What are sanctions and their effect on the air cargo industry?

What types of sanctions are there?

Sanctions can take many forms and may target specific economic, political, and social topics. They generally fall into one or more of six categories¹:

• Economic sanctions
• Diplomatic sanctions
• Military sanctions
• Sports sanctions
• Individual sanctions
• Environmental sanctions

Economic sanctions are commercial and financial penalties that typically ban or restrict trade and financial relations with the sanctioned party. They can include the levying of import duties on goods, restricting the export of particular goods from a certain country, or blocking certain harbors or airports.

Diplomatic sanctions are political measures that express disapproval of the policies or actions of a particular country. They usually serve the purpose of reinforcing a commitment to a behavioral norm, such as respect for human rights or opposition to proliferation. Such sanctions generally involve measures to reduce or remove diplomatic ties, such as closing embassies, pulling back ambassadors, or canceling high-level government meetings. Diplomatic sanctions are usually taken before economic sanctions or military steps. Military sanctions involve the intervention and deployment of armed forces and are only used in extraordinary situations such as the invasion of an allied country or a direct assault on national security.

Sports sanctions prevent a country’s athletes from competing in international events. Sanctions on individuals, sometimes used by the UNSC, are usually targeted toward political leaders or leading economic figures, such as important political figures and oligarchs in present-day Russia. Freezing such an individual’s assets or imposing travel bans on that person are common examples of individual sanctions.

Sanctions on the environment are relatively new, but steadily gaining ground in several regions such as the EU and certain Latin American countries. Environmental sanctions are usually imposed on countries or companies that allow the trafficking of endangered species or fail to comply with environmental laws.

Understanding sanctions as an air cargo carrier

Sanctions, export controls, regulatory fines, and other crucial data are publicly available, but most of the time not in one place. They may also be spread across several languages and data architectures. But violating them can result in hefty fines, disruption, and even jail time, so it’s vital to understand the rules.

Airlines must manage a number of embargoes. These apply to country restrictions, customs restrictions, aircraft limitations, ground handling agent limitations, and more. Embargoes can be temporary or permanent, and restrictions may impact inbound, outbound, or transit movements. Of particular relevance for airlines are the related regulations imposed by the United Nations (UN), European Union (EU) and United States (US)².

Finally, airlines must also be vigilant to identify dual-use items. These items include software and technology which can be used for both civil and military purposes such as goods that can be utilized for non-explosive uses and to assist in any way in the manufacture of nuclear weapons or other nuclear explosive devices.

How to keep up?

Be Informed’s International Trade & Transport Compliance Solution (ITTS) helps air cargo carriers achieve and demonstrate compliance with sanctions and international trade, transport, and financing regulations. ITTS enables organizations to automatically check trade and transport transactions for potential compliance issues such as sanctions against a specific country. The air cargo compliance solution also supports staff in resolving problematic transactions, while automatically building an audit trail that delivers the necessary evidence to regulators.

Would you like to know more about sanctions and the benefits of ITTS? Then feel free to contact us! We would be happy to make your acquaintance