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US Sanctions Against Russia: What You Need to Know

October 31, 2018
Cyrus Newlin and Jeffrey Mankoff
This article was originally published by the Center for Strategic and International Studies (CSIS), along with a searchable database of all sanctions imposed on Russia since 2012. For more on this subject, check out the RM exclusive by Alexey Eremenko, "The ‘Who, What, When’ of Russia Sanctions: A Cheat Sheet for Laymen." 

With a new bill that expands sanctions on Russia circulating within Congress, it is clear that the United States will continue to rely on sanctions as a primary tool for confronting Russia. It is less clear, however, what the many sanctions imposed since 2012 have done to change Russian behavior. Not all sanctions are created equal, and if poorly designed and implemented, sanctions can bring problems as well as benefits for the United States.

Q1: What are the objectives of U.S. sanctions against Russia?

A1: The objectives of U.S. sanctions against Russia are varied but generally fall into one of two categories: sanctions that aim at specific changes in Russian behavior and sanctions that seek to impose costs without being linked to a specific policy outcome.

In the past six years, the United States has imposed more than 60 rounds of sanctions on Russian individuals, companies, and government agencies spanning nine issue areas. When considered individually, most of these sanctions have clear objectives. Ukraine-related sanctions aim to deter further Russian aggression against Ukraine and encourage Russia to comply with the Minsk ceasefire agreement. The United States also sanctions Russian individuals and companies for not complying with North Korea sanctions, for meddling in U.S. elections, and for hacking U.S. entities. These sanctions impose costs to deter future aggressive actions and uphold international standards.

More recent sanctions, including the 2017 Countering American Adversaries Through Sanctions Act (CAATSA) and the April 6, 2018 “oligarch sanctions,” are less tethered to specific policy objectives. CAATSA codified existing sanctions pertaining to Ukraine and implemented new sanctions spanning eight broad issue areas, from corruption and cyber-enabled activities to the privatization of state-owned companies by government officials and arms transfers to Syria. The April 6, 2018 “oligarch sanctions” had a similarly broad mandate: to prevent oligarchs from profiting from a “corrupt system” and to confront “a pattern of malign activity around the globe.” There is no instruction on the steps necessary to lift these sanctions, perhaps indicating an assumption on behalf of U.S. policymakers that the behavior of the sanctioned entities will continue. The objectives of these type of U.S. sanctions are to impose costs, and, possibly, deter future aggressive activities rather than to achieve a discrete policy outcome.

Q2: Are sanctions working?

A2: The answer depends on what we mean by “working.” Some have argued that harsh sanctions imposed after Russia’s invasion of Ukraine tempered the scope of Russia’s land-grab. This is impossible to prove or disprove since the counterfactual is also plausible. Russia could have limited its invasion of Ukraine for reasons other than a fear of sanctions (for example, that invading and occupying Ukraine is incredibly expensive, or that Ukraine’s ground forces proved more resilient than anticipated). Regardless, Ukraine-related sanctions have so far failed to get Russia to abide by the Minsk agreements as Russian forces remain in eastern Ukraine.

Sanctions that target Russian individuals and companies for failing to comply with other sanction programs, such as those on North Korea, have been successful in restricting access to the global financial system. Secondary sanctions mandated by CAATSA have surely made it harder for sanctioned Russian entities to do business. But there is little indication that these have translated into a change of Russian state behavior.

The less clear sanctions are in their stated objectives, the harder it is to judge their effectiveness. It is hard to argue that CAATSA and the oligarch sanctions have “failed” because they were never linked to reversible behavior. But it is equally hard to argue they have worked. The poisoning of an ex-Russian spy and his daughter in Salisbury, England, and reports of ongoing Russian election meddling point to a continued pattern of brazen activity.

Sanctions that impose costs but aren’t designed to change behavior are not without purpose. They identify red lines and uphold international standards. But a switch in the use of sanctions from a coercive to a moral instrument has risks. The benefit of upholding international norms through sanctions should be weighed against the strategic consequences of their misuse.

Q3: How does Russia view U.S. sanctions?

A3: From Moscow’s perspective, U.S. sanctions are part of a larger effort to weaken and punish Russia for standing up for its state interests, and, many Russians suspect, ultimately to force regime change. Moscow draws this conclusion from the increasingly intricate legal structure of sanctions (which make them harder to lift unilaterally, especially when mandated by Congress), the absence of language about how sanctions could be lifted, the seemingly arbitrary nature of when certain sanctions are implemented and whom they target, and the fact that recent sanctions punish Russian private business for the government’s foreign policy decisions. These observations feed a perception that the United States will find a justification for sanctioning Russia no matter what Russia does on the world stage.

Q4: Could sanctions backfire? How?

A4: Many have pointed out that sanctions are not a cost-free tool. Their overuse or use divorced from a larger strategy carries risks.

First, there is the risk that sanctions against Russian oligarchs and companies will make them more dependent on the Kremlin, thus consolidating rather than diminishing support for Putin.

Second, sanctions could exacerbate tensions between Washington and its European allies. Recent sanctions against Russia, including CAATSA and the April 6, 2018 “oligarch sanctions” were imposed by the United States unilaterally. CAATSA mandates secondary sanctions, making European companies, which have much more exposure to Russia, susceptible to penalties from U.S. regulators. Cooperation with the European Union is critical to making sanctions bite since Russia is much more dependent on the European than the American market. Tensions between Washington and Brussels could complicate efforts to maintain a common front and empower voices in Europe who would prefer returning to “business as usual” with Moscow.

Third, over-reliance on sanctions risks eroding their effectiveness, as Russia and other adversaries develop work-arounds (for instance, alternative payment mechanisms that bypass the U.S. financial system). Already, Russia and China are working to reduce their exposure to the U.S.-dominated global financial architecture. The perception that sanctions are part of the “new normal” for U.S. policy toward Russia is likely to encourage and accelerate these efforts—in Russia and elsewhere.

Fourth, if Moscow comes to believe sanctions are permanent and inevitable, it will have less incentive to seek a way out the current confrontation. Sanctions work best when they provide leverage. Overuse of sanctions—particularly those that are congressionally mandated (and thus require congressional approval to withdraw) and not linked to concrete policy objectives—generate little leverage and help entrench Russian views that the ultimate goal of U.S. policy is less behavioral change than regime change. Russia’s belief that U.S. policy aims merely at punishment and containment makes a diplomatic resolution of problems between the two countries less likely.

Author

Cyrus Newlin

Cyrus Newlin is a research associate and the program manager for the Russia and Eurasia Program at CSIS.

Author

Jeffrey Mankoff

Jeffrey Mankoff is the deputy director of the Russia and Eurasia Program at CSIS.

Photo by Paolinio shared under a CC0 1.0 license.