Financial sector overcompliance with unilateral sanctions is harmful to human rights: UN expert

GENEVA (28 June 2022) – A UN human rights expert today urged banks and other financial institutions around the world to stop over-complying with sanctions regimes imposed by various countries, saying the practice was inadvertently leading to human rights violations.

Alena Douhan, UN Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights, called on governments to fulfil their obligation to uphold human rights, by requiring banks to carry out the due diligence necessary to prevent such harm.

In this regard, she issued a public Guidance Note on Over-compliance with unilateral sanctions and its harmful effect on human rights.

“Cases show that over-compliance prevents, delays or makes more costly the purchase and shipment of humanitarian goods and services including food, medicine, medical equipment and goods for maintenance of critical infrastructure to sanctioned countries, even when the need is urgent,” Douhan said.

“Over-compliance also prevents international organisations and humanitarian actors from transferring funds to pay their workers in sanctioned countries, and blocks people in targeted societies from accessing their property, meeting their financial obligations, engaging in business activities, participating in international cooperation and day-to-day interactions,” she added.

The Special Rapporteur said over-compliance was driven largely by the complexity and lack of clarity in many unilateral sanctions regimes. Douhan also pointed to efforts by some countries, especially the United States, to enforce sanctions globally through fines and secondary sanctions against those doing business with sanctioned parties.

Douhan reminded States that imposing secondary sanctions or threatening secondary sanctions and civil and criminal penalties for non-compliance with their sanctions regimes was illegal.

The UN expert called on governments to monitor how financial sector over-compliance with sanctions affects critical human rights infrastructure abroad. She recalled States’ obligations under the UN Guiding principles on Business and Human Rights to ensure that the activity of all entities under their jurisdiction and control, including banks and financial entities do not violate human rights.

ENDS