Embargo

A government restriction placed on the import or export of goods, services, currency, and other values to any other country or state

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Written by CFI Team

What is an Embargo?

An embargo is a government restriction placed on the import or export of goods, services, currency, and other values to any other country or state. It can be imposed both in war and peacetime, covering all aspects of trade and economic activity. Embargoes can be placed on specific categories of goods, scientific and technical information, transport and other services, etc.

Embargo - Image of a rubber stamp with the word embargo

In modern international relations, an embargo acts as an instrument of economic, scientific, technical, and financial pressure, aimed at forcing changes in the target state’s internal and foreign policies.

Summary

An embargo is a government restriction placed on the importation or export of goods, services, or currency to another state.
Embargoes are most often directed at a state, a country, or a group of countries.
Embargoes can take several forms, such as political, trade, and those that are environmental in nature.

Imposing an Embargo

The variety of historical and modern cases of establishing an embargo makes it possible to classify the use of such a policy in foreign trade activities on various grounds. Embargoes are most often directed at a country or a group of countries. For example, the embargo can be imposed against a criminal or terrorist organization.

The United Nations provides the possibility of imposing an embargo as a collective repressive measure against a specific country or countries whose actions pose a threat to international security. The restrictions may serve as a basis for suspending or terminating the performance of all or some specific obligations of specific countries, their organizations, and citizens.

Types of Embargoes

There are several forms of embargoes that can be imposed on a state or country, including:

A political embargo
An embargo of an economic nature or a trade embargo
An embargo to ensure the national security of the state
An embargo to prevent and respond to disputed questions about the territorial borders of countries
An embargo imposed to protect the health of the citizens of a state
An embargo of an environmental nature that are imposed to express a state’s disagreement with another state’s environmental policy or attitude toward animals

Some trade embargoes allow the exchange of certain goods, such as food and medicine, to meet humanitarian needs. Also, most multinational embargoes contain provisions that allow certain types of exports or imports under a limited set of restrictions.

Consequences of an Embargo

Embargoes are not violent methods of influence, but they can still harm people and the economies of the countries involved.

An embargo can block the importation of important goods and services to the civilian population of the state that is subject to the restriction. In a state that imposes an embargo, businesses may lose the ability to trade or invest in the state that is subject to the embargo.

According to the Geneva, Switzerland-based World Economic Forum, the result of multinational embargoes is never a “zero-sum game.” Relying on the power of a government, a state with a stronger economy can cause more damage to the target state than it will suffer in response. However, the punishment does not always lead to a change in the embargoed government’s political behavior.

Additional Resources

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