Strengthen or Soften?*

*Editor’s note: On March 4, Russia enacted a law that criminalizes public opposition to, or independent news reporting about, the war in Ukraine. The law makes it a crime to call the war a “war” rather than a “special military operation” on social media or in a news article or broadcast. The law is understood to penalize any language that “discredits” Russia’s use of its military in Ukraine, calls for sanctions or protests Russia’s invasion of Ukraine. It punishes anyone found to spread “false information” about the invasion with up to 15 years in prison.

Alexander Gabuev on America’s sanctions dilemmas.

Russian politicians like to say that the West, led by America, is waging an all-out sanctions war against Russia. However, suppose you talk to the Western officials who devise and implement the sanctions. In that case, you will notice some red lines that these people are careful not to cross. These lines are drawn keeping in mind the general concerns about the state of the global economy and, more importantly, the economy of “sanctions coalition” countries, as well as domestic politics.

However, this year, the main rule of any sanctions — that they must harm only the entities they are imposed on, not the party that imposes them — has been broken.

The flood of horrific images from Ukraine has shocked the Western public and lawmakers. So much so that after a couple of months of hostilities, the sanctions have become much harsher than their instigators had imagined before Feb. 24.

But even under these conditions, the U.S. wants to maintain a monopoly on adopting sanctions, because they can be a flexible tool if they are imposed by the U.S. president and the Department of the Treasury. That is, sanctions can be imposed for an opponent’s “bad behavior” and revoked for “good behavior.” However, if lawmakers take the imposition of sanctions into their own hands, it will become much more difficult to lift them. An example of this is the infamous Jackson-Vanik amendment to the Trade Act of 1974, which denied normal trading relations between the U.S. and countries that restricted free emigration. The amendment was adopted in 1974 and was irrelevant by 1987. Nevertheless, the amendment’s application to Russia was not repealed until 2012. Now, given that precedent, U.S. officials must always walk a fine line. They must seem tough so as not to tempt Congress to start pushing out sanctions of its own accord, but at the same time be pragmatic so as not to harm their country’s economy.

And if harm to the economy cannot be avoided, they must at least minimize the damage. That is why, as part of the grain export deal struck in Istanbul in July, officials from the U.S. Department of State and Department of the Treasury briefed shipping market stakeholders and traders of grain and fertilizer, explaining how they should deal with cargo from Russia.

And that is also why officials in charge of imposing sanctions are trying to be cautious with sectors of the economy where Russia is a major international player, such as nuclear power and the metals industry.

Even the oil price cap — designed to reduce Moscow’s income from energy exports — still ensures that Russian oil remains accessible to the world market.

However, there are two main problems with this approach. First, it does not consider unexpected countersanctions. For example, the West does not know how to act if Russia suddenly decides to cut off oil exports to countries that set a price cap on its energy resources. Second, the most damaging sanctions have already been imposed. Therefore, in the event of a radical escalation of tensions, Western officials will hardly be able to stick to economic measures alone. No matter how much they might want to.