Why sanctions against Putin and his allies don’t work



An “act of air piracy” was how Ryanair boss Michael O’Leary described the forced grounding of one of his planes in Minsk by Belarusian authorities in order to arrest a dissident who was in edge. “A shocking attack on civil aviation and an attack on international law,” said British Foreign Secretary Dominic Raab. Taoiseach Micheál Martin, on his way to Brussels for an emergency meeting, called on EU heads of state to give a “very firm and strong response” to Belarusian President Alexander Lukashenko. But what response can the West really provide to put an end to the anarchic behavior of Lukashenko – and, more importantly, of his intermittent ally Vladimir Putin? Where to strike where it really hurts?

The EU’s first reaction was to start suspending the license of Belarusian national airline, Belavia, and to call for a ban on all flights from Europe to Minsk. By way of opening, it seems at first glance reasonably proportional. Except that it is not Lukashenko or his security chiefs who will suffer. Nearly 60 senior Belarusian officials – including Lukashenko himself – have already been personally sanctioned after the brutal crackdown on dissent last summer and are already banned from traveling or owning assets in Europe. The Belarusian citizens who will be most affected by the new flight ban are likely to be the most international and the best educated. Both Lukashenko and Putin are currently banning hundreds of thousands of their own citizens (mostly security service personnel) from traveling to the West, so the EU ban would only complement the job by isolating ordinary citizens from the corrupting influence of overseas travel.

‘If you really want to punish Luka[shenko], give each young [Belarusian] a plane ticket and a Schengen visa, ”wrote an anonymous user of the Telegram messaging service, where arrested activist Roman Protasevich worked on two influential news channels. “Don’t lock us in this madhouse!”

Punishments? The West has been trying this since 2012, starting with freezing individual assets and travel bans for those responsible for the 2007 murder of Moscow whistleblower lawyer Sergei Magnitsky. Since then, Putin’s forces have invaded Crimea; shot down a civilian airliner; hacked into the US Democratic National Committee and voting machines; and used banned chemical weapons in the attempted assassination of defector Sergei Skripal in Salisbury. Not to mention hacker attacks on key parts of the Western power grid and pipeline infrastructure.

For each new contempt, there was a series of sanctions. The assets of hundreds of Russian officials have been frozen, Russian state-owned companies have been banned from raising international funds, and Western companies have been threatened with sanctions if they participate in major Kremlin-backed infrastructure projects such as the gas pipeline. Nord Stream 2.. None changed Putin’s behavior with a single word. And such measures are also unlikely to work on Lukashenko (who, for the record, was convicted of the “irresponsible” hijacking by the Russian Kremlin-controlled media). On the contrary, the sanctions allowed Putin to blame Russia’s problems on hostile foreigners and pose as the defender of the homeland against foreign aggression.

When the Russian ruble fell more than 50% following the invasion of Crimea in 2014 (mainly due to falling oil prices rather than sanctions), Putin responded by banning the import of all the food of the EU, reviving national production and isolating its people from the collapse of purchasing power in hard currency of their money.

As the EU and UK cut foreign assets held by senior Kremlin officials, Putin announced an amnesty for all money held abroad by the Russian elite. This “removal of offshoring” helps Putin by keeping the cash flow of his buddies close – and vulnerable. Moreover, being under US sanctions has become a sort of badge of honor among the Russian elite. “What, can you still travel?” joshed a russian parliamentarian to a colleague at a dacha party outside moscow that i attended last november. “What kind of patriot are you, man?”

Dominic Raab, while still a backbench MP, was one of the UK’s foremost supporters of the Unexplained Wealth Ordinances, a legally sweeping measure that effectively reverses the burden of proof of the common law and requires individuals to prove that their assets were acquired legally. The idea was to overthrow London’s status as the depository of choice for the billions stolen by kleptocrats around the world. But although hundreds of UWOs have been issued against Russians since 2018, so far no prominent figure linked to the Kremlin has seen significant assets seized. “They have good accountants, it’s the long and the short,” said a former White House official who worked with Barack Obama on personal sanctions in 2012. “They are not just one step ahead on the Treasury … They’re like, 50. ‘

And if a large number of children in the inner circle of the Kremlin – including, for a time, the daughters of Putin and his press secretary Dmitry Peskov – live in the West, the idea of ​​imposing collective punishment on members of family is ethically disturbing. So even though a growing list of appointees are banned from traveling to the West, their spouses, children, family members and their money continue to flow freely. Personal sanctions don’t work any better than economic sanctions.

