In response to Russia’s invasion of Ukraine, the International Working Group on Russian Sanctions* was formed with the primary goal of providing governments and companies around the world with expertise and experience in formulating sanctions proposals. These sanctions aim to increase the cost to Russia for its aggression and support Ukraine in defending its territorial integrity and sovereignty. Comprised of independent experts from various countries, this group coordinates with the Ukrainian government and those imposing sanctions. However, it operates independently, expressing individually held opinions without direction from any government or entity.
Two years have passed since the initial formation of the group, and despite significant efforts, the Russian leader Vladimir Putin continues to wage war. Ukraine has struggled to strengthen its defense capabilities and rebuild its shattered economy, particularly its energy sector, due to delays in Western military support and a deficit in artillery munitions and air defense missiles. Although Russia has regained some momentum, it controls far less Ukrainian territory than it did in 2022. Both Ukraine and Russia have not achieved their war aims; Ukraine seeks liberation of all its territory, while Putin has failed to remove President Volodymyr Zelenskyy, demilitarize Ukraine, or stop NATO expansion.
To support Ukraine, more and better weapons are essential, alongside escalating sanctions to ensure the strongest possible advantage for Ukraine in economic and military terms. Significant sanctions have already been imposed on Russia, reducing its export markets and revenues and constraining its military and financial capabilities. However, weak implementation of existing sanctions has allowed Russia to evade price caps and bolster its military production with Western components. Loopholes in the sanctions regime and negligence or complicity of Western companies have enabled Russia to continue importing Western equipment and technology.
More efforts are needed to effectively implement and escalate sanctions with tougher, longer-term economic implications for Russia. Specific measures proposed include confiscating frozen Russian assets abroad to fund aid for Ukraine, imposing new sanctions on Russian commodity exports, tightening financial sanctions, imposing more personal and company-specific sanctions, preventing Western lawyers from enabling sanctions evasion, designating Russia as a sponsor of terrorism, stopping Western companies from doing business in Russia, and strengthening enforcement of existing sanctions. Additionally, expanding secondary sanctions on individuals and companies in other countries that aid Russia’s war effort is crucial.
Sanctions have already been imposed on more than 1,500 Russian individuals, over 2,600 Russian companies and institutions by the U.S., and more than 3,700 by the EU. These include leading banks, defense firms, and transport companies. Sanctions on the Russian Central Bank have frozen around $300 billion of reserves, significantly limiting policy maneuvers. However, existing sanctions are less severe than those imposed on Iran and countries identified as State Sponsors of Terrorism. Moreover, targeted rather than broad sanctions have been adopted to minimize adverse effects on third countries and the general welfare of the Russian populace.
The impact of sanctions on Russia has been tangible but constrained by Russia’s resilient attributes, such as its large economy, abundance of natural resources, supportive partners, state control over public life, and a fully-operational military-industrial complex. Despite these advantages, sanctions have hit growth, reduced resources for the war in Ukraine, and disrupted key sectors like aviation, timber, automobiles, and gas. The emigration of over a million Russians, mostly of working age and with higher education, has further weakened the economy. Russia’s increased dependence on China for economic deals and gas imports, often at unfavorable terms for Russia, illustrates the impact of sanctions.
Future sanctions must aim to dramatically reduce Russia’s economic resources. A proposed package includes reducing Russian export revenues by $70-80 billion per year through measures such as enforcing the oil price cap, imposing further sanctions on LNG, pipeline gas, nitrogen fertilizer, and metals, and introducing across-the-board tariffs on Russian exports. This comprehensive approach, combined with military defeats, can potentially change Russia’s approach to war.
Furthermore, stronger financial sanctions are needed, including full blocking sanctions on all Russian banks, targeting banks in “friendly” countries that facilitate Russian trade, and requiring Western banks to withdraw from Russia. Expanding personal sanctions to include all senior Russian officials and their families, and preventing Western lawyers from aiding in sanctions evasion, is crucial.
In conclusion, while existing sanctions have had significant impacts, more aggressive and comprehensive measures are needed to further constrain Russia’s ability to wage war. The sanctions coalition must continuously escalate pressure, ensure robust enforcement, and expand sanctions to achieve the strategic goal of reducing Russia’s capacity to conduct its war in Ukraine.
*Based on “Action Plan 3.0: Strengthening Sanctions Against the Russian Federation” by the International Working Group on Russian Sanctions, May 15, 2024.
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