Non-Military Security

European Sanctions on Russia: Overview of Implemented Packages and Assessment of Their Effectiveness and Weaknesses

Timotej Kováčik

After the onset of Russian aggression in Ukraine, the European Union (EU) promptly chose to support Ukraine, not solely through diplomatic means or by providing arms, but also by implementing sanctions against Russia. To date, the EU has introduced eleven sanctions packages aimed at the Russian economy, its capacity to fund the conflict, and targeted sanctions against oligarchs and Kremlin officials. However, the rate of sanctions imposition has gradually decreased over time, and new issues have surfaced, notably the circumvention of sanctions via third-party nations. The Union is actively endeavouring to tackle this challenge through various measures.

Sanctions, as an economic and foreign policy instrument of the European Union (EU), have become publicly known, especially after the start of the Russian aggression in Ukraine in February 2022. However, the EU started to use its restrictive measures as early as 1994, after establishing the EU’s Common Foreign and Security Policy (CFSP) under the adopted Maastricht Treaty. Not only the EU but also academics claim that the imposition of sanctions is one of the EU’s key foreign policy tools, a tool for promoting its interests and values and perhaps the one with the most substantial impact on the country against which it is imposed. Sanctions significantly affect the economy of the impacted states on their trade with the EU. They should also have either a deterrent effect or change the behaviour of the states and actors on which they are imposed.

Sanctions have already been imposed on Russia following its annexation of Crimea. The first-ever restrictive measures were agreed by the then 28 EU countries on 17 March 2014, following a falsified referendum on the Crimean Peninsula. Various other packages of sanctions followed, for example, after the downing of flight MH17 by pro-Russian separatists on the territory of eastern Ukraine.

The numbering of individual sanctions packages began after the Russian attack on Ukraine in February 2022. Since 24 February, the EU has imposed eleven sanctions packages, with a twelfth currently under negotiation between Member States. Each package contains several measures, ranging from bans on the import or export of specific commodities, freezing the assets of the state or of persons politically or economically linked to the Kremlin, to, for example, excluding Russia from the SWIFT financial transaction system. The dynamics of the adoption of restrictive measures were unexpectedly swift after the start of the aggression, and, like all Union aid to Ukraine, the packages were adopted at short intervals and included large volumes of banned goods, services or frozen funds. Just four days after the Russian attack, the EU imposed three sanctions packages on entities such as the Central Bank of the Russian Federation, President Vladimir Putin, Foreign Minister Sergei Lavrov or banned Russian aircraft from flying into European airspace. The EU has targeted €44 billion of EU exports of goods and services to Russia (49% of all exports in 2021) and €91 billion of imports from Russia to EU countries (58% of all imports in 2021). A large part of the import volumes is accounted for by the ban on imports of Russian coal and oil (seaborne oil imports; Slovakia has an exemption for imports via the Druzhba pipeline), which were adopted by Member States in the fifth and sixth sanctions packages respectively.

The pace of adoption of sanctions has slowed over time, with two packages adopted in 2023 (the tenth and eleventh). A third is being intensively negotiated these days. The slowdown does not have to mean weaker EU support for Ukraine but also signals exhausted possibilities for the EU to impose sanctions. The possibility of imposing a ban on the export of diamonds to Russia is mentioned in the context of the 12th package. It is questionable whether the new sanctions will be adopted before the end of 2023; it will also depend on the unity of the EU and a potential veto from Hungary. An oft-mentioned issue is whether the EU has already banned Russian gas imports. However, this has yet to happen, and due to the continued high dependence of some countries (e.g. Slovakia) on Russian gas, this is not even conceivable.

The adoption of sanctions follows proposals by the European Commission and the EU High Representative for CFSP at the level of foreign ministers in the Council of the European Union. Each package must be adopted unanimously. This signifies the unity of all states, i.e. it strengthens the credibility of the whole process. On the other hand, sanctions can become a hostage to the pursuit of the national interests of one state, which can blackmail the others. While adopting the sixth sanction package, Budapest negotiated to remove Patriarch Kirill of the Russian Orthodox Church from the proposed list of persons to be sanctioned. Leaving aside the sanctions imposed on Russia, a perfect example of the abuse of the necessary unanimity in the adoption of sanctions is the case of Cyprus in 2020. It blocked the imposition of sanctions against Belarus for three weeks because of a national dispute with Turkey. Finally, it achieved European support for itself in the summit’s conclusions.

The sanctions’ effectiveness on Russia is debatable, as neither experts nor economists agree on this issue. In some articles, Russia’s GDP growth in 2023 is described as strong, with an increase of more than 2%. However, this study draws attention to misleading data from 2022, when sanctions did not hit Russia in the first quarter; therefore, the comparison may be distorted. This is also the case of the oil embargo. The first article assesses it as ineffective because the price cap does not work. In contrast, the second piece mentions a rapid fall in oil sales revenues of more than 50% between January and April 2023. The study’s author admits that assessing the price cap is debatable, but he considers the oil import ban as a critical variable in Russia’s budget crisis. This article is inclined to the view that European sanctions have yet to achieve their objective and attributes this to the EU’s weak position on, for example, payments for natural gas, which some countries still have to import from Russia. Another problem is that the majority of the world has not joined the EU in accepting sanctions and condemning aggression, but only by a few other Western countries, which has led to the possibility of redirecting trade routes to countries such as China, India and Turkey. These obstacles lead to the potential ineffectiveness of anti-Russian sanctions. Still, it is currently difficult to come up with a solution, as most of the options on which the EU has imposed sanctions have already been exhausted.

A crucial issue of the European sanctions against Russia is their circumvention by European companies and third countries. Several cases have emerged from various countries where individual companies have, despite the sanctions, supplied Russia with goods that could have been used to produce weapons, ammunition or systems for the fighting in Ukraine. Such actions by European companies are also reflected in European states’ sharply increased trade balances with the countries neighbouring Russia. For example, Germany’s exports of goods to Kazakhstan rose rapidly in 2023 compared to the same time in 2022. This suggests that some European firms have indeed stopped exporting directly to Russia but instead are selling goods to its neighbouring countries, which become intermediaries in the whole supply chain and then move the goods to Russia. The EU is aware of this risk and has put forward a number of measures to combat it.
At the end of 2022, the Commission appointed David O’Sullivan as International Special Envoy for the Implementation of EU Sanctions. His task is to speak with third countries to persuade them not to export goods from European countries to Russia and thus not to help its military actions in Ukraine. The question is what real leverage the special ambassador has over third countries such as Kazakhstan or Turkey and whether he can persuade them by diplomatic pressure alone. This lever could be the aforementioned eleventh package, which contains tools to counter the circumvention of the restrictive measures already imposed. In this package, the Union has adopted conclusions that it will strengthen dialogue and cooperation with third countries that are possible intermediaries for re-exporting banned goods to Russia. It also presented a legal mechanism through which the Council of the EU can adopt a ban on the sale, import and transfer of certain goods to a third country cooperating with Russia. Such a measure would apply to exports of previously banned goods to Russia. In reality, representatives of the EU and Member States will seek to resolve potential disputes diplomatically and not to increase tensions between the EU and the countries of the Global South. So far, the new mechanism has yet to be used. Preserving good relations with third countries is vital for maintaining peace in the world as well as for cooperation between Europe and developing countries. The EU and the West need this, for example, when voting on UN resolutions condemning Russia’s aggression in Ukraine because these countries are often in a neutral position, and democratic countries want them on their side.

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