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Navigating economic sanctions in today’s globalised world

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Speaker of Parliament Anita Among. PHOTO/FILE

After the UK announced sanctions against the Speaker of Parliament Anita Annet Among, she quickly responded that sanctions would not affect her because she did not need a visa to go to London and had a permanent visa to her home district Bukedea. 
She added that she did not own anything in those countries and many of her supporters have put a brave face to what could be a career-damaging situation for the country’s number three top official.

In the past, economic sanctions were frequently directed at governments, and their immediate impact might not have been readily apparent, as they often remained confined to that level.
But recently, sanctions have shifted their focus towards individuals, potentially impacting them at the grassroots level.

However, similar to sanctions imposed on governments as a whole, the effectiveness of sanctions at the individual level is also uncertain, with some targeted individuals asserting that they experience no adverse effects. 
Nonetheless, Prosper Magazine has learnt that in today’s interconnected global community, it is increasingly challenging to remain unaffected by these measures.

Financial isolation
One of the most immediate impacts on sanctioned individuals is financial isolation. Sanctions can freeze bank accounts, block access to financial services, and restrict transactions. 
While individuals may attempt to circumvent sanctions by relying on local banks, this strategy may prove ineffective, as many commercial banks are foreign-owned and beholden to their respective governments.

Legal experts in commercial law affirm that these sanctions extend to all individuals or companies associated with the sanctioning country, prohibiting them from interacting with the sanctioned individual.

Counsel John Musiime, a partner at Dentons, offers an example involving Barclays Bank, a UK entity, to illustrate his point. 
He explains that if Barclays were still operating in Uganda, and a sanctioned individual held shares in another local company that conducted business with Barclays, the company would sever ties with the individual.

When asked if a sanctioned individual can sue a local bank, even if affiliated with the sanctioning country, for freezing access to a personal bank account when such conditions were not in place at the time of opening, Counsel Musiime responded that they would not succeed in doing so.

“When you open an account, you sign various forms. Among them, there is usually a clause stating that you understand the bank is subject to anti-terrorism laws, sanctions, among others. This clause is found in the terms and conditions, indicating that by signing, you have agreed to these regulations,” he said, adding that even if such a clause is absent, there is a concept called force majeure. 

Force majeure is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing. 
For instance, Counsel Asiimwe illustrates, “If you hired someone to provide a service, such as advertising on TV, and the government closes to shut down the station, you cannot take that person to court because it is not their fault; the government’s intervention prevented them from fulfilling the contract. 

Professional stagnation
Despite appearing unlikely, sanctions can indeed influence one’s professional trajectory, potentially leading to job loss and career stagnation. 
This impact is particularly pronounced for individuals who have benefited from education and employment opportunities provided by the sanctioning country.

“The sanctions have no direct connection to the sovereignty of the affected individual’s country unless their government chooses to align with them. However, if the individual were employed in those countries, it would indeed have an impact,” states Prof Asiimwe Solomon, a lecturer of security and international relations at Nkumba University.

Level on inconvenience
Sanctions have wide-ranging implications, affecting not only the banks you interact with but also your children, partners, and business colleagues, and travel restrictions.

Sanctioned individuals frequently encounter travel bans or visa denials, significantly restricting their ability to move freely, but if the individual does not travel frequently, they may evade the sanctions.

However, for those with families abroad, the struggle to assist is profound. Directly sending money to them becomes impossible, which not only has practical implications but also takes a psychological toll.

A man fills in a form before transfering some money abroad. Sanctions can freeze bank accounts. PHOTO / file

This psychological burden extends not only to individuals with business interests in those countries but also to leaders who, in the course of executing their duties, require travel.

Using the example of Speaker Anita Among, counsel David Sempala, a managing partner at KSMO advocates, says, “A Speaker of Parliament cannot be confined like a bird with clipped wings, unable to travel. Eventually, they may need to embark on official trips, such as attending the Commonwealth Parliament Forum.”
The extent of inconvenience becomes more pronounced when sanctions endure for years, as demonstrated by the prolonged sanctions on Iran.

For example, Counsel Sempala highlights a case where Iran initially underestimated the impact of sanctions. However, they soon realised the severity when they could not procure repair parts for their helicopters.

“They could not acquire newer, more advanced helicopters, upgrade their existing fleet, or obtain spare parts, and they faced challenges in bringing in experts from countries such as Russia or the UK, where the helicopter was manufactured. Tragically, this led to the loss of the president’s life,” he said.

For a country such as the UK, a key donor to Uganda and a former colonial ruler, as well as a central hub consisting of 56 Commonwealth nations, its extensive global connections make it challenging for individuals not to find something linked to the country that they might need in life.

Coping with sanctions 
Despite these significant challenges, some sanctioned individuals find ways to adapt and cope. They might turn to local support networks, develop new skills, or engage in alternative economic activities. 

Prof Asiimwe explains that in attempting to circumvent sanctions, individuals often collaborate with others. For instance, they may send money to the through intermediaries. However, if the sanctioning government becomes aware of this, they may also sanction the individual who is aiding in evading the sanctions.

Economic sanctions are a powerful tool in the geopolitical arsenal, but they come with a significant human cost. Thus, they have extensive consequences for individuals, particularly in today’s interconnected global village where interconnectivity is crucial for survival.