Общий обзор российской экономики в условиях санкционного режима
Таким образом, ущербные последствия санкций ЕС являются неоспоримыми. Однако в специфике механизмов применения санкций ЕС есть лазейки и ограничения, а также удивительная ловкость и устойчивость Российского режима и экономики.
В то же время, санкционный режим имеет слепые пятна и уязвимости, которые Москва смогла успешно эксплуатировать, особенно с учетом опыта в уклонении, который российский режим приобрел с 2014 года.
В данной статье авторы предоставляют анализ некоторых аспектов ограничений ЕС, сосредотачиваясь на конкретных секторах, считающихся эмблематичными и иллюстративными с точки зрения эффективности и лазеек санкций.
Конкретно, авторы рассматривают критические сектора применения санкций ЕС, а именно, российскую нефтегазовую промышленность, производственные отрасли, импорт технологий и банковский сектор, с их спецификой и проблемами. Авторы разрабатывают предложения по решению выделенных проблем.
Секторальные аспекты санкций
Российская зависимость от технологий и высокотехнологичных компонентов, производимых компаниями ЕС и США, критична для военного и гражданского производства. Поэтому с начала полномасштабного вторжения экспорт ЕС двойных товаров в Россию существенно сократился, и режим экспортного контроля принял самую строгую форму.
Однако Россия успешно эксплуатирует лазейки в экспортном контроле для двойного использования продукции, предложенные различными странами ЕС.
Следует отметить, что квалификация товаров как товаров двойного использования – сложный вопрос во всех юрисдикциях. Кроме того, российские компании адаптировались к использованию гражданских товаров для военных целей.
Поскольку российские власти пытаются скрывать участие государства и частных компаний в сотрудничестве с армией и оборонной промышленностью, трудно доказать и подготовить юридические аргументы для включения этих российских субъектов в санкционный список.
Нельзя также забывать, что Росатом непосредственно участвовал в незаконном и криминальном захвате Запорожской атомной электростанции, самой крупной в Европе.
Другим аспектом недостаточной санкционной системы, касающимся военных предприятий, является сложная и переплетенная структура российской оборонной промышленности.
Поэтому авторы призывают институты ЕС и членов государств реализовать определенные меры для решения вышеупомянутых проблем.
Комментарий Томса Ростока
Ограниченные эффекты экономических санкций против России могут быть объяснены несколькими факторами.
Ограниченный эффект западных экономических санкций на Россию: ключевые факторы
Несколько факторов, которые сыграли ключевую роль в определении ограниченного эффекта западных экономических санкций на Россию:
Уникальность санкций
Экономические санкции против России являются непревзойденными. Одновременно с экономическими санкциями, которые были наложены в результате вторжения России на Украину, вред оказывает сама война. Отключение России от западных экономик приведет к снижению ее экономического потенциала в среднесрочной и долгосрочной перспективе.
Потеря молодых людей
Потеря сотен тысяч молодых россиян, которые покинули страну после начала военных действий или мобилизации, также отрицательно сказывается на экономике России.
Желание избежать негативных последствий
Ограниченные эффекты экономических санкций также связаны с желанием России избежать негативных последствий санкций и способностью В. Путина обеспечить то, чтобы российское общество понесло высокие экономические затраты на войну с Украиной. Россия будет стремиться мобилизовать свой народ в поддержку войны, выдержать экономические затраты и избегать санкций насколько это возможно.
Перераспределение экономических отношений
Россия планирует перераспределить свои экономические отношения с Западом на Азию, Африку и Латинскую Америку, а также партнерствовать с некоторыми соседями для избежания санкций. Возможно, что у России есть шансы на успех в этом деле, поскольку она мотивирована, а некоторые из ее партнеров видят в этом возможность обогатиться. Это позволит России продержаться в условиях давления Запада достаточно долго для того, чтобы исход войны был определен на поле боя, а не из-за неспособности российской экономики поддерживать усилия в военное время.
В общем, несмотря на ограниченные эффекты, Россия будет стремиться продолжать бороться, как на поле боя, так и на экономическом фронте, чтобы выжить в лице экономического и военного давления.
