Economic sanctions represent one of the most widely used instruments in international relationships for various social, political and military concerns. They can be imposed by one country (unilateral sanction) or group of multiple countries (multilateral sanction) against other country (or regime) to express their disapproval of the regime and deter the unacceptable behavior.
However, the effectiveness of sanctions is highly debatable. The recent invasion by Russia of Ukraine made again doubtful whether the economic sanctions imposed by the third parties against Russia will have any substantial impact on the current processes.
Economic Sanctions – Commonly Used Mechanism
There are several types of sanctions that can be used depending on the nature of the problem (i.e., annexation of foreign country’s territories, terrorism, violation of human rights, etc.) in international relations. Types of sanctions include but are not limited to economic, military, diplomatic, environmental and sport sanctions. Among them, economic sanctions are considered the most widely used and efficient ones (Morgan, 2014). They represent economic and financial penalties against countries or certain individuals (or organizations) to incentivize the change of their behavior through economic punishments. Economic sanctions may include actions such as imposing trade barriers, setting tariffs, prohibiting trade, restricting financial transactions, etc. (Nurnberger, 2003).
Moreover, in order to minimize negative impacts of sanctions on all civilians, countries frequently apply targeted sanctions against certain individuals, particular organizations or limited regions of the country instead of comprehensive sanctions against whole country (Biersteker, 2018). For example, sanctions can be applied on certain individuals to restrict their travel, freeze their assets, ban transactions, etc.
Authorizing sanctions has a long history dating back to 432 BC, when the Athenian Empire banned trade from Megara in order to crush the economy of the rival country (Benson G.H., 2018). However, imposing sanctions (most often economic sanctions) has become more prominent since the 20th century. The United Nations was one of the main actors initiating sanctions against other states such as Cuba, Libya, Iraq, North Korea, Syria and Vietnam. Following the end of the Cold War, the United Nations Security Council frequently initiates sanctions to suppress civil wars and/or national strife (especially in Yugoslavia and Africa).
One of the latest waves of authorizing multilateral sanctions started in February 2022, as a response of the Russia’s invasion of Ukraine. This is considered as one of the most consolidated actions of multiple states against one regime.
Sanctions Authorized as a Response of Russia’s War on Ukraine
The first big wave of multilateral sanctions against Russia was imposed in 2014 as a response of Russia’s annexation of Crimea region. Three main types of sanctions were authorized by number of governments at that time: (i) Banning the provision of technologies for exploring oil and gas; (ii) Banning the provision of credits for Russian state banks and oil companies and (iii) Restricting travel of the influential Russian Citizens who are close to the President Putin and have been involved in the process of Crimea annexation.
However, having the experience of being sanctioned did not deter Putin from starting new war against Ukraine.
On February 21, 2022 the President of Russia ordered troops to Ukraine. On the same day, the first sanctions were imposed – the Council of the European Union levied travel bans and froze assets on five new individuals (building on the previously imposed sanctions after Russia’s annexation of Crimea in 2014).
Following that, on February 22, the U.S. Treasury imposed financial sanctions against two major Russian state-owned financial institutions – VEB (State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank) and PSB (Promsvyazbank) – that are the critically important institutions for funding Russian defense industry. Moreover, additional restrictions were introduced on Russian sovereign debt (Bown, 2022).
Along with the continuation of the Russia’s invasion of Ukraine, the number of countries authorizing sanctions as well as severity of sanctions imposed against Russia has been increasing. As of now, 30 different governments (including US, EU, Australia, Canada etc.) set sanctions in multiple directions. The authorized restrictions include financial sanctions (including banning transactions), banning international travel and international trade with Russia; number of sanctions have been applied against certain individuals as well (especially those identified was having close relationship with Putin). As a result of the sanctions, Russia’s access to the critical technology needs to fund the war is restricted and the country is excluded from the global financial networks.
Are Authorized Sanctions Effective?
Once the sanctions are authorized the question is whether they can promote the achievement of predetermined objectives; in this case – will the sanctions help to end the war in the near future?
Proponents of the economic sanctions argue that economic sanctions are painful and impose a great pressure on the target country, especially in modern era, with complex supply chains and less division between domestic and international economics (Nurnberger, 2003). On the contrary, history also reveals that dictators and their decisions are not usually affected by the severity of sanctions. They rarely care about the negative consequences (such as limitation to access to the essential goods) of the sanctions that their citizens face. For this reason, the effect of the sanctions is almost never visible immediately and requires a long time to force the change of behavior.
So far, the effectiveness of the sanctions against Russia tends to have the same pattern. According to the White House statement, as a result of authorized sanctions Russia is expected to face a double-digit decline in the Gross Domestic Product (GDP) in 2022, accompanied with inflation of over the 20%. Longer term consequences on Russia’s economy are expected to be more severe. However, the sanctions yet cannot achieve the most urgent goal – to stop the Russia’s invasion of Ukraine.
Benson G.H., M. V. (2018). Reflections on International Sanctions as Conflict Management Tools Within the Collective Security System. Global Journal of Arts, Humanities and Social Sciences, 53-66.
Biersteker, T. E. (2018). UN Targeted Sanctions datasets (1991-2013). Journal of Peace Research, 404-412.
Bown, C. (2022). Russia’s War on Ukraine: A Sanctions Timeline. Washington D.C.: Peterson Institute for International Economics.
Morgan, T. B. (2014). Threat and Imposition of Economic Sanctions 1945-2005: Updating the TIES dataset. Conflict Management and Peace Science, 541-558.
Nurnberger, R. (2003). Why Sanctions (Almost) Never Work. The International Economy, 70-72.