Sanctions Against Russia: Rethinking the West’s Approach

BY ILIYA KUSA

One of several goals Moscow pursues in its geostrategic approach to the West is to weaken or fully abandon the Ukraine-related sanctions regime. For the Russian government, this is not only a battle for economic stability and development; it is also an ideological struggle testing whether post–World War II international mechanisms are capable of coercing countries to do the will of others.

The sanctions against Russia were marred from the start by contradicting policies and proved to be inefficient on a global scale, with Russia still undermining Ukraine’s stability through adventurism in the Donbas and Crimea while expanding its influence elsewhere. There are several reasons why sanctions didn’t alter Russia’s behavior and inflict enough damage on the Russian economy to wrest concessions out of Moscow. All these reasons relate to the nature of the sanctions, the motivations of the parties imposing them, and the peculiarities of the sanctions mechanisms in the EU and the United States.

A significant portion of the Western, mainly US, sanctions were introduced prior to the Ukraine crisis of 2014 and therefore are not actually connected to the current political processes surrounding Ukraine. Sanctions as an instrument of deterrence against a post-1991 resurgent Russia were first implemented around 2005–2006, when Russia under Putin started shifting away from a pro-Western course and became involved in active global confrontation with the West. Since then, additional packages of sanctions have been imposed with regard to Russia’s interactions with Cuba, North Korea, Venezuela, and Iran, its intervention in Syria, and multiple human rights abuses and political repressions.

The sanctions imposed by the EU in March 2014 were the result of a broad compromise among the EU’s twenty-eight member states, shaped by a moral necessity in response to what happened rather than by a geopolitical rivalry, as was the case for the United States.

Of all the sanctions imposed against Russia, the most viable ones appeared to be those prohibiting Russian companies access to vital Western technologies, especially in the oil and gas sector, rocket engineering, deep hole drilling, shelf extraction, heavy machinery, and the petrochemical industry. Sanctions of this type effectively disrupt Russian supply chains and sabotage the country’s ability to make a scientific and technical leap forward, weakening its capacity for modernization. The expected result is a scientific and technological gap between Russia and the developed world ten to fifteen years from now.

However, there are several major drawbacks to the Western sanctions against Russia. First, the sanctions are not complex. Often they don’t cover the whole targeted sector, and consequently their impact is partial. For example, restrictions imposed against Russian rocket fuel do not include some types of chemicals that could be used to produce this fuel.

Second, some sanctions have already become ineffectual. For instance, since 2014 the Russian government has found multiple ways to circumvent European and US sanctions imposed because of the annexation of Crimea. These sanctions have not been changed or updated in six years. Moreover, part of the Crimean sanctions package was dormant from the very beginning. Sanctions might have worked had Russia had tried to develop a civilian economy on the peninsula, which it did not.

Third, the political aspect, especially its European dimension, creates additional obstacles to preserving the sanctions regime and therefore deterring Russia. EU sanctions were introduced after a series of multilayered, complex negotiations involving the EU’s twenty-eight member states and their respective governments. With each passing year, enthusiasm for sanctions among the European states wanes under pressure from the industrial lobby, business communities, and traders, making it less and less possible to preserve the EU’s sanctions in their original form.

As a result of these drawbacks, Russia appears to have suffered only minimally economically, successfully overcoming the initial shock from sanctions. Russia’s GDP grew from 0.3 percent in 2016 to 2.3 percent in 2018, and the structure of Russia-EU trade hasn’t changed dramatically, with trade in some sectors and markets even growing through the years. Of the sanctions-imposing states, Germany has benefited the most from continuing trade with Russia.

What is more, recent global trends and numerous official statements in Brussels, Paris, and Berlin indicate that a significant part of the European establishment considers the conflict in Ukraine a burdensome process hampering the realization of their own long-term interests. Thus the issue of sanctions against Russia has become a problem for the EU that the constituent governments would like to resolve to revert to trade and cooperation on security issues with Russia.

It is high time to admit that the current international system is quite weak when it comes to punishing certain countries for violations of international law and coercing them into changing their behavior, especially if these violators are permanent members of the UN Security Council.

To strengthen and expand anti-Russian sanctions, which would reinforce the West’s upper hand in negotiations with the Kremlin, it is necessary to rethink the West’s approach to sanctions. Sanctions should be optimized and prioritized: the most efficient packages should be preserved, and others conditioned on Russia taking certain peaceful steps toward political solutions and humanitarian relief. For this to be done, it is of utmost importance to have a clear vision of a political solution to the armed conflict in Ukraine.

Ukraine has the capacity to compensate Western economies for losses they have borne while upholding the sanctions that drove their businesses out of the Russian market, by allowing them to enter the Ukrainian market and creating appropriate conditions for them to thrive. Ukraine has an industrial and economic structure like Russia’s and so is in position to replace certain Russian trade items the European market may have lost because of sanctions, among them stainless steel, antifreeze substances, tractors, harvesting machinery, gas turbines, aluminum plate, refrigerators, and automobile parts.

For Ukraine, a retailored sanctions regime could help advance the peace negotiations, whether the sanctions are used as a bargaining tool or their lifting is conditioned on Russia taking certain steps toward a political solution acceptable to the conflicting parties and linked to an accurate road map to end the conflict in the Donbas. This would also help Ukraine lobby for new sanctions that are meaningful and useful should the need arise. In the absence of a concrete function to the sanctions, however, they alone cannot change the status quo.

The opinions expressed in this article are those solely of the author and do not reflect the views of the Kennan Institute.