The Ukrainian crisis prompted a number of governments to apply sanctions against individuals, businesses and officials from Russia and Ukraine starting from March 2014. Sanctions were approved by the United States, the European Union (EU) and other countries and international organisations. Russia has responded with sanctions against a number of countries, including a total ban on food imports from the EU, United States, Norway, Canada and Australia. Both these sanctions applied to Russia and Russia's import bans in response have contributed to the collapse of the ruble and the 2014-15 Russian financial crisis.
Background
In response to the Crimean crisis and the subsequent annexation of Crimea by the Russian Federation, some governments and international organisations, led by the United States and European Union, imposed sanctions on Russian individuals and businesses. As the unrest expanded into other parts of southern and eastern Ukraine, and later escalated into the ongoing war in the Donbass region, the scope of the sanctions increased. The Russian government responded in kind, with sanctions against some Canadian and American individuals and, in August 2014, with a total ban on food imports from the European Union, United States, Norway, Canada and Australia.
Sanctions against Russian individuals, companies and officials
First round of sanctions
On 6 March 2014, US president Barack Obama, invoking, inter alia, the International Emergency Economic Powers Act and the National Emergencies Act, signed an executive order that declared a national emergency and ordered sanctions, including travel bans and freezing of their U.S. assets, against not yet specified individuals, later to be determined by the Secretary of the Treasury, in consultation with the Secretary of State, who had "asserted governmental authority in the Crimean region without the authorization of the Government of Ukraine" and whose actions were found, inter alia, to "undermine democratic processes and institutions in Ukraine".
The first round of specifically targeted sanctions was introduced by the US, the EU and Canada on 17 March 2014, the day after the Crimean referendum and a few hours before the Russian president Vladimir Putin signed a decree recognizing Crimea as an independent state, thus laying the groundwork for its annexation by Russia.
The principal EU sanction that day was to "prevent the entry into (...) their territories of the natural persons responsible for actions which undermine (...) the territorial integrity (...) of Ukraine, and of natural persons associated with them, as listed in the Annex". These 17 March sanctions were the most wide-ranging sanctions used against Russia since the 1991 fall of the Soviet Union. Japan also announced sanctions against Russia. These included the suspension of talks regarding military matters, space, investment, and visa requirements. A few days thereafter, the US government announced it was expanding the sanctions.
On 19 March, Australia imposed sanctions against Russia after annexation of Crimea from Ukraine. The Australian government imposed targeted financial sanctions and travel bans on those who have been instrumental in the Russian threat to Ukraine's sovereignty. The Australian sanctions were expanded on 21 May.
In early April, Albania, Iceland and Montenegro, as well as Ukraine, decided to follow the EU and impose the same restrictions and travel bans issued by the EU on 17 March. Slightly earlier in March, Moldova had decided to follow the EU and impose the same set of sanctions against former president of Ukraine Viktor Yanukovych and a number of former Ukrainian officials, as announced by the EU on 5 March. In response to the sanctions introduced by the United States and the EU, the State Duma (Russian parliament) unanimously passed a resolution asking for all members of the Duma to be included on the sanctions list. The sanctions were expanded to include prominent Russian businessmen and women a few days later.
Second round of sanctions
On 28 April, the United States imposed a ban on business transactions within its territory on seven Russian officials, including Igor Sechin, executive chairman of the Russian state oil company Rosneft, and seventeen Russian companies. On the same day, the European Union issued travel bans against a further fifteen individuals. In connection with this, the EU issued a paper stating the aims of the sanctions. The EU states that their "sanctions are not punitive, but designed to bring about a change in policy or activity by the target country, entities or individuals. Measures are therefore always targeted at such policies or activities, the means to conduct them and those responsible for them. At the same time, the EU makes every effort to minimise adverse consequences for the civilian population or for legitimate activities".
