Sunday, November 30, 2014

The word embargo came from the Spanish embargar which means to stop, prevent or hold back. In international relations it is a detrimental and special (not applied in normal trading practice) measure that has an intentionally punitive characteristic.

In international trade it can mean the traditional tools of protectionism (limiting or banning export or import, creating quotas for quantity, imposing special tolls, taxes or fees). Also banning freight or transport vehichels (ships or planes) from the area of a country. Freezing or seizing freights, assets, bank accounts, etc.. Limiting the transport of particular technologies or products (high-tech) for example COCOM during the cold-war. Discriminating between products that have civic and military applications can be problematic. Embargoes can be aimed and limiting loans or tightening credit conditions. Monetary sanctions can affect bank transfers, freezing government or business accounts or financial services. Typically these alone can discourage foreign investors. Embargo can also mean restricting the free travel of particular business people or politicians.

Tags: tolls, taxes, special, tools, monetary, government, investor, loan, finance

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