How business might violate human rights regulations

The UN Guiding Principles highlighted that, all fundamental human rights outlined in the International Bill of Rights must be fully realized when implementing the UN or unilateral sanctions. According to the UN Guiding Principle, Public and private entities should prioritize human rights when applying sanctions or formulating compliance policies (See para. 15 and 16). Overcompliance with sanctions by businesses, especially financial institutions, can have significant adverse impacts on the realization of human rights, particularly the right to health and the right to life of citizens in sanctioned countries. Despite exemptions for humanitarian goods in comprehensive sanctions, human rights are still at the danger of being violated because of the business policies and practices. 

Sanctions increase the cost of acquiring and delivering humanitarian goods and services, such as essential food, medicine, and medical equipment. Even though transactions involving these products are exempted, banks still associate risk with them and may choose not to proceed. Likewise, businesses operating in the field of essential products may themselves adopt a zero-risk policy, which means they abstain from engaging in any activities involving states, entities, or individuals subject to sanctions or deemed at risk of sanctions.  

This zero-risk policy stands in stark contrast to the risk-based approach proposed by the EU on several occasions. The zero-risk approach exacerbates human rights situations in sanctioned countries and undermines efforts to mitigate sanctions on vulnerable populations. One example is the EU’s policy not to interrupt the transfer of food and energy to third developing countries. [3] If businesses in sectors such as energy, health, or food opt for a zero-risk approach, the effectiveness of EU policies aimed at mitigating these impacts would be severely compromised.