The European Union (EU) has already launched 14 “packages” of sanctions against Russia since its invasion of Ukraine in 2022, but these measures intended to weaken the Kremlin’s war machine come up against the “ingenuity” of the Russians to get around them.
Russian growth is certainly declining, but still above 4%, proof, according to the Kremlin, that Western sanctions are not working. The Russian government also announced on Monday a Defense budget increasing by 30% for next year.
“Sanctions are only effective when the coalition behind them is large enough,” explains Guntram Wolff, researcher at the Bruegel Institute and professor of economics at the Free University of Brussels.
However, we are far from the mark. With China, India or other so-called “global South” countries out of the equation, it becomes “very difficult” to take effective sanctions, he stressed in an interview with the Agency France-Presse.
Western countries have decided to ban their exports to Russia of technological products that could be used to manufacture weapons, such as microprocessors.
But, very quickly, these sanctions were circumvented by Russia thanks to the complicity of third countries, such as China, Turkey, the United Arab Emirates and several Central Asian countries such as Kazakhstan.
“The ingenuity” deployed by the Russians to obtain supplies is “considerable”, recently recognized David O’Sullivan, the EU’s special envoy for sanctions.
European exports to Turkey, for example, increased by 38% between the third quarter of 2021 and the third quarter of 2023, according to a recent study by the Jacques Delors Institute on the effectiveness of EU sanctions. And above all, Turkish exports to Russia jumped by 72% during the same period.
“Punish” the guilty
The EU has so far refused to “punish” the guilty countries, preferring to act through diplomatic channels.
“I must say that I always prefer that the third countries with which we deal find their own solution,” explained Mr. O’Sullivan.
To the great dismay of Ukraine.
“I am afraid that sometimes diplomacy is not enough, tougher measures must also be taken,” Vladyslav Vlasiuk, advisor to the Ukrainian president on sanctions, judged last week in Brussels.
He took the opportunity to present to European officials and the general public some examples of “made in Europe” technologies found in the debris of Russian shells or rockets on the battlefield.
The Europeans sought the solution, by imposing a certain number of constraints on European companies manufacturing sensitive products or those likely to be useful to the Russian arms industry. For example, a clause prohibiting any re-export to Russia of the company’s “know-how” was imposed.
But implementing these measures is far from simple.
“At some point you lose control over the product you are selling. This is the very nature of the business model, and we have to accept it,” admitted Mr. Sullivan.
The Europeans want to extend to subsidiaries the clause prohibiting any re-export to Russia, but “let’s be honest, there is resistance” from companies, he admitted.
“European companies are committed to implementing sanctions and fighting against their circumvention. But for this, they need clear and appropriate direction,” notes BusinessEurope, the business lobby in Brussels, interviewed by AFP.
This involves the clear threat of financial sanctions if companies do not play the game, believes Guntram Wolff, also co-author of a report from the Bruegel Institute on ways to improve the effectiveness of sanctions against Russia.
He also suggests taking inspiration from “the very strict legislation imposed on the financial system to fight against money laundering or terrorism”.
International finance has been forced to put in place effective monitoring and control procedures, which have, “to a certain extent, reduced” this crime, he assured.
The sanctions are certainly not 100% effective, but they have the merit of making “more difficult, longer and more expensive” any acquisition by Russia of products necessary for its arms industry, summarized David O’Sullivan.