More importantly, the West has allowed fatal confusion to creep into their message of sanctions. Some sanctions relate to clearly criminal behavior – such as the fall of Malaysian Airlines flight MH17 by a Russian Buk missile in 2014 or the poisoning of Skripal. Others have been for incidents that have yet to be conclusively proven to be the direct work of the Kremlin – like the 2020 US election meddling and the recent attack by a mysterious hacker group called DarkSide. which shut down the American colonial pipeline system. And a few rounds of sanctions have been for actions that could reasonably be viewed as internal issues – like Lukashenko’s brutal crackdown on pro-democracy activists. This sliding causal scale allowed Russian and Belarusian propagandists to overturn all sanctions as unwarranted interference in their country’s politics.

“Neither China nor Russia could have been clearer in their refusal to allow Western interference in what they consider to be their internal affairs”, argues Sir Anthony Brenton, British ambassador to Moscow during the first term of Putin. “Sanctions have become a kind of modern bear bait; they simply reinforce the bear’s anger and defiance, while providing the satisfaction and public acclaim of inflicting pain.

So what will work? Russia, although economically smaller than South Korea, is still linked to international financial and banking systems. If he wanted to, President Joe Biden could halt trading in Russian Treasuries and publicly traded assets of Russian state-owned companies like Rosneft Oil. This would cause immediate and catastrophic economic suffering, forcing Putin to seek debt financing from China with all the strategic dependence that would entail. The international bank clearing system SWIFT is based in Belgium. Cutting off Russian commercial banks would immediately lead to a collapse of interbank trade. Millions of Russian Visa cards (head office: Foster City, CA) and Mastercards (Purchase, New York) could be immediately rendered useless. Even Russia’s Internet domain – .ru – is controlled by the Internet Corporation for Assigned Names and Numbers, or ICANN, an American nonprofit based in California. Finally, the European Union is by far the biggest consumer of Russian natural gas, which supplies around 25% of Putin’s budget.

But would the collapse of the Russian banking system, sever all its links with international finance and sources of income and isolate it from the global web punish Putin? Or would it instead lead him to a desperate corner and unite ordinary people behind their leader?

There is also another problem: who actually ordered the poisonings, hacks and grounding of the Ryanair flight? It’s easy to use “Putin” or “Lukashenko” as a shortcut. But in reality, these blatant actions are the result of shenanigans by the security services (in the case of Belarus, still nostalgically called the KGB). The sanctions are supposedly aimed at changing the policy of the rulers. But what if the leaders do not fully control the security services that act on their behalf?

Biden and Europe have chosen to keep both the carrot and the stick in play. In 2019, following the Skripal attack, the Trump administration signaled that Russian Treasuries could be targeted by introducing restrictions on Americans trading there – a signal that Biden, in his latest round of hacking-related sanctions, has reiterated while refraining from turning the screw. Angela Merkel has consistently refused to comply with US demands to shut down the Russia-funded Nord Stream 2 pipeline under the Baltic Sea, which is expected to start pumping gas directly to Germany later this year. But attitudes are changing even among the traditionally “ Putin-sympathetic ” German elite – especially after Kremlin critic Alexei Navalny spent a month recovering from poisoning in Novichok at a Berlin hospital and received the visit from Merkel.

Putin and Lukashenko, meanwhile, managed to draw a fine line – sometimes behaving like the rulers of rogue states, while retaining just enough international credibility to maintain, say, a future summit with Biden on the cards. Both bank on the fact that the West has too much to lose from open confrontation. The West, for its part, continues to hope that growing economic expectations will fuel the pressure for freedom and change among young people in Russia and Belarus – and is reluctant to extinguish those hopes by crushing their economies and triggering a crisis. nasty nationalist reaction. It’s a delicate balance, and each act of poisoning, hacking, and international hacking dangerously brings this latest season of detente closer to collapse into a full-fledged new Cold War.



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