How do sanctions really work, and who do they hurt most?

Sanctions are one of the most powerful foreign policy tools that countries use to influence international behaviour, short of going to war. But how do they actually work? Who imposes them? And who ends up paying the price? Let’s break it down.

What are sanctions?

Sanctions are penalties imposed on countries, organisations, or individuals to discourage behaviour that violates international laws, norms, or agreements. They can target governments, businesses, officials, and even private citizens.

These penalties may include:

Trade restrictions – limiting imports or exports of specific goods
Financial sanctions – freezing assets or banning financial transactions
Travel bans – preventing entry into certain countries
Arms embargoes – halting the trade of weapons and military technology

In essence, sanctions are designed to raise the cost of a particular action or policy, making it harder, or more painful, to continue.

“Sanctions are a diplomatic tool — not a solution in themselves, but part of a broader strategy.”
— Richard Nephew, former U.S. State Department sanctions coordinator

Who imposes sanctions?

Sanctions are usually imposed by individual countries or international bodies such as:

The United States, through the Office of Foreign Assets Control (OFAC)
The European Union, where all 27 member states must agree to any new measures
The United Nations, with approval from the Security Council
Other countries or alliances, including Canada, Australia, and the United Kingdom, can also implement independent sanctions.

“The effectiveness of sanctions depends not just on who imposes them, but on how they are enforced and coordinated.”
— Dr. Clara Portman, Senior Fellow, Global Economic Policy Institute

What types of sanctions are there?

There are several kinds of sanctions, each targeting different sectors or actors:

Embargoes – broad bans on trade with a country (with exceptions for humanitarian goods)
Export restrictions – limitations on selling specific items such as high-tech goods or military equipment
Capital controls – restrictions on foreign investment and access to capital markets
Asset freezes – preventing individuals or companies from accessing money or property abroad
Travel bans – blocking entry of designated individuals into certain jurisdictions

Why are sanctions used?

Sanctions serve multiple purposes, including:

Pressuring governments to change specific behaviours
Preventing access to funds, weapons, or technology
Sending a message that certain actions are unacceptable
Deterring others from taking similar actions
Encouraging compliance with international agreements

They are most effective when multiple countries act together, creating broader economic and diplomatic isolation.

“The more countries that impose sanctions, the stronger their impact. Coordination is key.”
— Dutch Ministry of Foreign Affairs

Who do sanctions hurt most?

While sanctions are often aimed at governments or elites, they can have wide-ranging effects, including:

Ordinary citizens, who may face rising prices, shortages, or job losses
Businesses, especially exporters or financial institutions that lose access to markets
Global supply chains, which may be disrupted if key goods or routes are affected
The sanctioning country itself, if industries there lose trade partners or face retaliatory measures

“Targeted sanctions are meant to pressure decision-makers, but ordinary people often bear the economic brunt.”
— Marianne Leclerc, EU sanctions implementation advisor

Governments often try to design sanctions carefully to avoid humanitarian harm, especially by allowing exceptions for food and medicine. However, the economic pain is rarely limited to those in power.

Do sanctions work?

That depends on how you define success.

Sanctions may achieve their goal of raising the cost of certain actions, slowing military developments, or isolating a country diplomatically. In some cases, they have led to policy changes, negotiations, or economic pressure that altered outcomes.

But they can also backfire, entrench divisions, or lead to unintended consequences including pushing sanctioned countries to develop alternative alliances or systems.

"It’s difficult to isolate a country economically without creating unintended consequences for the wider international community.”
— Ahmed El-Masri, Trade and Geopolitics Analyst

What about enforcement?

Sanctions are only effective if they're enforced. This requires:

Customs authorities to inspect shipments
Banks and financial institutions to monitor transactions
Businesses to follow restrictions on trade or investment
Governments to track and penalise violations

Attempts to circumvent sanctions, such as through third countries or illicit trade networks, are also closely watched and sometimes lead to secondary sanctions.

The bottom line

Sanctions are a powerful but complex tool in international relations. They aim to apply pressure without resorting to armed conflict. While they can influence governments and limit access to crucial resources, they also carry economic and humanitarian risks.

In a world of deep economic interdependence, sanctions don’t just affect the target, they ripple across borders. Striking the balance between impact and fairness remains one of the toughest challenges for those who impose them.

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