Why governments put trade controls in place, how they work for importers and exporters, and how traders can apply for a licence.
Sanctions and embargoes are political trade restrictions put in place against target countries with the aim of maintaining or restoring international peace and security. This guide explains how sanctions and embargoes work and how they affect importers and exporters in international trade.
This guide also explains why and how governments put trade controls in place, and details the different types of sanctions and embargoes. It contains an overview of the laws of export control and shows how traders can apply for a licence to import or export their goods. It is important that traders keep up to date with legislation, so sources of further help are also given.
For details about specific destinations see Current arms embargoes and restrictions.
What are sanctions and embargoes?
Sanctions and embargoes are political trade tools, mainly put in place by the United Nations (UN) and the European Union (EU).
The main aim of all UN sanctions and embargoes, as set out in the UN Charter, is to implement decisions by its Security Council to maintain or restore international peace and security.
The EU imposes sanctions and embargoes to further its Common Foreign and Security Policy (CFSP) objectives. The EU can impose measures to preserve peace and strengthen international security, promote international co-operation, and safeguard the common values and security of the EU. EU measures can also be imposed to uphold respect for human rights, democracy and the rule of law.
In addition to UN and EU sanctions, sanctions and embargoes may be put in place by the Organisation for Security and Co-operation in Europe, who can also impose national arms embargoes.
Why impose sanctions?
Sanctions, including economic sanctions, are put in place for a number of reasons. All recent UN and EU sanctions contain information as to why they have been imposed and specify what their aim is. Their principal purpose is usually to change the behaviour of the target country’s regimes, individuals or groups in a direction which will improve the situation in that country.
The ultimate objective of a sanction varies according to the situation. For instance, an arms embargo and a ban on the export of certain items or raw materials could be aimed at supporting a peace process and restricting the financing of weapons by the combatants. Sanctions may also be aimed at preventing weapons from falling into the wrong hands, disrupting terrorist operations, or trying to change the policies and actions of the target.
Types of sanctions and embargoes
When a sanction or embargo is set, the UK follows international procedure to put it in place in British law.
The UN Security Council imposes sanctions through Security Council Resolutions. The EU acts on these by adopting a Common Position and where appropriate, an EU regulation directly applicable to member states is introduced. Where sanctions and embargo measures require more than administrative action to implement them, the UK introduces new or amends existing secondary licensing and enforcement legislation.
The most frequently applied measures are:
- embargoes on exporting or supplying arms and associated technical assistance, training and financing
- a ban on exporting equipment that might be used for internal repression
- financial sanctions on individuals in government, government bodies and associated companies, or terrorist groups and individuals associated with those groups
- travel bans on named individuals
- bans on imports of raw materials or goods from the sanctions target
Other measures may be applied according to individual circumstances.
All sanctions and embargo regimes are targeted. A ‘targeted’ restriction is focused on individual people or organisations. In some cases, a comprehensive restriction is put in place against a particular country’s regime. Sanctions can also be targeted at a particular industry, such as banning the supply of petroleum and related products.
Putting sanctions and embargoes into practice
The Foreign & Commonwealth Office (FCO) has overall responsibility for the UK’s policy on sanctions and embargoes.
These embargoes are generally imposed by the UN or EU on “‘arms and related material”’ (such as military ammunition, weapons and goods). The UK typically interprets this as covering all goods and technologies on the UK Military List. Goods that are not specifically listed, might also need a licence under the Military End-Use Control. Controls on the supply of military items between another third country and the sanctions target (trafficking and brokering) also apply.
Certain specific sanctions are imposed on dual-use goods such as petrochemicals or telecommunications items.
The key regulator for exporting and trading in controlled strategic goods (military and dual-use) and also the administration of licensable goods subject to arms embargoes is the Export Control Organisation (ECO). The ECO forms part of the Department for Business, Innovation and Skills (BIS). Read an overview of the Export Control Organisation.
Some sanctions contain import bans. There are currently import bans on certain goods originating or shipped from Iran and Syria. Read more information on import controls.
Financial sanctions measures can vary from the comprehensive – prohibiting the transfer of funds to a sanctioned country and freezing the assets of a government, the corporate entities and residents of the target country – to targeted asset freezes on individuals/entities. Financial sanctions may apply to individuals, entities and governments, who may be resident in the UK or abroad.
A targeted asset freeze usually:
- prohibits anyone from dealing with the funds or economic resources belonging to or owned, held or controlled by a designated person
- prohibits anyone from making funds or economic resources available, directly or indirectly, to, or for the benefit of, a designated person
Certain financial sanctions may also prohibit providing or performing other financial services, such as insurance, to designated individuals or governments.
It is a criminal offence to breach a financial sanction, without an appropriate licence or authorisation from HM Treasury.
