Russia sanctions 'need to be deepened not broadened’, says Graduate Institute expert

VTB is one of Russia's major banks that has been subject to sanctions. (Photo: Emaus, CC BY-SA 4.0 via Wikimedia Commons)

Western countries including the US, Britain and the European Union, as well as Australia and Japan have unleashed a raft of sanctions against Russia following its invasion of Ukraine. 

They include freezing assets of major Russian banks, sanctions on wealthy individuals, travel bans and measures curbing Russia’s access to key technologies and other key exports.

Thomas Biersteker, honorary professor in international relations at the Graduate Institute in Geneva and an expert in sanctions, argues measures need to be deepened – not broadened – to be effective.

How effective are the raft of sanctions that have been proposed so far against Russia?

The sanctions alone aren’t going to reverse the military invasion; they can’t force Putin into changing his mind. However, they are important because they send a strong signal about the unacceptability of the violation of the norm against unprovoked military aggression. And just looking back at the preamble and the first article of the UN Charter, there's no question of the scope of this violation.

The sanctions should also be viewed as an effort to degrade the capacity of Russia to continue to use force to impose its will on others. And thirdly, they've already had some immediate economic effects in terms of the decline in the value of the ruble and of the Russian stock market.  But I think the real impact will not be something we see in the short term.

What do you see then as the long-term implications?

Long term, this will further push Russia away from Europe and into closer interaction with China. Even after the sanctions over Crimea in 2014, we saw Russia engage in a significant move and opening toward China, even though it was not an advantageous move for Russia in economic terms.

What do you see as the most important or effective sanctions that have been announced?

The most important to date, beyond the significance of the financial designation of major banks, will be the restrictions on technological exports [announced by the US on Thursday].  I think these could have a significant impact and they are partly based on the US’ experience of the restrictions it placed on Huawei back in 2020.  That I think could have a major impact on the economy in the long term, on the military, and of course on everyday Russians as well.

The US and Europe have held off cutting Russia out of the Swift global payments system, finally moving on Saturday to cut off certain Russian banks.  Ukraine has reproached the West for not taking a tougher stance. What’s your view on this?

I think there has been a lot of hype about Swift. It is important, but the effects will be fairly broad and non-discriminating. As we learnt from sanctions on Iran, the people who really felt the impact of the Swift interruption were people with Iranian families, students studying abroad, small exporters, medium scale businesses. And in fact, the elite got away. SWIFT is a messaging system and cutting Russia from SWIFT does not stop it from making payments and transactions. They can still be conducted with telex and email messages. It’s just more costly and less efficient.

So, my general argument is that if you want to strengthen sanctions, don’t broaden them but deepen them. And by that I mean don't make the scope broader so that everyone in Russia pays the price. But really, go after the assets of the individuals who are supporting this publically, and who can use the services of people not only in the City of London but also in Switzerland to make sure that these measures don't affect the elite’s core assets.

Switzerland is so far resisting imposing tougher sanctions against Russia. Is this really feasible, especially given the pressure from other countries, and within Switzerland too?

So far it appears that Switzerland is trying to redo what it did in 2014, which was to stay out the direct application or imposition of sanctions on Russia and Russian individuals and assets, but agreeing to ensure that Switzerland will not become a location for evasion, or a vehicle for evasion activities. We don’t really know how effective this was and it’s something that’s diffcult to research because the financial institutions, particularly those that might have some of the assets of these individuals, are not going to be very transparent about how they're managed. But that is it’s first move.

It is possible, and I’m speculating here, that Switzerland trying to reserve itself as a potential venue for facilitating an eventual ceasefire or eventual negotiations – something at some point. This is obviously very premature at this moment but you obviously need to think about where would you sit down with Russians after this to have a conversation about what to do next? And so, to some extent, it might be a case of keeping Switzerland in reserve, but let's make sure – and I’m looking at it from the standpoint of Brussels –  Switzerland is not used as a vehicle for invasion. But I'm a little nervous about how much could have already slipped through, particularly when you're going after new designations of people.

You talked about deepening sanctions – what would be the next step?

I think the real emphasis now needs to be how to apply secondary sanctions  in a multilaterally coordinated way so that there aren't escape routes like Switzerland, like Cyprus, like many states in the US. UK Prime Minister Boris Johnson has been vocal about this and I'm waiting to see what exactly concretely the UK is going to be able to do in terms of following the money and going after assets and trying to dismantle the whole architecture.

So, I'd say go after those people who are providing these services. Because a lot of people make a lot of money around it and that's part of the problem.

There should be more investigation and a serious effort to use financial intelligence units to go after the dirty money and see if it's possible to constrain these actors’ portfolios. So those are much more sort of expansive controls. Obviously, this isn't going to be done at the global level because Russia will prevent this from getting onto the agenda of the Security Council. This is why we have this multilateral informal coordination, which is quite unusual and a contrast to 2014 both in the scope and the amount of coordination we’re seeing.

How extensive are the sanctions against Russia compared with actions taken against other countries?

They are not that extensive, actually, and I would say, in sympathy with the Ukrainians, I can see their frustration, on holding off on Swift or doing something stronger at the outset. But they are the most extensive set of sanctions applied on Russia since the end of the Cold War.

The most draconian sanctions would a full blown embargo. All trade, all finance, all transactions, all travel, and communications. And, interestingly, the UN has applied those kinds of measures. They imposed them against Iraq, Haiti, and Serbia. But the idea of comprehensive sanctions on Russia would be disastrous for Europe. So there are reasons why this isn't on the table. Russia is just too large and too interdependent with Europe in particular. And potentially, of course, as soon as you do that, oil and gas prices go through the ceiling.  That's also why [sanctions on oil and gas assets] have been kept off the table. And that's why I think Germany is concerned that Swift would interfere with all the payments already set up for paying for Russian oil and gas. So there's some national interests involved in this as well.

You’ve mentioned that sanctions should be combined with other diplomatic instruments. To what extent do you think that conversations in Geneva at the Human Rights Council next week will be effective in that regard?

There are several things I think Ukraine can do. One is just taking it up to the agenda on the Human Rights Council trying to get a resolution passed, because there's no veto unlike the Security Council. I also think we'll see some action at the General Assembly, where the issue was taken after 2014. So, you need to look at the sanctions, the diplomatic protestations and condemnations, the sports boycotts, and the coverage of the conflict in human terms on the ground. Information is key to understanding the political dynamic of this conflict, and I think the releasing of so much intelligence information in advance of the invasion has also been extraordinarily interesting in this case (to prevent Russia from inventing a pretext for invasion). And then,  a great deal will all depend on how this plays out on the ground and on the level of Ukrainian resistance. The longer this lasts, the more consequential it will be in both political and humanitarian terms.

Thomas Biersteker is the Gasteyger Professor Honoraire at the Graduate Institute, Geneva and a global fellow at the Woodrow Wilson International Center for Scholars in Washington, DC. His research focuses primarily on international relations, global governance, and international sanctions, and he has trained sanction coordinators of four out of the five UN Security Council Members.