WASHINGTON – When the Obama administration imposed sanctions on Russia for its invasion of Ukraine in 2014, American officials hoped that they would deter President Vladimir V. Putin from further aggression.
Today, some officials argue that sanctions have prevented Putin from ordering Russian forces beyond where they have been stationed on the Crimean Peninsula and into the eastern Donbas region. But Mr. Putin was adamant about Crimea. And on Monday, he sent more troops into a rebel-held area in eastern Ukraine where thousands of Russian troops are operating and said the Kremlin was recognizing the two lands as independent states. create.
Now, President Biden, who helped oversee Ukraine policy in 2014, must what sanctions to consider? could force Putin to halt his new offensive, which the White House Have evaluated is an “invasion.” The White House is taking a step-by-step approach, trying to phase out measures to Putin’s actions.
“I will begin imposing sanctions in response, far beyond the steps we and our allies and partners took in 2014,” Biden said Tuesday in a statement. newspaper a series of new sanctions. “And if Russia goes further with this invasion, we are prepared to go further.”
While American officials have studied the impact of sanctions imposed since 2014 and honed the technique, Mr. Putin has had years to make the country’s $1.5 trillion economy better. countries become more prominent so that regions of Russia are protected from tough penalties. Speaking to reporters on Friday, he boasted that his country had grown more resilient in the face of “illegal” Western sanctions, based on Russia’s Tass news service. He added that going forward, it will be important for us to raise the level of our economic sovereignty. ”
And perhaps most notably, Mr. Putin and his closest aides and partners in Moscow may not be much affected by the sanctions, analysts say.
Mr Putin’s decision on Monday to push for the troop move suggests that he has concluded that the cost of the new sanctions is acceptable, despite US talk of “huge consequences”. ” for his country. Some of his top aides made that point in speeches compiled before him during a meeting of his Security Council on Monday in Moscow.
If Russian officials stick with that mindset, the Biden administration could find it forced to impose the absolute harshest sanctions — measures that could be painful for many ordinary citizens — or find seek a non-economic option, such as greater military aid to an insurgency in Ukraine. Mr. Biden said he will not send US troops to defend Ukraine.
Some of the hardline nationalist men around Mr Putin have been placed on the Treasury Department’s sanctions list and accept that they and their families will no longer have significant ties to the US or Europe throughout. the rest of his life, said. Alexander GabuevChair of Russia in the Asia-Pacific Program at the Carnegie Moscow Center.
“They are powerful heroes in Russia today,” he said. “There is so much diversity. They are completely separate. They are kings, and that can only be guaranteed in Russia. “
Furthermore, because of their role in state-owned enterprises and their business relationships, they are “the direct beneficiaries of the economy becoming more isolated, more isolated from the outside world.” out,” he added.
They have also adopted a siege mentality rooted in ideological beliefs about the United States and its sanctions policies that Putin frequently promotes. “He said, “Not because of the actions I took, but because we are rising as a great power and the Americans want to punish us for standing up to hegemony,” said Mr. Gabuev. speak. “I think that’s true. The majority of my contacts in the government believe that. “
Sanctions announced by the United States on Tuesday include penalties for the three sons of senior officials close to Putin and two state-owned banks, as well as further restrictions on the ability to increase business Russian revenue by issuing sovereign debt. The costs are not expected to be widely felt in Russia – the two banks are policy institutions and have no retail operations – but US officials may eventually announce tougher steps .
That announcement follows an executive order issued by Mr. Biden on Monday night, banning business dealings between Americans and Russian-backed eastern enclave entities in Ukraine. The Biden administration would also have the power to impose sanctions on anyone operating in those sectors, a US official said.
On Tuesday, Britain announced it would freeze the assets of five Russian banks and impose sanctions on three Russian billionaires and several members of Parliament. And Germany said it was Certification pause of the Nord Stream 2 natural gas pipeline that will connect with Russia.
Officials from the White House, State Department and Treasury Department have spent weeks coordinating the response with European leaders and major financial institutions and said they could act almost immediately. when Russia escalated its action.
Some experts say that if the Biden administration implements the harshest options officials have suggested are possible — most notably cutting off the country’s top banks, including Sberbank and VTB , from dealings with non-Russian entities – Russia could suffer a financial crisis. caused a stock market crash and rapid inflation. These effects will most likely hit not only billionaire tycoons but also middle-class and lower-income families. Russian businesses will also not be able to receive payments for energy exports.
Besides isolating Russia’s state-owned banks, the escalating sanctions that US officials are preparing will also cut off their ability to buy key technologies from American companies.
Maria Snegovaya, a visiting scholar at George Washington University, who co-wrote: Atlantic Council article about US sanctions against Russia.
Edward Fishman, a top State Department sanctions official in the Obama administration, called Biden’s actions Tuesday a modest first step intended to be “a crossbow shot.”
Understanding how the Ukraine crisis developed
Mr. Fishman said the administration’s move against one of the two target banks – VEB, the country’s main development bank – was the first time the United States had completely cut off a Russian state financial institution. “I take it as a warning that the Biden administration is prepared to cut off other major Russian banks from the US financial system,” Mr. Fishman said.
He added: “Biden is giving Putin a chance to step off the edge. “But he also signaled that, if Putin waged an all-out war, the economic costs would be enormous.”
A severe economic disruption could test Mr. Putin’s ability to control the country. But many analysts are skeptical that the United States and its European allies will follow through with the toughest choices they have considered, as they may be discouraged by concerns about collateral damage to their own economy.
And no Western official has proposed strangling the lifeblood of the Russian economy by cutting back on the country’s lucrative energy exports. The move against Russia’s energy revenues will have the biggest impact, experts say, but it will also lead to a precarious political situation for Biden and other world leaders as oil prices and Gas increases during times of high global inflation.
The Russian government has spent years trying to readjust its budget and finances to be able to withstand further sanctions, efforts supported by high market oil and gas prices. It has relatively low debt and is less reliant on loans from foreign institutions than it was before 2014. Most importantly, the central bank has accumulated foreign currency reserves $631 billion, the fourth largest reserve in the world.
Some important Russian state-owned enterprises and private companies have actually benefited from US sanctions. The Kremlin’s policies to replace Western imports with Russian and non-Western products have helped boost those businesses’ profits. And some of Putin’s allies and their families have done well on these initiatives. Mr. Gabuev said an example is Dmitry Patrushev, the Minister of Agriculture, whose family became richer thanks to the new policies of the agricultural sector.
President Xi Jinping of China, who strengthen his country’s relationship with Russia, could help Putin get around some sanctions or boost Russia’s economy with larger energy purchases. When the two leaders met in Beijing at the start of the Winter Olympics, their governments announced a 30-year contract under which China would buy gas through a new pipeline running through Siberia. Chinese companies may also be able to fill some of the supply chain gaps caused by the suspension of some US technology exports to Russia, even though those companies cannot replicate more advanced American products. .
China’s leaders will likely be careful about letting their major state-owned banks continue to do business openly with any Russian banks under US sanctions, but China has a way to hide some. transaction.
“They have developed a lot of electronic and digital payment solutions,” said Daniel Russel, former assistant secretary of state for East Asia and Pacific affairs and executive director at the Asia Association. “There are all sorts of pretty complicated barter systems that they’ve been using. Third, they can hide behind a lot of black market stuff.”