Commentary by Maria Perrotta Berlin
Интернациональные усилия по помощи Украине в войне и отражении российской агрессии требуют продолжения военной помощи в первую очередь, а также финансовой поддержки страны. Однако еще один дополнительный элемент представлен санкционным режимом, наложенным на Россию.
Санкции как средство международных отношений обычно используются для влияния на поведение других стран или субъектов. Как таковые, их историческая запись, мягко говоря, разношерстна. Обзор, проведенный Хуфбауэром и др. (2009 г.), рассматривает все случаи наложения санкций в 20-м веке и приходит к печальному выводу, что санкции оказались успешными в достижении заявленной политической цели едва ли в трети случаев (70 из 204). Вероятность успеха при достижении политического результата, конечно, варьирует с тем, какова конкретная предполагаемая цель, а также какой режим находится на месте в целевой стране. Возможность прекращения военной агрессии, например, была одной из самых редких.
Однако, санкции имеют неоспоримые экономические последствия. Смотря на исторические случаи, когда ущерб ВВП мог быть точно измерен, обычно оценивается, что в среднем происходит снижение годового роста на 2-4% в течение продолжительного времени, длится в среднем 10 лет и до 3 лет после снятия санкций. Это очень важно. В контексте текущей войны и более общем обращении с такими агрессивными империалистическими тенденциями, которые Россия показывает, важно ограничивать ресурсы, как военные, так и экономические, которыми распоряжается страна для проведения текущих и будущих потенциальных атак схожего характера.
There is more to it. This is also a war of information and disinformation, fought with propaganda and alternative narratives. The sanctions and their impact affect public opinion, internationally as well as inside Russia. Russian propaganda, including presidential speeches, make a big point of claiming the sanctions don’t work. Internally, this fills the obvious function of hiding and denying the disastrous consequences of the war, and fits well with the common narrative of Western decline, reflecting the tale that Western countries are struggling to maintain their economic, political, and cultural dominance. Even in the presence of biased propaganda and information censorship, most studies suggest that sanctions have a negative impact on the population of targeted countries, which are likely to be directly perceived and objectively felt. They include shortages of essential goods like food, clean water, medicine, and healthcare (see a review of studies in Berlin, 2022). They cause discontent and unrest in the population, which under specific circumstances may lead to protests and even the overthrowing of responsible regimes. Because of the dearth of reliable statistics and information, it is difficult to gauge from outside exactly how much the shortages due to sanctions are felt by the Russian population at the moment, and in what ways everyday life is affected. However, an analysis of observable factors speaks of long-term consequences, that will likely put the country on a permanently inferior growth trajectory (Berlin and Roine, 2022). As for the public opinion and discontent among the elites, there are of course continuous speculations, but the likelihood and potential outcome of a coup or regime overthrow are very hard to foretell.
Internationally, the claims to deny the effectiveness of sanction try to foment fatigue in the West, and win allies in the South. After a year of war, and when other issues compete for voters’ attention, including the high inflation and economic downturn that were sparked by the war itself, some commentators claim that public opinion in the West will tire of the conflict in Ukraine and start resenting the use of taxpayers’ money for military and financial aid. There are as yet no clear signs of this, rather the opposite might be true. Many were positively surprised by the unity and decisiveness of response within the EU, within NATO, and the larger group of Ukraine’s international allies, and found therein an impetus to rally around their flag. The fear is though that public opinion might turn if the perceived sacrifices associated with supporting Ukraine are portrayed as in vain, based on claims such as that Russia is not hurt by the European oil embargo, for example, or not as much as consumers in EU countries are hurt by the increased electricity prices. Similarly, in the global South, where the United Nations are now warning of several negative developments, including food shortages caused by the war and dwindling foreign aid budgets linked to the economic downturn, as well as other humanitarian crises, the Russian propaganda sees an opportunity to blame this all on the situation in Ukraine. Low- and middle-income countries that already felt neglected within the international community during the Covid pandemic may sympathize with this view. A gaping chasm in the UN general assembly and other important international fora risks undermining progress in many undertakings that today require a broad global support, including climate goals and global health, but also the very same issue of threats to international order, as posed by Russia’s behavior. It is therefore fundamental, also for these reasons, that the economic consequences of both the war and the sanction regime are correctly portrayed, within Russia, within the sanctioning countries, and all around the world.