Third round of sanctions
In response to the escalating War in Donbass, on 17 July 2014 the United States extended its transactions ban to two major Russian energy firms, Rosneft and Novatek, and two banks, Gazprombank and Vneshekonombank. On 25 July, the EU expanded its sanctions to an additional fifteen individuals and eighteen entities, followed by an additional eight individuals and three entities on 30 July. On 31 July 2014 the EU introduced the third round of sanctions against certain sectors of Russia's economy, including the financial sector (all majority government-owned Russian banks), trade restrictions relating to the Russian energy and defence industries, and additional individuals and entities designated under the EU asset freezing provisions.
On 24 July 2014, Canada announced sanctions targeting Russian arms, energy and financial entities.
On 5 August 2014, Japan decided to freeze the assets of "individuals and groups supporting the separation of Crimea from Ukraine" and restrict imports from Crimea. Japan will additionally freeze funds for new projects in Russia in line with the policy of the European Bank for Reconstruction and Development.
On 8 August 2014 Australian prime minister Tony Abbott announced that Australia is "working towards" tougher sanctions against Russia, which should be implemented in the coming weeks.
On 12 August 2014 Norway decided to adopt the tougher sanctions against Russia that were imposed by the EU and the United States on 12 August 2014. Although Norway is not a part of the EU, the Norwegian Foreign Minister Børge Brende said that it would impose restrictions similar to the EU's 1 August sanctions. Russian state-owned banks will be banned from taking long-term and mid-term loans, arms exports will be banned and supplies of equipment, technology and assistance to the Russian oil sector will be prohibited.
On 14 August 2014 Switzerland expanded sanctions against Russia over its threat to Ukraine's sovereignty. Swiss government added 26 more Russians and pro-Russian Ukrainians to the list of sanctioned Russian citizens that was first announced after Russia's annexation of Crimea. On 27 August 2014 Switzerland further expanded their sanctions against Russia. The Swiss government said it is expanding measures to prevent the circumvention of sanctions relating to the situation in Ukraine to include the third round of sanctions imposed by the EU in July. The Swiss government also stated that five Russian banks (Sberbank, VTB, Vnesheconombank, Gazprombank and Rosselkhoz) will require authorisation to issue long-term financial instruments in Switzerland.
On 14 August 2014 Ukraine passed a law introducing Ukrainian sanctions against Russia. The law includes 172 individuals and 65 entities in Russia and other countries for supporting and financing "terrorism" in Ukraine, though actual sanctions would need approval from Ukraine's National Security and Defense Council.
On 28 August 2014 Switzerland amended its sanctions to include the sanctions imposed by the EU in July.
On 11 September 2014, US President Barack Obama said that the United States would join the EU in imposing tougher sanctions on Russia's financial, energy and defence sectors. On 12 September 2014, the United States imposed sanctions on Russia's largest bank (Sberbank), a major arms maker and arctic (Rostec), deepwater and shale exploration by its biggest oil companies (Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft). Sberbank and Rostec will have limited ability to access the US debt markets. The sanction on the oil companies seek to ban co-operation with Russian oil firms on energy technology and services by companies including Exxon Mobil Corp. and BP Plc.
On 24 September 2014, Japan imposed additional sanctions against Russia by banning the issuance of securities by five Russian banks (Sberbank, VTB, Gazprombank, Rosselkhozbank and development bank VEB) and also tightened restrictions on defence exports to Russia.
On 3 October 2014, US Vice President Joe Biden said that "It was America's leadership and the president of the United States insisting, oft times almost having to embarrass Europe to stand up and take economic hits to impose costs" and added that "And the results have been massive capital flight from Russia, a virtual freeze on foreign direct investment, a ruble at an all-time low against the dollar, and the Russian economy teetering on the brink of recession. We don't want Russia to collapse. We want Russia to succeed. But Putin has to make a choice. These asymmetrical advances on another country cannot be tolerated. The international system will collapse if they are."
On 18 December 2014 the European Union banned some investments on Crimea, halting support for Russian Federation Black Sea oil and gas exploration and stopping European companies from purchasing real estate or companies on Crimea, or offering tourism services. On 19 December 2014, US President Barack Obama imposed sanctions on Russian-occupied Crimea by executive order prohibiting exports of US goods and services to the region.
