Sanctions Against Russia Proving Effective, Can Be Strengthened, Experts Say

While Western sanctions against Russia haven’t fully succeeded, they’ve been more effective than widely assumed and have played a significant role in limiting Russia’s economic growth, economists and international relations experts said. The experts urged the U.S. and other Western countries to continue imposing sanctions against Russia, which may dissuade the country from pursuing destabilizing activities in Ukraine and interfering in foreign elections.

The U.S. has imposed a wide range of financial, technological and travel-related sanctions against Russia over the last several years, including a recent set of measures in April that significantly expanded its sanctions authority (see 2104150019 and 2104240001). The cumulative impact of the Western sanctions has been “much greater than previously understood,” said Maria Snegovaya, an Atlantic Council expert, speaking during a May 3 event hosted by the think tank. Snegovaya and Anders Aslund, another Atlantic Council expert, argued in a report this week that the sanctions have tempered Russian President Vladamir Putin’s military aggression and could have more of an impact if they are strengthened.

Aslund called for “greater transparency” surrounding Western sanctions and said they should be “gradually” tightened on Russia’s financial sector to limit the government’s resources. He also said the U.S. should do more to support its sanctions agencies. “The weakest link is actually enforcement,” Aslund said, specifically mentioning the Treasury Department’s Financial Crimes Enforcement Network. He said FinCEN “needs to be reinforced and greatly expanded.”

Elina Ribakova, deputy chief economist at the Institute of International Finance, agreed with the report’s recommendations that sanctions should be more multilateral. She also said countries should only impose sanctions if “there is a way of scaling up and also scaling down those sanctions” through a carrot-and-stick approach, which incentivizes a sanctioned country to change their behavior through the promise of sanctions relief. Ribakova said she has noticed a decline in those promises. “There are almost no more carrots we can offer,” she said. “I think that’s something that needs to be studied.”

While the experts said the sanctions have been effective at times, Sergey Aleksashenko, former deputy chairman of the Central Bank of Russia, argued that the sanctions have been mostly ineffective. He said they haven’t stopped Putin’s “aggressive policy” toward Ukraine and cited recent cyber attacks committed by the government. “There are not any negotiations looking for a peaceful political solution,” he said during the event. “I don’t believe the sanctions were very effective.”

Aleksashenko urged Western countries to continue targeting Russia’s oil sector, the “most sensitive part of Russia’s economy,” including through increased export restrictions on software and other equipment to Russian state-controlled oil companies. “Russia is definitely not isolated in the international arena,” he said.