Besides oil and gas, Langot et al. (2022) also show, through simulations, that limiting export to Russia has way larger potential to bring down GDP growth than purely curbing import from Russia. In this respect, the sanction regime is already supplemented by the broad boycott that western companies and multinationals voluntarily subscribed to. The authors point to several reasons why this still falls short. Among others, the same purposefully complex ownership structures and financial networks that in peacetime abet fiscal evasion and money laundering, make it now difficult to enforce sanctions and help entities to evade them (Nyreröd et al. 2022). A radical approach to deal with many of these issues is advocated for example by the International Working Group on Russian Sanctions – a Cold War 2.0 approach. This would entail a “negative list” approach to sanctions, identifying specific activities or entities that are excluded from sanctions and permissible, and licensing them on a strict case by case basis, rather than listing all prohibited activities or entities. In other words, a negative list identifies what is allowed, while everything else is not allowed. There are several advantages to using a negative list approach for sanctions:
A negative list approach allows for less flexibility, removing the need to constantly identify new prohibited activities or entities as they arise to evade and go around current sanctions. This way, a negative list approach can help prevent entities from evading sanctions by exploiting loopholes or engaging in similar activities that are not explicitly listed as prohibited. By identifying specific activities or entities that are allowed, a negative list approach can help prevent unintended consequences and ensure that the sanctions are effective. This can be particularly important in fast-changing industries or political environments, where new risks may emerge quickly and require an immediate response.
A negative list approach can be more efficient than a positive list approach, as it focuses on identifying few permissible activities or entities. These would be centered on strictly humanitarian needs, for example. This can save time and resources, both for those implementing the sanctions and those affected by them, and contribute a more positive image for the sanction regime as a whole by highlighting the components of international trade more directly linked to the needs of the population.
Overall, it is though still important to ensure that there are effective enforcement mechanisms in place to ensure compliance with the sanctions.
In summary, improving and expanding the sanction regime is an important complement to other means of supporting Ukraine. Sanctions have important economic consequences that limit Russia’s resources and space of maneuver in continuing its senseless war of aggression, or planning new ones. Two proposals going in the direction of increasing the effectiveness of the sanction regime are the use of escrow accounts for oil and gas trade, to add economic incentives and reduce external effects of the price cap, and a negative list approach to sanctions, to make them more comprehensive. The perception and narratives about the impact of sanctions also have a powerful impact on public opinion and indirectly affect the collective endeavor to support Ukraine and its success.
Commentary by Vytautas Kuokštis
The authors analyse EU’s sanctions on Russia, covering both the implemented measures as well as certain deficiencies of the sanctions’ regime and, consequently, suggest how the sanctions can be expanded and improved.
They correctly note that the current sanctions’ regime “is unprecedented in scale and effects”. Indeed, as also pointed out in the paper, Russia has surpassed Iran as the most sanctioned country in the world. Due to the unprecedented nature of the sanctions it has been – and continues to be – rather difficult to provide precise forecasts regarding their effects. The lack of precedent has to do with the scope and depth of the sanctions as well as the nature of the target – a large and relatively developed economy.
The academic literature on sanctions has for a long time focused on whether sanctions “work” – i.e., whether they tend to achieve the intended goals. Some authors claim that they often do not, which would raise the puzzle of why sanctions are imposed in the first place. Others retort, however, that measuring effectiveness depends on what the exact goal is. If the goal is to change the target’s major policy or, even more ambitiously, the target’s political regime, then indeed most sanctions historically have been a “failure”. Nonetheless, there can be other goals, such as signaling a political position and deterring future undesirable behavior by the target and especially others or by weakening the target’s economic capabilities in the longer run, making it more difficult for the target to pursue actions that are opposed by the senders.