On 27 January 2015 the new government of Greece were preparing to veto further European sanctions on Russia, but agreed to extend the term of existing sanctions until further talks later in the year. Some member countries, including Italy, Cyprus, Bulgaria, Luxembourg and Austria, were split on further sanctions, but have nominated to go down the sanctions route. Notwithstanding, during the Foreign Affairs Council on 29 January 2015, a unanimous EU condemned "the indiscriminate shelling of residential areas, especially in Mariupol, and the escalation of fighting in the Donetsk and Luhansk regions." The foreign ministers of the EU added that "The Council expects Russia to exert its influence and to induce the separatists to fully live up to the commitments under the Minsk agreements. These include notably the cessation of hostilities and the withdrawal of heavy weapons from the security zone as urgent first steps." The EU agreed to extend existing restrictive measures and called for a proposal within a week on additional targeted sanctions, for a decision at the Foreign Affairs Council on 9 February. On this date the Council adopted "additional listings concerning separatists in Eastern Ukraine and their supporters in Russia". These consist of an asset freeze and a travel ban on 19 persons and 9 entities involved in action against Ukraine's territorial integrity. To "give space for current diplomatic efforts", the Council put the entry into force of the measures on hold until Monday 16 February 2015, in relation to the Minsk summit taking place on 11 February.
On Feb 16, the EU increased its sanction list to 151 individuals and 37 entities. Australia indicated they would follow the EU in a new round sanctions. If the EU sanctioned new Russian and Ukrainian entities then Australia would keep their sanctions in line with the EU.
On Feb 18, Canada increased its sanctions list by 37 Russian citizens and 17 Russian entities. Rosneft and Anatoly Antonov, deputy minister of defense are now sanctioned.
Criticism
'Harming European economy'
The third round of sanctions was faced with criticism by numerous EU politicians, businesspeople and officials who saw them as counterproductive and/or harmful to the European economy. The Hungarian Prime Minister Viktor Orbán stated that Europe "shot itself in foot" by introducing economic sanctions. In the words of the Bulgarian Prime Minister Boiko Borisov: "I don't know how Russia is affected by the sanctions, but Bulgaria is affected severely"; Czech President Milos Zeman also argued that the sanctions should be lifted.
According to Franco Frattini, Romano Prodi, and Thierry Mariani, the sanctions have no negative consequences for the U. S., but can be costly for the European Union; Frattini also expressed concern that Russia could make a turn to the East, severing economic ties with Europe in favor of China and Asian countries.
The German business sector, with around 30000 workplaces depending on trade with Russia, reported being hit by the sanctions, and pressured Angela Merkel to remove them. A number of business figures, like Heinrich Weiss, retracted their support for Merkel's party Christian Democratic Union in favor of Alternative for Germany, which opposes the introduction of sanctions. Some French company executives, including Jean Francois Cirelli, the late Christophe de Margerie, and his succeedor Patrick Pouyanne, criticized the tightening of economic pressure on Russia, maintaining that business relations should be placed above political issues. According to Federico Ghizzoni, the CEO of UniCredit, "the sanctions have caused Russia problems and... (they are) even bigger for Europe".
Sanctions 'don't solve the conflict' and create danger
Paolo Gentiloni, Italian Minister of Foreign Affairs, said that the sanctions "are not the solution to the conflict". The German Economy Minister Sigmar Gabriel said that the sanctions are harming Russia more than Germany; however, he suggested that the conflict should be resolved by dialogue rather than economic confrontation and "NATO sabre-rattling on the Russian border". In January 2015 he added that the reinforcement of anti-Russian sanctions will "provoke an even more dangerous situation... in Europe".
