Sanctions against the Russian Federation work. How to Strengthen the Economic Tightening on Aggressor's Neck

Focus has translated the article by Kristin Aent about how sanctions against the Russian Federation work. The sanctions and export control imposed after Russia's invasion of Ukraine in 2022 were rapid and large -scale. However, since then, key components made in the US, Germany, France, the United Kingdom, South Korea and Japan have been found in Russian drones, rockets, radio stations and armored vehicles.

Watching how Russia is systematically evading responsibility, many people ask: do sanctions work? The results of sanctions against Russia were not as significant as some imagined. But this does not mean that their introduction and use is not worth the effort.

Sanctions reduced the amount of funds available to Russia for war, put pressure on the Russian domestic economy, which causes the continuation of the war to become less politically advantageous to President Vladimir Putin, and helped prevent the direct financing of Putin's attack on Ukraine by sub -Ukraine countries. In this sense, sanctions were indeed effective. But you can and need more.

Increased control over the implementation of existing sanctions will increase their effectiveness, and new targeted and secondary sanctions can further affect Russia's plans. The effectiveness of sanctions against Russia, of course, depends on expectations. Some of the most radical and far -reaching opportunities, which were discussed in the imposition of sanctions, such as the immediate cessation of war or Putin's overthrow, and remained unfulfilled.

However, sanctions were in fact useful in terms of reducing the pace of long -term development of Russia and limiting certain pools of assets that could otherwise be used to finance war. For example, in December, the Chief Economist of the US Ministry of Finance drew attention to the reduction of Russian imports and exports in 2022 compared to 2021, as well as the reduction of the Russian economy in 2022.

Sanctions have led to Russia's income for funding for hostilities by freezing billions of dollars belonging to the Russian Central Bank and the National Welfare Fund and stored in sub -country countries. Although Russian military production is ongoing, the country has to allocate resources from other industries. In recent months, Russia has been dealing with significant inflation caused in particular by a deficit related to sanctions.

For example, The Wall Street Journal reported a significant increase in egg prices in Russia because of sanctions, lack of labor, ruble weakening and other various economic factors. In the long run, sanctions can also affect the development of the Russian economy.

Although the Russian economy increased in 2023, the head of the International Monetary Fund noted that military production played a huge role in this growth, and also emphasized the current economic problems that Russia faces due to lack of labor and technological restrictions. Direct foreign investments also sharply declined after the invasion. This is explained, at least in part, by the presence of sanctions that impose restrictions on such investments in Russia, as well as private initiatives.

With such a significant reduction in foreign investment, it seems likely that the long -term economic development of Russia will change its trajectory. Export control can also deprive the Russian industry of the most advanced technologies if similar goods are not supplied from China, India or other non -sanctions.

Although sanctions themselves do not lead to a change in the regime and therefore are unlikely to be able to remove Putin from power, the internal economic situation may well become one of the factors that can influence Putin's decision to seek the settlement of war in Ukraine or go to negotiations. Reduction of cheese oil prices is insufficiently controlled and can be made more effective, since in recent months large -scale abuse and violations have been associated with it.

In combination with the ban on imported raw oil of Russian descent in some countries against which sanctions have been imposed, price restrictions prohibit citizens of "Great Seven" countries to provide services related to marine transportation of raw oil of Russian origin at a price higher than $ 60 for barrel.

Instead of an absolute prohibition on providing such services, price restrictions were intended to continue supplying Russian oil to the world market, but at the same time reduce the income that Russia could receive from its sale.

Although in the first stages of price limitation managed to reduce Russia's income from the sale of crude oil, raw materials of Russian origin are increasingly sold to countries that are not part of the sanctions zone, both by direct violation of the conditions of price restrictions, and through the purchase of oil transportation services through countries, that is not included in the G7. At this stage, price restrictions should not be canceled, but improved.

Measures that will increase the effectiveness of price restrictions include increased control, as well as the imposition of secondary sanctions against the parties that conduct large agreements with Russian oil. For example, in December, the Great Seven declared its commitment to maintain price restrictions by "imposing sanctions against those who deals with fraudulent actions" and "updating . . . rules and provisions as needed.

" To this end, the United States has announced changes to the accounting process, called to document compliance with the price level. With constant control, measures will help to reach prices. Available sanctions are also a legal basis that can be used and improved to improve efficiency. In particular, coordinated sanctions stimulated the development of new sanctions of the European Union, which are not yet fully operated.

For example, the eighth package of EU sanctions allows it to apply sanctions on persons who contribute to bypassing sanctions. Similarly, the eleventh packet of sanctions contains a tool to counter the sanctions, which allows the EU to restrict the supply of goods to third countries, which are likely to be places of bypassing sanctions (intermediate points).

The EU also develops new rules to criminalize the violation of sanctions, which will create a greater restraining effect on existing sanctions. The new European Union ban on diamond from Russia, included in the twelfth package of sanctions, also prohibits the import of Russian -born diamond jewelry products and imports of Russian -born diamonds, even if they are processed in third countries.

Parallel measures, if they are implemented in other contexts (for example, petroleum products), will lead to further reduction of Russian income, as it will make the acquisition of Russian origin for countries that are not under sanctions. Sanctions against Russia should be stored, strengthened and monitored. Secondary sanctions will play an increasingly important role, forcing entities from non -sanctions countries, reducing or gradually ceasing support for Russian military efforts.

For example, US President Joseph Biden announced in December the possibility of imposing secondary sanctions on foreign financial institutions that contribute to large transactions in support of the Russian military-industrial base. Increasing control over compliance with the standards, for example, intermediary activities, will also increase the efficiency of export control and help prevent Russia's use on the battlefield of goods from the countries to which sanctions have been imposed.