Seen in this light, it would be hard to describe the EU’s (and “the West’s” more generally) sanctions towards Russia as ineffective or a failure. Certainly, forcing Russia to stop its war and retreat from Ukraine would be the most desirable effect of the sanctions but this was never a scenario with a high chance of coming to fruition, especially in the short run. Thus, one could disagree with the authors’ assertion that a number of factors “have made it hard to achieve the main goal of sanctions – forcing Russia to stop the war”. In fact, even if all the additional measures proposed by the authors (and perhaps yet other steps) were implemented, it would be hard to expect that Russia would discontinue its efforts due to those sanctions. On the other hand, I would concur that, as the authors point out, sanctions did have an important effect on Russia’s economic prospects and its ability to wage war, and yet, at the same time, “the sanctions alone can never significantly alter Russian actions and destroy its military capabilities quickly”, and continued military support for Ukraine is vital.
The authors provide a good overview of a number of important areas of sanctions, including the energy sector, manufacturing, and finance. They also thoroughly identify a number of gaps in the sanctions regime and propose numerous ways of how these gaps can be closed or at least narrowed. These policy proposals can be of important value to officials considering the future development of the sanctions. Furthermore, it is correctly pointed out that the coordination between different actors imposing sanctions is of primary importance.
One area which has not been covered in the report has to do with Russia’s currency and how it has been affected by sanctions. Initially, the ruble depreciated very sharply, with panic settling in the Russian financial market, and a potential risk of a severe financial crisis. However, the situation was subsequently stabilized due to the effective measures by the Russian Central Bank as well as the West’s chosen particular approach to sanctions. The latter emphasized restrictions on exports to Russia, while still largely leaving major imports from Russia intact – due to the perception that time was necessary to find alternative sources of energy. Given a significant reduction in imports and the high value of exports (sustained by the high price of gas and oil), in 2022 Russia saw a very considerable expansion of its trade surplus – it is thus only natural that the ruble strengthened. At the same time, one must point out that, contrary to Russian propaganda and misconceptions expressed by some commentators, a stronger ruble in and of itself was neither a sign of the Russian economy’s strength nor that the sanctions “did not work”. Instead, it was a result of the initial asymmetric nature of the imposed sanctions in terms of the emphasis on exports versus imports. Indeed, with the West imposing an embargo on oil imports and the price ceiling, the ruble again started weakening at the end of 2022-beginning of 2023.
One aspect worth considering is the potential of certain tradeoffs regarding actions taken by the EU. Imposing sanctions always carries costs and benefits, and there are also questions of sustainability and political feasibility. In general, I am in full support of toughening the sanctions’ regime but one might question whether, given that there will usually be some level of opposition to stronger sanctions, some political capital and effort might be spent on other areas, in particular stronger military and economic/financial aid to Ukraine. Of course, these different sets of actions are not mutually exclusive and can (and indeed have been) pursued simultaneously – my only remark is that this is something to potentially take into account, in case a situation arises where one has to decide on which course of action is likely to bring the largest benefit for Ukraine.
Finally, I fully agree with what I take to be one of the authors’ key messages, namely that one needs to engage in constant learning and adaptation of the sanctions’ policy. With time, the target’s regime and economic actors in the targerted country learn to find ways to adapt and mitigate the sanctions’ regime (in economics’ parlance, elasticities are larger in the longer run). Therefore, there is a need for constant thorough monitoring of the regime’s implementation and potential loopholes. This report serves as a valuable piece of information in this endeavor.
Commentary by Rebecca Harding
Introductory Remarks – Why Economics and Trade Matter in Modern Conflict
The battle lines are drawn, not just between Russia and the “West” (the United States, NATO, the European Union and allies such as Japan, South Korea, Taiwan and Australia), but also between China and the “West”. They are drawn across finance, technology, commodities such as oil and wheat supply chains, and increasingly over human rights, climate change. As such, these battle lines challenge the very nature of market economics and trade itself. In short, who we do business with, how we do business and what that business entails, has become the concern of national strategy in a way that has not been seen on this scale before; in short, trade has become strategic as the concept of military power alone has diminished in importance.
This is the battle for the 21st Century. Nation states are using trade to balance their domestic and foreign policy interests in a world where the prospects for Mutually Assured Destruction (MAD) has limited the prospects for direct military confrontation between great powers. Although as we can see with Russia at present, the nuclear peace is fragile. So how do Nation States protect national interests, build power and constrain aggression in an adversary and can it ever be successful?