HM Treasury is responsible for:
- the implementation and administration of international financial sanctions in effect in the UK
- licensing exemptions to financial sanctions
- domestic designations under the Terrorist Asset-Freezing etc. Act 2010
- directions given under Schedule 7 to the Counter-Terrorism Act 2008
These are administered by the UK Border Agency.
Exporting without a licence
It is a criminal offence to export, import or trade in goods that are subject to a sanctions and embargo regime without a specific licence from the appropriate Government department.
It is vital that individual traders and brokers check that their goods can be exported or traded to a particular destination, as missing or incorrect licences can lead to delays, seizures, fines, penalties, and even imprisonment.
Exporters and traders, particularly those who work in controlled sectors, eg defence manufacturing, must keep up to date with legislation, which is subject to change. You are advised to subscribe to the update notices issued by the relevant Government department including the Notices to Exporters from the Export Control Organisation (ECO), Import Licensing Branch or HM Treasury.
If you or your business are impacted by sanctions you should seek your own legal advice.
Strategic export control and arms embargoes
Secondary legislation introduced under the Export Control Act 2002 provides licensing and enforcement powers to the Department for Business, Innovation and Skills (BIS) in relation to sanctions and embargoes on military and dual-use items.
It is a criminal offence to export strategic or controlled goods that are subject to sanction and embargo regimes without a specific licence issued by the Export Control Organisation (ECO) part of BIS. The export of some goods is also banned outright. This pages explains briefly how export controls operate and how traders, sellers, agents or brokers can apply for a licence to export strategic goods.
Brief overview of export controls
The chief task of the ECO is to process applications for licences to export strategic goods, software and technology from the UK. Strategic items include not only military products but also a wide range of other dual-use items such as chemicals, lasers, high-powered computers, cryptographic items and much more - some obvious and others less so.
The key to determining if your export or trade deal is licensable depends on four key factors:
- type of items being exported - whether the items on a list of licensable goods (the UK Strategic Export Control Lists)
- destination concerned - whether the country is subject to sanctions or other concerns
- end-use of the items
- other licensable trade or export activities
For information on applying for a licence and export controls in general, read the introductory guide to export controls. See also the guide on when to apply for an export licence for your strategic goods.
It is illegal to import or export some types of goods, including anti-personnel landmines, laser weapons or significant amounts of new nuclear material or to export nuclear weapons or technologies to countries other than recognised nuclear weapon states. It is also illegal to import or export certain items that could be used for torture or capital punishment. Read our overview of current arms embargoes and other restrictions.
Your export responsibilities
It is vital that individual exporters check that their goods can be exported or traded to a particular destination, as missing or incorrect licences can lead to delays, seizures, fines, penalties or even imprisonment.
Exporters should keep up to date with the latest legislation, which is subject to change. You are advised to subscribe to receive the ECO’s Notices to Exporters which provide updates on arms embargoes and other export control announcements. Find out how to subscribe to the Notices to Exporters email alert service provided by the ECO.
Applying for a licence
All applications for licences to export military or dual-use items controlled for strategic reasons are considered on a case-by-case basis by the ECO.
SPIRE is the ECO’s fully electronic system for processing export licence applications.
Find out about the licensing process in the guide to export control licensing process and how to appeal. You can use the Goods Checker on the Checker tools website (registration required) to find out if your items are included on the UK Strategic Export Control List controlled by UK or EU legislation.
For further information you can call the BIS ECO helpline on 020 7215 4594 or email firstname.lastname@example.org.
Complying with financial sanctions
Financial sanctions in force in the UK may apply to individuals, entities and governments, who may be resident in the UK or abroad.
A consolidated list of asset freeze targets designated by the United Nations, European Union and United Kingdom under legislation relating to current financial sanctions regimes is available.
Obtaining a licence or authorisation
Applications to release funds from frozen accounts, or to make funds, economic resources or financial services available to or for the benefit of a designated person should be made in writing by:
- by email to email@example.com
- by post to Financial Sanctions, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ
Downloadfor all other sanctioned countries
For licence applications relating to Al Qaida and Terrorist Financing asset freezes, you should write to Financial Sanctions setting out the full facts and details of the licence needed if there is not already a relevant general licence.
Department for Business, Innovation and Skills (BIS) Export Control Organisation (ECO) helpline
020 7215 4594
HM Treasury financial sanctions enquiries
Enquiries relating to asset freezing or other financial sanctions should be submitted to HM Treasury either by email to firstname.lastname@example.org or by post to Financial Sanctions, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.
Subscribe to our free e-mail alerts for information on updates to the Treasury’s consolidated list of targets of financial sanctions in effect in the UK.
Project Alpha @ King’s College London – information, guidance and country profiles intended to assist the exporters of dual-use commodities. The Export Control Organisation neither monitors or endorses non-governmental providers of information.