Sanctions breakers in spotlight as murky deals help Russia keep trade going
Tankers, weapons, ships and engines are all expected to be on a list of sanctioned goods arriving on Russian shores from places as far afield as Ghana, Liberia and Uzbekistan, from countries like Italy and Germany. And even more oil is coming the other way.
McFaul, currently a professor at Stanford University, said: “The fact that Russia is evading the sanctions, I think, underscores the fact that they are working and trying to get around them.”
Maria Shagina, an analyst at the International Institute for Strategic Studies, describes the current network of sanctions as a “very different animal” from the restrictions introduced in 2014 following Russia’s annexation of Crimea.
She says: “The sanctions in 2014 were so fitting that they were easy to dodge. It’s a very different animal. Many loopholes that existed have disappeared.”
But there are also reasons for concern. For example, experts have spent years trying to untangle what Shagina describes as the “dark” world of defense.
“It’s still early days, but from what I’ve seen in Ukraine, all of the weapons that have been captured so far in Russia still have critical components that are made in the West.”
She says it is easier to nominate the facilitators from Russia. “Many don’t exactly treasure ties to the global economy, like China, India, Turkey and Saudi Arabia.”
The biggest challenge is to get more countries involved in isolating Russia. History tells us that it is difficult to isolate an entire economy when there is no unity.
As Nicholas Mulder of Cornell University has pointed out, when the League of Nations attempted to exclude Italy from the world trading system after Benito Mussolini’s invasion of Ethiopia in the 1930s, states USA and Germany provided the country with a vital lifeline because they were outside the club of 60 countries.
“Italy continued to import coal and oil and managed to weather eight months of severe hardship,” he said.
But fear of the unknown has also led to excessive compliance with sanctions. In 2014, many Chinese companies refused to do business with Russia for fear of breaking regulations.
Shame is also a factor, Shagina says. In short, no one wants to be perceived as doing business with Russia – even if they do.
“The fact is that the EU hasn’t imposed any sanctions on Russian oil yet. But customers don’t want to take ‘Russian’ oil, so even these ships are going dark and changing flags. Reputational damage are so important that they have no choice.”
Going forward, McFaul says diplomacy is one of the best tactics against Russia.
He argues that the West must do more to build ties with countries that still do business with Putin’s regime: “It has to be public diplomacy, private diplomacy so that countries at least feel bad about comfortable staying away”.
But there can only be a limited number of carrots, he adds. McFaul says that at some point there needs to be a discussion about secondary sanctions so that countries have an incentive to crack down on those who break the rules.
“It’s a pretty tough and difficult stage. But I was in the [Barack] the Obama administration for five years. And that’s finally what we did vis-à-vis Iran. It was not enough to have our own sanctions. I think that eventually at least threatening secondary sanctions against those who help Russia – knowingly or unknowingly – will have to be the next step.”