the fatal explosion of its rig and
the catastrophic oil spill in the Gulf of Mexico in April 2010. Even after that, the Officials at the
Environmental Protection Agency are considering whether to bar BP from receiving government
contracts, a move that would ultimately cost the company billions in revenue and could end its
drilling in federally controlled oil fields. Over the past 10 years, BP has paid tens of millions of
dollars in fines and been implicated in four separate instances of criminal misconduct that could

31
have prompted this far more serious action. This is an example of regulatory bodies using both
fines and complete bans on a certain segment of the market for the criminal conduct exhibited.
The example may be one of those that can be fully justifiable by all of the theories regarding
ethical behaviors according to the ethic of care.

ANALYSIS:

HAITI:

The economic embargo on Haiti was always criticized as porous and ineffective. Nonetheless it
reduced education, employment, affected health and nutrition. And also hindered haitis attempt
to start a democracy. The impoverishment imposed by the embargo provoked social dislocation,
reducing child care and feeding. Increasing womens economic burdens and encouraging
breakdowns of family structures.

The Haitian experience is another example of the conflict provided in the UN charter, article 41
in which the security council is able to impose sanctions in the interest of international peace and
security. And artice 55 where the Un is charged with promoting higher standards of living, social
progress, solution to health problems, educational cooperation and respect for fundamental
human rights. The distinction between neutrality and impartiality was not clear to humanitarian
agencies, which were compelled to support sanctions whose very existence represented a
partisan position.

The international community and many humanitarian organizations chose to sacrifice respect for
haitis economic and social rights and chose to promote political and civil rights. A more closer
look would suggest that the OAS embargo which wanted to promote human rights in Haiti, was
inadvertently a major violator of childrens rights to health and education. Child deaths were
reported to stand at 1000 per month. Beyond mortality changes, damages were done to nutrition,
education and child rearing practices. Through sanctions, the international community
unintentionally added to chronic human rights violations stemming from under development and
gross violations from the Haitian military. These sanctions were designed and implemented
without respect for protecting the right to work, education and to a decent standard of living, to
live with family and the freedom of servitude. All these rights are mentioned in the treaties and
conventions signed by the UN.

32
The impact of the sanctions was felt even after they were over, the economy had not recovered,
education was at a standstill, un-employment was increasing. It was only the will of the Haitian
people to regain democracy, that they endured these sanctions.

According to the utilitarian approach which was championed by Jeremy bentham and john stuart
mills, the sanctions imposed on Haiti did serve its purpose as the maximum utility was provided
as the good out wieghed the bad for the entire international community. But from a domestic
standpoint, even the utlitarians would agree that these sanctions inflicted more harm on the
Haitians than good.

Kantian theory of the categorical imperative criticizes these sanctions because they used the
people of Haiti as a means to their end, rather than using them as the end for their purpose. The
Haitians were merely used as bait to serve the purpose of the international community.

Access to basic life amenities such as food, clean water and proper clothes is a moral and a
natural right of every human. Denying a whole population an access to these basics is a clear
violation of the rights-based ethical principles. Not only was the population denied of these
basics, they were denied of basic health and other facilities too. This proves the unethical nature
of these sanctions

Ethical Analysis Iran:

The aim of the economic sanctions seems to only be for the combined security of the gulf region.
But a very important point that we are missing here is that Israel is also part of this region and
Israel is being supplied with countless supplies of weapons from the United States. The hidden
agenda behind the sanctions which is apparent to most historians following the pattern of politics
of this Middle Eastern region is of domination. Iran does not want that to occur and is therefore
not backing down on its nuclear program. Secondly, Iran is claiming that its nuclear program is
there only for energy generation purposes and there has been no substantial proof of there being
any other activity. Therefore the cause, intentions and objectives of the sanctions are
questionable given the recent exploits of US and Israel on muslim countries in the region.

33
The last resort norm affirms that less coercive ways of negotiations should be used and that
sanctions should only be imposed if it is the last resort. There should be secret diplomacy,
speeches and public condemnations before any sanctions or military operation.

The US sanctions against Iran do not follow the above order of events. Since 33 years, Iran has
been under sanctions from the USA. There has been no considerable effort made to engage Iran
in diplomacy as the US delegation in the UN leave when Iranian representatives are about to
speak. This attitude has lowered the trust levels of Iran and they have subsequently lost trust in
the USA. Secondly, the sanctions give the impression that they are permanent as there is no
clause of when they will be removed. The US may still claim that this was the last resort but
facts show another story.

