(Reuters) - - The most recent escalation in economic sanctions against Russia sends an important signal that the United States and its European allies are willing to act, even at some risk to their own economies, to punish Moscow for fostering instability in Ukraine and supporting rebels that the U.S. government says downed a commercial jetliner.
Beyond this objective, however, it is also important to recognize how the design of the measures being imposed represents an innovative “micro-targeting” approach that has the potential to transform the role sanctions can play in foreign policy and geopolitics in the years ahead.
The United States and Europe this week expanded financial restrictions – creating extremely narrow prohibitions on technology exports and on the use of U.S. and EU financial markets - aimed at increasing the strain on Russia’s banks, oil industry and military. They build on two prior rounds of sanctions that targeted Russian cronies and some banking, arms and energy entities.
The banking restrictions are the most significant actions taken this week. They will prevent a broad swath of Russian banks from raising money in Europe and similarly refuse several significant banks in Russia access to U.S. capital markets. With the doors closing to the world’s most attractive markets, Russian banks will have to scramble domestically - or look East - to find new financing.
More from CNAS
PodcastSamuel Bendett on AI Development in Russia
What is happening in Russia right now with regards to development of artificial intelligence? In today’s bingecast, Samuel Bendett and Robert J. Marks discuss Russian military...
By Samuel Bendett
VideoBank of Russia Hiked Rates
Elina Ribakova discusses how the spike in Covid-19 cases and new restrictions could affect the Russian economy with Bloomberg's Alix Steel and Guy Johnson. Watch the full vid...
By Elina Ribakova
PodcastPolitical Opposition in Russia and U.S.–Russian Relations, with Leonid Volkov, Chief of Staff for Alexey Navalny
What is the future of political opposition in Russia? Leonid Volkov joins Andrea Kendall-Taylor and Jim Townsend to discuss the June 16 Biden-Putin summit, the trajectory of U...
By Andrea Kendall-Taylor, Jim Townsend & Leonid Volkov
VideoFmr. NIC Officer: What About-ism Was 'Tremendous' in Putin Press Conference
Andrea Kendall-Taylor, former Deputy National Intelligence Officer for Russia at the National Intelligence Council, joins Andrea Mitchell, Chuck Todd, and Kasie Hunt to break ...
By Andrea Kendall-Taylor