February 28, 2024

Putin Needs to Feel the Pain

By: Edward Fishman and Kevin Brunelli

In the wake of Alexei Navalny’s suspicious death in an Artic prison and to mark the second anniversary of Russia’s full-scale invasion of Ukraine, the Biden administration on Friday unveiled a new round of sanctions on Russia that included more than 500 targets. The Treasury Department declared the penalties amounted to “the largest number of sanctions imposed since Russia’s full-scale invasion of Ukraine.” Among the targets were Russia’s domestic payment card network, the state-owned shipping firm Sovcomflot and more than two dozen firms based in countries outside of Russia — including in China, Serbia, and the UAE — that have helped Russia source parts for its military-industrial complex.

Impressive as the penalties seem, when it comes to sanctions, quantity does not equal quality. Despite some valuable steps in the right direction — steps that could do serious damage to Russia’s military supply chain — the sanctions need to go much farther to check Putin’s full-on war economy.

The West is also discovering that successful economic warfare requires painful prioritization.

The sanctions reveal that the White House is committed to enforcing existing sanctions but still reluctant to embrace the risks required to meaningfully tighten the screws on the Kremlin, such as penalties that would sequester Russia’s oil revenues or secondary sanctions that would fully isolate Russia from the global financial system. This is a problem, because as Russia makes gains on the battlefield — and desperately needed military aid for Ukraine remains stuck in Congress — Putin needs to understand that the costs to his economy will rise as long as his brutal war continues.

Lest there be any doubt, the United States and its allies have not yet maxed out sanctions on Russia. From the beginning of the war in Ukraine, the West has tried to walk a fine line: to hit Russia with “the most severe sanctions that have ever been imposed” ( as President Biden called them) while largely sparing Russia’s most valuable export, oil. Even the vaunted sanctions on the Central Bank of Russia and the country’s two largest banks, the most ambitious penalties imposed by the United States and its allies to date, included a loophole for all transactions “related to energy.” That loophole remains in place today.

Read the full article from POLITICO.

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