The probability of success of the sanctions is very low. The reason being that Iran is an
autocratic country with a supreme leader therefore public opinion counts for little. Secondly,
sanctions are most effective when applied to minor issues. If the aim of sanctions is to force
major changes then countries are likely to resist them. Thirdly, Iran may view their nuclear
enrichment program as their only line of defence against the western imperialist crusade of the
Middle East. Therefore, to protect the sanctity of Iran nuclear enrichment may be seen as the last
resort.

Moreover, as discussed in the framework, economic sanctions should not be imposed directly on
civilians. The US sanctions have imposed a trade embargo, established an extra-territorial ban on
Iranian oil, frozen assets of key IRGC elites and individuals related to Irans nuclear program,
and have prohibited financial relationships with Iranian banks. The Iranian citizens have been
directly targeted as the economy is totally dependent on oil. This may lead to widespread
unemployment within Iran.

As for the utilitarian analysis, the utility that we attach to security perhaps outweighs the
disutility of the economic sanctions thereby making the sanctions morally correct.

Lastly, if we analyze the situation from Rawls argument of there being a veil of ignorance and
all the nations being in a region of equality, sanctions should be imposed on all nuclear countries.
These double standards of making a nuclear program and being the first and only country to also
use it while not allowing others to make such a program would surely be rejected by the majority
of countries in that position. Therefore, sanctions would only be seen as ethical if the US also
gave up their nuclear program along with all other nuclear states. Secondly, if we assume that the
claim by the Iranian government of pursing the program for peaceful purposes is true, then the
sanctions are completely unethical and have no moral worth.

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Ethical Analysis of the Sanctions imposed on Iraq:
The situation in which Iraq was plunged on imposition of these sanctions is described with a
shock and horror that most would feel in the face of such enormous and gratuitous human
suffering (Joy Gordon). According to her, by substituting the post-war objectives of the
sanctions imposed on Iraq, United States fundamentally compromised the legality of the
sanctions & the legitimacy of the U.N Security Council.
Utilitarian Analysis of the Sanctions:
Utilitarian philosophers advocate maximizing utility for the maximum number of people. They
argue that anything that does not maximize utility is unethical. In case of these sanctions
imposed on Iraq, this principle is quite applicable. We are not going to do a cost benefit analysis
of the situation, but we will look at what the world thought of these sanctions, based on their
analysis of the situation. In this case, cost was those 500,000 or more children under 5 who died
and would not have had there not been the sanctions, millions who suffered, 70% of the Iraqi
women who were anemic & so on. On the benefit side, we just have the prevention of weapons
of mass destruction, which we are not even aware if Iraq was going to build or not. Clearly, the
cost of these sanctions was very high as compared to the benefits, if any. It was highly unethical
of the U.N & the U.S to impose these sanctions on Iraq.

Rights-based Analysis:
Access to basic life amenities such as food, clean water and proper clothes is a moral and a
natural right of every human. Denying a whole population an access to these basics is a clear
violation of the rights-based ethical principles. Not only was the population denied of these
basics, they were denied of basic health and other facilities too. This proves the unethical nature
of these sanctions.

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Justice:
To do a judicial analysis of these sanctions, we can look at the case of the countries that found
the sanctions unjust and called for their removal. All the permanent members of the U.N Security
Council opposed the continuation of the policies of imposing sanctions on Iraq. Majority of the
U.N member Nations opposed the continuation of these sanctions, but still, the usage of U.S
reverse veto led to the continuation of these sanctions. It is highly unjust for the U.N to ignore
the voice to the majority and continue the sanctions policy just for the sake of one country who
opposes the continuation by using its Veto Power.

