The League of Nations did not impose sanctions against Japan following the Mukden Incident for two main reasons: first, to protect French and British colonial interests in the Far East which could have been threatened by sanctions that might provoke Japan to attack; and second, because European members thought military involvement in the region was not profitable or desirable since it was too far away and they did not want to send forces across the world.

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WHY DID THE LEAGUE OF NATIONS NOT IMPOSE
SANCTIONS AGAINST JAPAN FOLLOWING THE
MUKDEN INCIDENT? (6)
MAIN REASON – Protecting France and British colonial
interests
The League was Eurocentric in nature, and therefore any action
that could affect European interests was unlikely to take place.
European powers in the League such as Britain and France had
colonies in the Far-East, and they did not want anything to
pose a threat to their colonies and the trade that came with
them. They thought that imposing sanctions on Japan could
cause Japan to attack these British and French colonies.’
SECOND REASON – Military involvement not profitable
European members of the League thought it was too far away
to concern them. European nations did not want to send a
military force to the other side of the world. League of Nations
without an army, only option was sanctions or condemnation.