When finance becomes a weapon: the challenge of central bank sanctions under international law

Purpose The purpose of this study is to take stock of the increasing use of central bank sanctions as a foreign policy tool and to analyse their compatibility with international legal principles, such as non-intervention, state immunity and human rights. Design/methodology/approach This study provides a comprehensive analysis of state practice regarding central bank sanctions and the international legal framework that governs them. It systematically examines relevant international legal principles, identifies potential violations and explores justifications and defences states may use to support the legality of these sanctions. Findings The analysis reveals that central bank sanctions often clash with various international legal norms, including non-intervention, state immunity and human rights. This study argues that such sanctions can only be justified as countermeasures in exceptional circumstances and must adhere to strict conditions to be lawful, particularly concerning their proportionality and humanitarian impacts. Originality/value This study fills a gap in international legal scholarship by providing a dedicated analysis of central bank sanctions. It offers valuable insights for policymakers, legal practitioners and scholars on the legal complexities and potential ramifications of using central bank sanctions as a foreign policy instrument.