Let me conclude by saying that the humanitarian situation in Iraq poses a serious moral
dilemma for this Organization. The United Nations has always been on the side of the
vulnerable and the weak, and has always sought to relieve suffering, yet here we are
accused of causing suffering to an entire population. We are in danger of losing the
argument, or the propaganda war - if we havent already lost it - about who is responsible
for this situation in Iraq President Saddam Hussein or the United Nations. - Kofi Annan
CORPORATIONS:
Ethicists have conducted various statistical studies that have tried to measure the success of
economic sanctions. Hufbauer et al. (1990a, 1990b) did a major study that analyzed the
effectiveness of sanctions. The study included many countries and several decades. The
conclusion was that sanctions are usually a failure in terms of altering the target countrys
behavior in the right direction. Aside from being failures most of the time, economic sanctions
often have major unintended consequences. One major example of the unintended consequences
of economic sanctions is the attack on the World Trade Center on 11 September 2001. Such
consequences provide a simple spectrum in which to view these sanctions. The
consequentialist theorists claim that the consequences of one's conduct are the ultimate basis for
any judgment about the rightness of that conduct. Thus, from a consequentialist standpoint, a
morally right act (or omission) is one that will produce a good outcome or consequence. As the
study mentioned above and the notion of unintended negative consequences suggests, economic
sanctions have higher costs than benefits.

This brings us to the Utilitarian ethics which begins with the premise that an action is good if the
good outweighs the bad. Stated differently, an action is ethical if it results in the greatest good
for the greatest number. Nearly all economists subscribe to utilitarian ethics. The whole sub-field
of welfare economics is imbued with utilitarian ethics. Nearly all ethicists connected to these
economic sanctions have pointed out that sanction achieve little in terms of an attitude
readjustment and thus only ends up punishing a regime or an entity overall stakeholders that
continue to feel the burn of the criminal or aggressors behavior. Even when it does, it remains
unethical as to the utilitarian concept as the net costs are higher than the net gains. Thus disutility
is the norm of these sanctions.

An example can be made regarding Iraqi or Iranian companies or entities working with them
being sanctioned. A utilitarian can argue that although the imposition of sanctions may lead to a

36
better behavior but the cost that is businesses like SCB losing accounts in millions and having to
stop transactions worth billions. The oil price surge can affect all 6 billion people of the world
while only a few companies prosper. Worst still are the human rights violations indirectly and
the destruction of small and medium businesses in the region. A National Association of
Manufacturers study found that sanctions imposed between 1993 and 1996 cut off export
markets worth $790 billion (NAM, n.d.). This study found that in the four years covered by the
study, the USA enacted 61 laws and executive actions authorizing unilateral sanctions against 35
countries having a total population of 2.3 billion people. A report by the Council on
Competitiveness (1994) estimated that eight sanctions cost US businesses $6 billion in lost sales
and 120,000 jobs. The overall net disutility would render this sanction as unethical.

Mark Amstutz theory of Just Sanctions Doctrine mentions Probability of success and
Proportionality as 2 major factors in determining the ethicality of any sanctions. With
regards to businesses the proportionality of the fines or the frozen of assets have been
questioned time and again. Complete ban for state owned companies in countries like Iran
and Korea may also be deemed unethical as it does not prevent a major policy shift and the
problem eventually had to be talked about at various political avenues.

The teachings of Immanuel Kant are also important to understand the ethical nature of
economic sanctions. His theory revolves around an individuals rights. A rights-based ethic
takes the position that an action is bad if someones rights are violated, regardless of whether the
good outweighs the bad. What is wrong prima facie does not become right just because some
majority ultimately benefits. A major advantage of a rights-based ethic is that there is no need to
calculate total gains and compare them with total losses. It is impossible to precisely measure
gains and losses anyway. A rights-based ethic removes this problem. The only thing that needs to
be determined is whether someones rights would be violated.

The matter is further complicated, however, because there are two different kinds of rights,
negative rights and positive rights. Negative rights include the right not to have your property
taken from you without your consent and the right not to be killed. One attribute of negative
rights is that they do not conflict. My right to property does not conflict with your right to
property. My right to life does not conflict with your right to life. Positive rights have different
attributes from negative rights. Examples of positive rights include the right to free or low-cost
medical care and the right to free primary education.

The kind of rights we need to look at when we are trying to determine whether a particular
sanction is justified is negative rights. We must ask ourselves the question: Are anyones
negative rights to life, property, contract, etc. violated by this sanction? If the answer is yes,
then the sanction cannot be justified. That being the case, one can easily conclude that the vast
majority of sanctions cannot be justified on ethical grounds because someones rights are almost
certainly violated. If even one willing buyer is prevented from buying what he wants from
whomever he wants, rights are violated. But what is more likely is that the rights of thousands, or

37
even millions, are violated by economic sanctions. Companies like those mentioned above have
been deprived of trading with the sanctioned countries. Worst still, the free consent of customers
have been jeopardized as they have been subjected to limited choices even in a more or less free
market with limited government intrusion as is the case in USA and Europe. More than a
hundred thousand children were reported to have died in Iraq because of UN sanctions in that
country. For them, as consumers, the economic sanctions have not only nullified the human right
for economic prosperity but a basic human right of life. Kants principle can also be applied to
arrive at an unethical nature of these economic sanctions as companies are no longer permitted to
compete in specific market that leads to a loss of right for accumulation of prospective wealth.