The Challenge of Using Sanctions
The authors focus on the EU sanctions against Russia and to this extent highlight the institutional complexities and economic consequences of the measures taken in Europe rather than globally. However, they correctly point out in their introduction that the scale of sanctions is unprecedented and targeted at reducing the military capabilities of Russia both in its current actions in Ukraine, and in the future as well.
The global response is being exercised through sanctions, export controls, access to technology and access to financial markets and has several goals: to starve Russia of access to revenues, foreign currency, inward capital flow and technology in order to restrict the flow of cash to its military immediately and its investment in military R&D and weapons development in the future; to isolate Russia geoeconomically and to act as a deterrent to further action because of this exclusion and isolation.
What is clear, however, is that there has not been an end to the fighting in Ukraine. It has turned into a war of attrition. Given that the West is itself constrained by the need to limit the risk of nuclear confrontation, the question now is how the sanctions regime can be tightened further to limit Russian military action now and in the future.
The Law of Unforeseen Consequences
The authors point to four main areas where sanctions could be tightened and aligned across the EU, and potentially beyond: oil and gas, manufacturing, technology and military production and the banking sector. These have so far borne the brunt of sanctions and there is still more that can be done in the form of Western business and commercial operations in Russia, closing loopholes in the sanctions regimes between allies, making export controls over dual-use goods and military use of commercial goods consistent, and taking out all Russian banks from the SWIFT financial system that have any relations with the Russian military or Russian government. The authors suggest a range of more sophisticated screening and pricing controls in all of these areas that would represent a stringent tightening of economic measures.
The challenge to the full effectiveness of a trade and sanctions regime rests in the nature of trade itself, however. This is the case for several reasons, not least of which is Russia’s preparedness since 2014 for trade diversion to evade sanctions and similar economic measures which the authors acknowledge. But the real challenge rests in the nature of trade and supply chains which make them prone to fraud and money laundering: an example serves to illustrate the point.
Implementing tighter sanctions regimes is a strategic objective that needs to be considered carefully. As the above example suggests, there are limitations in the extent to which data can be tracked down to the level, for example, of commercial goods used for military purposes, how they are funded and what their end use is. This has an impact on the banking sector in allied businesses and the likelihood is that the largest banks simply stop funding any activity that might present a compliance risk – this is certainly what has happened within the biggest banks since February 2022.
There will be a longer-term impact of sanctions on Russia’s military capability if the determination of the EU and its allies to maintain and strengthen its access to technology and finance. However, an “all out” economic war like this has unforeseen consequences which will spill over into the global trading system: if we start to include commercial goods, such as drones, in our definitions of dual use goods, then the numbers of supply chains affected will expand. This is at the best of times difficult to monitor and control, but as the scope expands becomes almost impossible.
The second longer term consequence of sanctions is that it has the potential to bring Russia and China closer together. The West’s “strategic competition” with China involves access to military technology and finance increasingly in the same way that it is using export controls, sanctions and industrial policy against Russia. It is likely that this will accelerate the development of the digital renminbi and the Russian and Chinese alternatives to the SWIFT messaging system.
In the end, support to Ukraine will have to include military hardware, economic, trade and financial measures to limit Russia’s capacity to continue with the conflict in Ukraine. But this raises important questions about the “endgame”. While it may be possible to engineer a ceasefire with appropriate economic and territorial gains for Ukraine, bringing Russia back into the global economic system is unlikely in the near future. In itself this may be a desired outcome, but it leaves Russia with a continued sense of grievance; and because it is in the nature of economic conflict that “war” is never declared and there is no cohesive strategy, it is equally the case that there may be no ultimate “winner”.
Banking Sector
The Russian dependency on the western payment systems, banking technologies (including cryptography and authentication systems), and the critical importance of unimpeded financial transactions for the commodity trade make the Russian banking system one of the key targets for the new restrictions.
At the same time, it should be taken into account that the disconnection of the Russian banks from SWIFT does not limit their ability to make payments in foreign currency but only slows down the process and makes it more expensive due to the appearance in the operations of intermediate banks of third countries.
