Balancing Sanctions and Human Rights: The Significance of the UN Guiding Principles on Sanctions, Business, and Human Rights

[Matin Amiri holds a Masters in international law from Allameh Tabataba’i University of Tehran]

I am writing this post to provide a comprehensive discussion of the newly published Guiding Principles on Sanctions, Business and Human Rights, hereinafter referred to as the Guiding Principles, authored by the United Nations Special Rapporteur on Unilateral Coercive Measures and Human Rights, Professor Alena Douhan. These Guiding Principles, finalized after an extensive two-year consultative process involving States, international organizations, civil society, and business stakeholders, seek to clarify the application of existing international legal standards in the complex context of sanctions regimes. This post aims to examine the significance of these Principles in addressing the multifaceted challenges posed by sanctions, including the issue of over-compliance.

In an era in which UCMs are regarded as a principal instrument of foreign policy, the phenomenon of overcompliance raises pressing questions concerning the balance between legal compliance and moral obligations. Confronted with such ambiguous dilemmas, special rapporteurs may be considered pioneers in clarifying and generating a body of literature, albeit non-binding, on the issues at stake.  In this regard, these Guiding Principles can be recognized as an important step toward addressing the complex challenge posed by UCMs and overcompliance.

An Introduction to Unilateral Coercive Measures

Unilateral Coercive Measures, hereinafter referred to as UCMs, are not a recent innovation; they are deeply rooted in the history of statehood and have been used for centuries as instruments to exert pressure, enforce compliance, and shape the policies of other states (p. 204). The modern concept of UCMs refers specifically to economic and political measures—such as sanctions, embargoes, and financial restrictions—imposed by one state, or a group of states (which are often economically powerful global north states), without the approval of the UN Security Council, aiming to compel a change in the policy or conduct of the target state (here and here).

The growing frequency and geographic reach of UCMs have made them a persistent feature of modern international relations. Given that, in the past two decades, the number of UCMs has risen dramatically, with a 933% increase in sanctions noted from the early 2000s to 2024 (p. 24). It can be understood by the EU sanction tracker that, in 2000, sanctions imposed by the European Union were against one person; in 2001, sanctions were imposed against 115 individuals and legal entities; this number has increased to 1,521 in 2022.

The expansion of UCMs has raised concerns in relation to international law. Although there is no general prohibition on the imposition of UCMs, there is a general agreement that they shouldn’t target human rights, which is the intrinsic reason for the emergence of targeted/smart sanctions. The Committee on Economic, Social and Cultural Rights in its general comment no. 8 held that, whatever the circumstances, UCMs (as well as UN sanctions) should always take full account of the provisions of the International Covenant on Economic, Social and Cultural Rights. 

Although the growing attention of the international community to human rights has reduced these negative impacts, there is still room for effort to reduce as far as possible harm to vulnerable groups. A March 2025 study concluded that economic sanctions against Iran have paralyzed the pharmaceutical industry by limiting the import of essential raw materials, also they have significantly disrupted cancer treatment services, resulting in shortages of medications, a lack of modern medical equipment, increased financial hardship for patients, delays in diagnosis, and diminished effectiveness of available therapies. 

Besides human rights, the most prominent concern about the use of UCMs, specifically secondary sanctions, is that their extraterritorial reach might violate the customary principle of non-intervention. Askari, in The Principle of Non-Intervention and the Dilemma of the Legality of the Unilateral Coercive Measures, argues that extraterritorial sanctions undermine the very fundamental rights of the international community, including sovereign equality, non-intervention, good faith, and cooperation among States (p. 327). The challenge of extraterritoriality has reached such a level that it is the main reason for the EU to enact its blocking statute or Anti-Coercion instrument.

Overcompliance and UCMs

There are multiple definitions of overcompliance. Verdier, in his study on sanctions overcompliance, defined it as a “situation in which a market participant applies sanctions, beyond what is legally mandated by the relevant regime”. Also, Tristan Kohl, in his blog on Extraterritorial Sanctions – Overcompliance and Globalization, referred to overcompliance as “a situation in which companies take more extensive actions than strictly necessary to avoid risking a possible sanctions violation and hefty fine”, and focused on extraterritorial sanctions and the role of such unilateral measures in the overcompliance. The UN Special Rapporteur on the negative impact of UCMs on the enjoyment of human rights, Ms. Alena Douhan, in her 2022 report on Secondary sanctions, civil and criminal penalties for circumvention of sanctions regimes and overcompliance with sanctions, defined overcompliance as “self-imposed restraints that go beyond the restrictions mandated by sanctions, either as part of a de-risking process, to minimize the potential for inadvertent violations or to avoid reputational or other business risks, or as a means to limit compliance costs”. Subsequently, the Special Rapporteur in Guiding Principles developed the definition and held that overcompliance means “going beyond compliance with sanctions, often to minimize the risk of penalties for inadvertent violations, and/or to avoid reputational risks that can arise from dealing, or having any other nexus, with a State, entity or individual under sanctions, or because the complexity and uncertainty of sanctions, and/or high penalties as a form of sanctions enforcement, make effective compliance too costly or risky.” 