CONCLUSION
The case of sanctions with regards to its ethical nature has been discussed in the various case
studies and articles that have been mentioned above on Haiti, Iran, Iraq and corporations. The
ethical dilemma is in the question that does international peace supercede individual human
rights and other financial rights embodied by the United Nations Charter. The theories of Kant
and utilitarian philosophers like bentham and mills, along with the ethicists that set out the basic
guidelines for economic sanctions like Hans Kochler and Mark Amstutz are instrumental in
understanding how to tackle the issue of sanctions.

We divided our literature in two divisions, they were the ethics of sanctions imposed on
countries, where we discussed and analysed the sanctions on Iraq, Iran and Haiti. And the ethics
of sanctions on corporations where we analysed the sanctions placed on ING, SCB and BP who
did not meet the stringent conditions posed by the United Nations security council. Through our
findings we found that most, if not all of these sanctions were deemed unethical according to the
ethical philosophers and theorists perspective.

They violated kants rights of human dignity and freedom, the people who suffered did not act
autonomously, rather they acted heternomously. All of the civilians in each case, were used as a
means to achieving the end rather than they being the end itself. The autonomous will of the
people was discarded, i.e: human dignity.

According to the utilitarian theory these sanctions imposed disutility where the cost of these
sanctions outweighed the benefits.

Access to basic life amenities such as food, clean water and proper clothes is a moral and a
natural right of every human. Denying a whole population an access to these basics is a clear
violation of the rights-based ethical principles. Not only was the population denied of these
38
basics, they were denied of basic health and other facilities too. This proves the unethical nature
of these sanctions in Haiti and Iraq.

According to Kochler, morally permissible acts require 4 conditions:

The intended final end must be good, the means must be justifiable, the forseen upshot should be
greater than the bad shot ,and it should be proportionate. These sanctions did not satisfy any of
the conditions hence according to Kochler, these sanctions were morally unjustified.

Amstutz 7 doctrines of just war sanctions, when applied to most of these cases also prove that
these sanctions were unethical and immoral. 5 of his 7 doctrines were not followed in these
sanctions which included proportionality, limited objectives, probability of success,
discrimination and right intention.

However, as in the case of every analysis, we found out that some sanctions were deemed to be
ethical, most notably the sanctions imposed on BP and the major contractors involved in the
explosion on the Deepwater Horizon rig. The company has already agreed to pay $4.5bn
(2.8bn) over the fatal explosion of its rig and the catastrophic oil spill in the Gulf of Mexico in
April 2010. Even after that, the Officials at the Environmental Protection Agency are considering
whether to bar BP from receiving government contracts, a move that would ultimately cost the
company billions in revenue and could end its drilling in federally controlled oil fields. Over the
past 10 years, BP has paid tens of millions of dollars in fines and been implicated in four
separate instances of criminal misconduct that could have prompted this far more serious action.
This is an example of regulatory bodies using both fines and complete bans on a certain segment
of the market for the criminal conduct exhibited. The example may be one of those that can be
fully justifiable by all of the theories regarding ethical behaviors according to the ethic of care.

Keeping in mind all the theories presented above and our own analysis of every case we have
come to the conclusion that the sanctions imposed on countries and corporations alike are
deemed to be unethical in nature. Individual human rights form the basis of all ethical theories
and perspectives and every other right is formed under the umbrella of human rights. The right to
international peace cannot take precedence at the expense of human rights. Human dignity,
freedom and autonomy are rights afforded to everyone from the cradle to the grave. Peace cannot
be given preference over the sanctity of human life and dignity. These sanctions are a form of
coercion and destroy the freedom that individuals possess. We believe that john lockes theory of
natural rights to life and property give the perfect explanation of how these sanctions are
unethical.

Hence we have come to the conclusion that in most cases sanctions should be deemed unethical.

