What is a moratorium?

Natalya Kosenko
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What is a moratorium?

If you answer the question �What is a moratorium?� Briefly, then a moratorium is a delay for a certain period of any actions or fulfillment of contractual obligations. Depending on the scope of application, the word �moratorium� has different definitions.

What is a moratorium in business?

If monetary transactions become unprofitable for one of the parties to financial relations, they can be suspended until the situation changes. For example, when the exchange rate is unstable, a credit institution may be suspended. When the situation in the foreign exchange market returns to normal, credit operations will resume.

Company management may impose a moratorium on certain types of expenses in a crisis. Most often under the "freezing" are advertising costs.

Moratorium in international law

In relations between states, a moratorium implies an agreement to postpone or cancel any actions. Suspending decisions can play a big role in further developments.

The moratorium may be adopted by all parties to the contract or imposed unilaterally. An example of a unilateral moratorium, which was a step towards peace, was the refusal of the Soviet Union in 1985 to use medium-range missiles. A collective moratorium was adopted in deciding to suspend industrial intelligence in Antarctica prior to the development of an action plan.

Moratorium on the death penalty

The question of killing or pardoning especially dangerous criminals is widely discussed by the public. When making a decision, the state should take into account the opinion of the people. If the country's population encourages the death penalty, the state has the right to impose a moratorium on it, that is, to suspend it for a certain period.



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