Russia sanctions: pre-empt or punish?
As the Russian army begins a 10-day programme of military drills with its Belarusian counterpart, speculation continues as to what sanctions might be imposed to deter or punish an incursion into Ukrainian territorial sovereignty, and in what circumstances.
In the United States, lawmakers appear closer to bipartisan agreement on a legislative package, contained in the Defending Ukraine’s Sovereignty Act, that could include asset freezes on senior political and military figures (including President Putin, potentially), freezes on Russian banks, sanctions on the Nordstream2 pipeline, and/or cutting off Russia from the SWIFT global payments system.
However, there is disagreement – along broadly partisan lines – as to whether sanctions ought to be imposed in anticipation of an incursion, or remain in readiness to deter, or punish, subject to a ‘trigger event’ – with Republican senators generally favouring sanctions being imposed before an invasion. The leader of the Democrat party in the Senate, Chuck Schumer, is reported to have described that approach as ‘taking away the disincentive from Russia invading’.
During a webinar on possible Russian sanctions, lawyers at the firm Steptoe said that, regardless of any legislative action, there are numerous existing regulatory authorities possessed by the US departments of State, Commerce and Treasury – in addition to the US President’s authority to issue executive orders, under which stronger measures, including designating individuals and entities and the use of travel bans, might be taken without Congressional approval, and implemented rapidly.
DC-based partner Meredith Rathbone said that it was probable that agencies have already prepared a number of different sanctions packages, with the measures’ severity proportionate to actions undertaken by Russia.
Steptoe senior counsellor David O’Sullivan, based in Brussels, pointed out that, while there have been media reports of varying opinions amongst international allies as to what might constitute the most appropriate response to Russian aggression, ‘behind the scenes, there is an unprecedented degree of agreement, which reflects ongoing, intense, diplomatic activity.’ It was also noted that UK government statements about the situation have lead to speculation that it may take stronger measures than the European Union – taking advantage of new sanctions powers under the provisions of the Sanctions and Anti-Money Laundering Act.
UK foreign secretary Liz Truss is expected to visit Moscow, 10 or 11 February. In anticipation of her arrival, Russia’s ambassador to the United Kingdom Andrey Kelin has warned that if the UK ‘are going to Russia to threaten us with sanctions yet again, then this is a useless affair: we read everything, we see, know and hear everything. In this case, our dialogue in Moscow will probably be rather short,’ according to Russia’s Tass news agency. Kelin, added, said Tass, that there would be no point in Truss travelling to Moscow to continue with ‘threats’ which could just as easily be made on Twitter.
Russia ‘has deepened hold despite sanctions’
The authors of a study published by the Congressional Research Service on 18 January outlined the extent and sectoral impact of sanctions against Russia imposed since the annexation of Crimea in 2014, noting that they had negatively affected the Russian economy, but arguably less than the cumulative effect of Covid-19 and the drop in global oil prices.
‘Despite almost eight years of escalating sanctions, Russia has deepened its hold over Ukraine’s occupied Crimea region and separatist regions in eastern Ukraine. Russia has extended military operations to nearby waters and has engaged in a build-up of military forces near the Ukrainian border. Russian officials have intimated that Russia could take further military action in Ukraine in pursuit of Russia’s national security interests.’
For the CRS report see: https://crsreports.congress.gov/product/pdf/R/R45415