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REFERENCES
http://www.thefreedictionary.com/economic+sanctions

http://www.e-ir.info/2007/12/22/are-sanctions-an-appropriate-tool-for-coercion-in-international-
politics-why-2/.

http://www.worlddialogue.org/content.php?id=98

http://prn.fm/2012/08/03/stephen-lendman-illegitimate-sanctions-iran/#axzz2CYgRxhiu

http://www.ethicsandboards.com/node/52156

http://warisacrime.org/content/unresolved-iran-nuclear-talks

http://www.law.stetson.edu/lawreview/media/no-panacrea-analyzing-sanctions-before-
imposition.pdf

http://economistsview.typepad.com/economistsview/2006/10/can_wto_trade_s.html

http://www.pbs.org/wnet/religionandethics/episodes/by-topic/human-rights/the-ethics-of-
sanctions/7016/

http://www.crosscurrents.org/gordon.htm

https://www.google.com.pk/search?hl=en&as_q=Mark+amstutz&as_epq=International+Ethics&
as_oq=&as_eq=&as_nlo=&as_nhi=&lr=&cr=&as_qdr=all&as_sitesearch=&as_occt=any&safe=
off&tbs=&as_filetype=pdf&as_rights

http://www1.american.edu/ted/haiti.htm

http://www.jamesdenselow.com/book/review-of-invisible-war-by-joy-gordon
http://www.casi.org.uk/info/kondoch01.pdf
http://www.e-ir.info/2012/08/15/an-ethical-analysis-of-the-modern-sanctions-regime-against-iran

40
http://i-p-o.org/sanctp.htm
http://en.wikipedia.org/wiki/Sanctions_against_Iraq
http://en.wikipedia.org/wiki/Gulf_War
http://en.wikipedia.org/wiki/Invasion_of_Kuwait
http://en.wikipedia.org/wiki/Slant_drilling

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1508819/?page=5

APPENDIX
CHAPTER VII: ACTION WITH RESPECT TO THREATS TO THE PEACE,
BREACHES OF THE PEACE, AND ACTS OF AGGRESSION

Article 39

The Security Council shall determine the existence of any threat to the peace, breach of the
peace, or act of aggression and shall make recommendations, or decide what measures shall be
taken in accordance with Articles 41 and 42, to maintain or restore international peace and
security.

Article 40

In order to prevent an aggravation of the situation, the Security Council may, before making the
recommendations or deciding upon the measures provided for in Article 39, call upon the parties
concerned to comply with such provisional measures as it deems necessary or desirable. Such
provisional measures shall be without prejudice to the rights, claims, or position of the parties
concerned. The Security Council shall duly take account of failure to comply with such
provisional measures.

Article 41

The Security Council may decide what measures not involving the use of armed force are to be
employed to give effect to its decisions, and it may call upon the Members of the United Nations
to apply such measures. These may include complete or partial interruption of economic
relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and
the severance of diplomatic relations.

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Article 42

Should the Security Council consider that measures provided for in Article 41 would be
inadequate or have proved to be inadequate, it may take such action by air, sea, or land forces as
may be necessary to maintain or restore international peace and security. Such action may
include demonstrations, blockade, and other operations by air, sea, or land forces of Members of
the United Nations.

Article 43

All Members of the United Nations, in order to contribute to the maintenance of international
peace and security, undertake to make available to the Security Council, on its call and in
accordance with a special agreement or agreements, armed forces, assistance, and facilities,
including rights of passage, necessary for the purpose of maintaining international peace and
security.

Such agreement or agreements shall govern the numbers and types of forces, their degree of
readiness and general location, and the nature of the facilities and assistance to be provided.

The agreement or agreements shall be negotiated as soon as possible on the initiative of the
Security Council. They shall be concluded between the Security Council and Members or
between the Security Council and groups of Members and shall be subject to ratification by the
signatory states in accordance with their respective constitutional processes.

With a view to the creation of conditions of stability and well-being which are necessary for
peaceful and friendly relations among nations based on respect for the principle of equal rights
and self-determination of peoples, the United Nations shall promote:

higher standards of living, full employment, and conditions of economic and social progress and
development;

solutions of international economic, social, health, and related problems; and international
cultural and educational cooperation; and

universal respect for, and observance of, human rights and fundamental freedoms for all without
distinction as to race, sex, language, or religion.

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