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bne December 2020
Opinion 69
COMMENT:
The problems with sanctions
Lindsay Mackenzie in Glasgow
"On October 23 the United States imposed sanctions on a Russian government research institute for its links to malware used to target critical infrastructure.
“The Russian Government continues to engage in dangerous cyber-activities aimed at the United States and our allies”, Treasury Secretary Steven Mnuchin said in a statement.
The announcement came only days after the State Department revealed plans to extend sanctions against the Russia-led Nord Stream 2 gas pipeline. The US has said it is prepared to use a range of sanctions to halt the project which has around 150km left to go in Danish and German waters.
Calls for broader sanctions on Nord Stream 2 have grown louder since Russian opposition figure and anti-corruption campaigner Alexei Navalny was poisoned in August with
a nerve agent from the Novichok family. In September German Chancellor Angela Merkel signalled the project was
a potential target for retaliation. So far, the European Union has sanctioned six Russian government officials with asset freezes and travel bans instead. Announced on October 15, the EU said the attack on Navalny would only have been possible with the consent and involvement of the Russian Presidential Executive Office and Federal Security Service.
This flurry of sanctions is not surprising. They have become one of the most commonly used instruments in the foreign policy and diplomatic toolkit and an inevitable part of responding
to a host of international crises. They’ve also become the cornerstone of the West’s Russia strategy, and have been used to counter Kremlin belligerence since Moscow’s 2014 annexation of Crimea and invasion of eastern Ukraine. The problem however, is that they don’t work very well.
Theory and practice
The theory behind sanctions is relatively simple; apply enough economic pressure and the target will change its political behaviour. It’s essentially about carrots and sticks, using a combination of coercion, deterrence, selective punishment and condemnation. They can be introduced by governments or through institutions, and can target countries as well as complicit companies and individuals. Before 1990 they were
The problem with sanctions on Russia is there are too many of them and they don't work very well
rarely used. Now the EU alone has over forty different sanction regimes in place.
But their effectiveness is questionable. History is littered with examples of sanctions bolstering the targeted government, or even inadvertently harming a population while those in power evade the consequences. These risks have abated as sanctions have become smarter and more targeted, but their record of making a difference where it matters most remains unremarkable. Even where they appear to have been successful, it’s not always easy to disentangle the sanctions from other pressures.
As for Western sanctions on Russia, they have expanded in scope over the years to respond to not just events in Ukraine but a host of ‘malign activity’; from cyber attacks and democratic subversion to money laundering. Sanctions target individuals, companies and whole sections of the Russian economy. There is no doubt they have had an economic impact. The business environment has deteriorated and become more unpredictable. Targeted individuals shut out from the West have faced financial frustration. Russia’s energy, defence and finance sectors, which had relied heavily on Western capital and technology before being cut off, have been hit particularly hard. The long term consequences for something like advanced oil exploration could be significant.
Yet the political impact has been minimal. The initial introduction of sanctions back in 2014 did little to loosen Moscow’s grip on Crimea or hamper its desire to stir conflict in eastern Ukraine. Six years on and the war continues to simmer just enough to avoid becoming frozen. Some analysts credit sanctions with deterring further military escalation into Ukraine, but this ignores that Moscow’s priority has been political leverage not physical land. Despite various attempts to re-charge the peace process the Kremlin has remained stubbornly unwilling to compromise.
In the meantime Moscow has felt comfortable enough to play spoiler, flexing its military power and continuing a political war against the West. Its actions, like the use of a military grade nerve agent in Salisbury UK, have often offered little
in the way of plausible deniability. That Moscow seems to have been behind targeting Navalny with a similar toxin in Tomsk
is especially brazen.
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