Risking an American-Russian nuclear war
Graham Allison, director of Harvard University's Belfer Center for Science and International Affairs and during the Clinton administration assistant secretary of defense coordinating the Pentagon's policy toward Russia, and Dimitri K. Simes, emigrated from Moscow to the U.S. in 1973 and now an authoritative Kremlinologist, president of the Center for the National Interest and publisher of The National Interest, in April 2015 in The National Interest warned that, although "economic warfare" is in general an "indispensable instrument" in foreign politics, the present and perhaps future economic sanctions and other attempts from the U.S. and European Union to isolate Russia internationally, if not checked and balanced by a solid strategic vision and ingenious diplomacy, risk to become a goal in itself, to strengthen the "hardliners" in Putin's entourage, and to bring Putin to a point where he'll feel a need to choose between giving in to Western demands at the cost of damaging his image of strong man, and escalate the Ukrainian conflict by more direct interference in Ukraine and perhaps even the use of direct violence against Western interests outside Ukraine.
They draw comparisons with:
- The crisis on the Balkan, starting 1908, of which at the time few could imagine that it would develop into the continental inferno we now know as World War I;
- The "economic war" the U.S. started in 1940-1941 against Japan, including a total embargo on oil deliverances, while underestimating the 'incredibly' high risks the Japanese generals were prepared to take for the survival of their government;
- The Cuban 1962 missile crisis, in which the American government realised in time that they'd better show some respect for a (Russian) leader capable to lay Chicago, New York and Washington in radioactive ashes.
Sanctions by Russia
Three days after the first sanctions against Russia, on 20 March 2014, the Russian Foreign Ministry published a list of reciprocal sanctions against certain American citizens, which consisted of ten names, including Speaker of the House of Representatives John Boehner, Senator John McCain, and two advisers to Barack Obama. The ministry said in the statement, "Treating our country in such way, as Washington could have already ascertained, is inappropriate and counterproductive", and reiterated that sanctions against Russia would have a boomerang effect. On 24 March, Russia banned thirteen Canadian officials, including members of the Parliament of Canada, from entering the country.
On 6 August 2014, Putin signed a decree "On the use of specific economic measures", which mandated an effective embargo for a one-year period on imports of most of the agricultural products whose country of origin had either "adopted the decision on introduction of economic sanctions in respect of Russian legal and (or) physical entities, or joined same". The next day, the Russian government ordinance was adopted and published with immediate effect, which specified the banned items as well as the countries of provenance: the United States, the EU, Norway, Canada and Australia, including a ban on fruit, vegetables, meat, fish, milk and dairy imports. Prior to the embargo, food exports from the EU to Russia were worth around EUR11.8 billion, or 10% of the total EU exports to Russia. Food exports from the United States to Russia were worth around EUR972 million. Food exports from Canada were worth around EUR385 million.
Russia had previously taken a position that it would not engage in "tit-for-tat" sanctions, but, announcing the embargo, Russian Prime Minister Dmitry Medvedev said, "There is nothing good in sanctions and it was not an easy decision to take, but we had to do it." He indicated that sanctions relating to the transport manufacturing sector were also being considered. United States Treasury spokesperson David Cohen said that sanctions affecting access to food were "not something that the US and its allies would ever do".
On the same day, Russia announced a ban on the use of its airspace by Ukrainian aircraft.
In January 2015, it became clear that Russian authorities would not allow a Member of the European Parliament, Lithuanian MEP Gabrielius Landsbergis, make a visit to Moscow due to political reasons.
In March 2015, Latvian MEP Sandra Kalniete and Speaker of the Polish Senate Bogdan Borusewicz were both denied entry into Russia under the existing sanctions regime, and were thus unable to attend the funeral of murdered opposition politician Boris Nemtsov.
ArrayList of sanctioned individuals
Sanctioned individual include notable and high-level central government personnel on all sides. In addition, companies suggested for possible involvement in the controversial issues have also been sanctioned.
ArraySee also
- Cold War II
- List of companies that applied sanctions during the Crimean crisis
- Russian financial crisis (2014-present)
- Do not buy Russian goods!
- Boycott Russian Films
- Remember about the Gas -- Do not buy Russian goods!
- Magnitsky Act
References
ArrayExternal links
- Ukrainian crisis: sanctions and reactions, Information Telegraph Agency of Russia (owned by the Government of Russia)
- Ukraine and Russia Sanctions, United States Department of State
- EU sanctions against Russia over Ukraine crisis, European Union
- Overview of the European Council policy on sanctions, European Council (European Union)
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