Lessons in Sanctions-Proofing from Russia

Government actors and other observers across Europe and the United States called the multilateral sanctions imposed on Russia in early 2022 "unprecedented."Even Russian President Vladimir Putin acknowledged their severity when he stressed "the need to counter economic restrictions that were imposed on us, which are truly unprecedented without any exaggeration." Part of the response to the Russian invasion of Ukraine, these financial and trade sanctions—imposed on Russia by Western governments—target key firms in the financial and energy sectors, debt financing, technology, Russia's foreign currency reserves, and more recently, most Russian oil and transportation insurers.

Debates quickly emerged surrounding the success, or lack thereof, of the sanctions in curtailing Russian government aggression against Ukraine. The threat of severe sanctions issued in December 2021 did not deter Russia from invading Ukraine. The imposition of sanctions following the invasion two months later sought to curb the Russian government's ability to continue its "harmful foreign activities." Some noted the shift from an environment of deterrence to one of attrition, and the current approach may be categorized as one of "coercion by denial": specifically, Western denial of the resources the Russian government needs to continue fighting.

The United States and its Western allies have long wielded financial and economic sanctions as instruments of coercion, with tangible costs imposed on the targeted actors. Governments on the receiving end of this tool of statecraft often take steps to minimize their exposure to sanctions' pressure....