Another problem is the continued operations of the European banking service companies, which provide technical maintenance and secure operations to the Russian banking system.
One of the most vivid examples is OpenWay Group, a multinational company developing and delivering the Way4 system based in Belgium, which supports the Russian payment system "MIR," introduced after Visa and Mastercard’s exit from the Russian market. Russian customers of the OpenWay Group include many sanctioned entities such as Sberbank, Alfa Bank, and VEB.RF, Russian Regional Development Bank, VTB Bank, Bank of Moscow, Rosneft, Lukoil (Licard), etc. Operating through several Russian subsidiaries and shell companies in Malta, the OpenWay Group tries to deny any connection with the Russian banks under sanctions. Still, in April 2022, Maltese company OpenWay Holdings Ltd sold its stake in the subsidiary Openway Service LLC (St. Petersburg, Russia) to its Russian management, which is deemed as a fictitious redistribution of assets. At the same time, the OpenWay Group’s subsidiaries are contractors in numerous ongoing Russian public procurement projects. Yet again, such actions are possible due to the non-exterritoriality of sanctions and their vague wordings, allowing for the operations’ continuation.
Therefore, the authors urge EU institutions and member states to take a number of actions against Russian banking system:
Manufacturing Industries
Although oil and gas account for the most significant portion of Russian income, the export-oriented manufacturing industries loom large in the overall structure of Russian export, with the European market as the end consumer. The main sectors affected by sanctions are metalworking, wood industries (export-oriented ones), and machine building.
This phenomenon is partially explained by the reserves of spare parts and machine tools stockpiles, which started to drain only by mid-summer 2022. Secondly, the seemingly civilian character of these enterprises shields them from the international restrictions, despite their active involvement in the military production and contribution to the Russian state budget. Also, the continued presence of the Western companies which supply the machine tools and servicing, contracted or acquired before the full-scale invasion, constitutes a critical problem. This is an issue because the lists of sanctioned enterprises differ significantly between the EU, USA, and other countries, which protects European companies from any liability.
So far, Danieli has not announced any exit from the Russian market, termination of investments or new projects, restriction of the business activity, or any other form of reduction of presence in Russia. The company also continues to recruit employees in Russia and implement various projects across the country.
Therefore, the EU can take several steps to constrain Russian manufacturing industries:
Executive Summary
The current sanctions regime imposed by the EU is unprecedented in scale and effects on the Russian aggressor. The deteriorating results of those restrictions on the military capabilities of the Russian Federation are undeniable. However, the existing sanction regime is not entirely flawless.
The complexities caused by the EU institutional approach, the scope of restrictions and extent of the economic relations to be severed, and the political implications of the international security crisis have made it hard to achieve the main goal of sanctions – forcing Russia to stop the war.
This paper, prepared by Ukrainian analysts, identifies several issues, which must be improved to make the sanction regime more efficient:
Conclusion
The number of sanctions introduced by the EU against Russia can be considered unprecedented. The constant increase of the sanction pressure plays an important role in limiting Russian military capabilities. Despite the complex institutional architecture and strict adherence to its internal procedures, the EU has demonstrated sufficient flexibility and readiness to respond jointly to new challenges. This approach proves that support for Ukraine remains strong and European solidarity is steadfast.
However, from the Ukrainian perspective, there are serious problems that the EU must address to improve the existing regime of sanctions and restrictive measures against Russia:
The recommendations suggested above can be used to mitigate the flaws of the existing sanctions regime. However, the sanctions alone can never significantly alter Russian actions and destroy its military capabilities quickly. Therefore, the sanctions’ pressure must be coupled with extensive military and financial support for Ukraine.
References
S&P Market Intelligence. (2022, October.) The Impact of Russia’s Invasion of Ukraine: A trade finance compliance perspective. Retrieved from: https://cdn.ihsmarkit.com/www/prot/pdf/1122/Trade-Finance-Compliance-Perspective-Russia-Invasion-Ukraine-Impact-Oct-Update-Whitepaper.pdf?elq=36ef35de9e2f4a50834c6e88300fa559&elqCampaignId=49847&elqTrackId=107a594b89eb44b184cc12ea4fb58246&elqaid=172321&elqat=1