How do sanctions affect ordinary people?

Sanctions are legal limits on dealing with a country, a sector or a person. The US Treasury's Office of Foreign Assets Control says some programs broadly prohibit most transactions with a country. Others target specific people and firms.

Blocking freezes property in place. OFAC says it imposes an across-the-board ban on transfers or dealings of any kind. All US persons must comply, including US citizens living abroad.

The first channel is often the currency. A study of Iran by Dario Laudati and M. Hashem Pesaran found sanctions shocks weakened the rial. Inflation rose mainly through that weaker exchange rate.

The second channel is banking. Banks often refuse lawful transactions to limit their own risk, which the UN calls over-compliance. A UN expert said in 2022 that this blocks people from accessing their property.

OHCHR guidance adds that over-compliance can stop people from sending money to family or receiving it. It can also deny bank accounts to people simply because they are nationals of a sanctioned country.

Payments for food and medicine can slow down or cost more, even when the need is urgent. Some sanctions programs exempt humanitarian donations and personal communications, but exemptions vary by program.

Travel gets harder too. After sanctions on Russia in 2022, Visa said cards issued in Russia would no longer work abroad. Foreign Visa cards would stop working inside Russia.

Over time, the costs can show up in health. Jerg Gutmann, Matthias Neuenkirch and Florian Neumeier studied 98 countries from 1977 to 2012. An average UN sanctions episode cut life expectancy by 1.2 to 1.4 years. US sanctions cut it by 0.4 to 0.5 years, and women were hit harder.

If you live in, invest in or send money to a sanctioned country, check the current OFAC program and your bank's policy first. Rules change often.