Practically speaking, companies confronted with UCMs, which are often secondary sanctions in nature, engage in a cost-benefit analysis to assess permissible transactions and interactions, adjusting their conduct accordingly. A notable example of this analysis is the health sector; Medical equipment and pharmaceutical manufacturers generally avoid interacting with entities from sanctioned countries, even though medical products are typically officially exempt from sanctions. Mölnlycke 2018 halt to exports of all bandages needed by patients suffering from Epidermolysis bullosa, commonly known as butterfly patients, is a real example of this claim (here and here).

The Guidance Note on Overcompliance with Unilateral Sanctions and its Harmful Effects on Human Rights indicates that the result of this process involves weighing the benefits of executing a given transaction against the potential penalties imposed by UCMs. This approach frequently diverges from the conventional de-risking stance, leading to situations where transactions permitted under UCMs are nevertheless avoided in practice.

Overcompliance, particularly within the context of monitoring standards, has been identified as a significant trend in global compliance. Gordon in The Brutal Impact of Sanctions on the Global South Factors, observed that factors such as unclear and/or inexplicit sanctions regimes, along with severe penalties for violations of these regimes, contribute to the emergence of overcompliance. Consequently, companies are increasingly adopting a strategic approach to compliance, advancing beyond the mere fulfillment of prescribed requirements. Technically, several factors are driving the proliferation of overcompliance. The increasing emphasis on data-driven compliance, the use of data analytics and predictive modeling to proactively identify and address potential risks, and the multifaceted linkage of compliance with other business functions such as risk management and corporate governance, reflecting a holistic approach to sustainable business practices, are driving the spread of de-risking practices. 

In addition, there is an expectation of greater international cooperation in the enforcement of compliance regulations, potentially leading to the creation of common standards and collective responses to non-compliance. Speaking of de-risking processes, these processes are often understood in the context of combating terrorism, money laundering, and drug trafficking. According to this process, engaging with high-risk customers will constitute a self-imposed prohibition for companies, especially financial and banking institutions.

It is important to recognize that overcompliance is driven by distinct and identifiable factors. A study on Secondary Sanctions has observed that at the most fundamental level, the primary catalyst for overcompliance is fear-specifically, the apprehension regarding secondary sanctions imposed by governing authorities and the potentially severe repercussions associated with their violation. These repercussions may manifest directly, such as through criminal prosecution or substantial financial penalties exemplified by the approximately $9 billion fine levied against BNP Paribas and the $190,700,000 fine imposed on the British Arab Commercial Bank, or indirectly, for instance, through the loss of access to lucrative markets controlled by the sanctioning states.

Guiding Principles on Sanctions, Business and Human Rights

On 6 February 2025, the Special Rapporteur formally published the finalized version of Guiding Principles, which had been previously released in draft form. These Principles were compiled and drafted in accordance with paragraph 27 of Human Rights Council Resolution 55/7 to ensure the consolidation, protection, and enjoyment of rights, as well as undertake substantive measures in conformity with international law within the context of sanctions, thereby aiming to eliminate or at least mitigate the excessive recourse to UCMs. These Principles represent a significant development in the articulation of international legal standards applicable to sanctions regimes and their human rights implications; since a significant portion of these Guiding Principles-including the commitments to due diligence and the human rights, derive from Professor John Ruggie’s 2011 Guiding Principles on Business and Human Rights, commonly referred to as the Ruggie’s Principles.

The scope of application of these Principles is illustrated by principle 4 of the Guiding Principles. The Principles shall serve as a normative framework and standard applicable to States, including when acting under Security Council sanctions, as well as to global and regional international organizations, affiliated bodies and agencies, and all private sector entities and businesses, irrespective of their size or nature of operations. The key elements of these Guiding Principles comprise the multi-layered and concurrent respect for human rights by States and private corporations, the implementation of due diligence and human rights monitoring, as well as the assurance of access to justice and the provision of effective and adequate redress, which was previously addressed in a report by the Special Rapporteur titled Access to justice in the face of unilateral sanctions and overcompliance. Although these Guiding Principles are not able to bind States and other actors, the fundamental essence of the role of United Nations Special Rapporteurs lies in their critical responsibility for effectively advancing the protection of human rights, as well as contributing to the development and consolidation of soft international norms, commonly referred to as soft law.

Conclusion

It should be noted that the increasing use of UCMs, particularly secondary sanctions, has given rise to the phenomenon of overcompliance, which has become a significant concern in international law. The intricate nature of overcompliance arises from a variety of distinct and numerous contributing factors, each differing fundamentally from the others. Accordingly, addressing these factors in practice necessitates a comprehensive and precise framework capable of accommodating the interests and requirements of imposing States, third states, and private enterprises alike. In response to these challenges, the Guiding Principles on Sanctions, Business and Human Rights were developed to identify and mitigate the underlying factors that contribute to overcompliance. These Principles do irrespective of whether such factors are recognized as lex lata under international law, represent a concerted effort to address the adverse effects of overcompliance and UCMs. By establishing clear guideline, the Guiding Principles aim to foster a balanced framework that protects human rights while addressing the legal uncertainties and operational challenges posed by sanctions regimes. Ultimately, they seek to promote coherence among States, international organizations, and businesses in their respective roles, thereby enhancing legal certainty and minimizing the detrimental humanitarian and economic impacts associated with overcompliance.