June 16, 2022

Sanctions by the Numbers: Economic Measures against Russia Following Its 2022 Invasion of Ukraine

By Emily Kilcrease, Jason Bartlett and Mason Wong

Executive Summary

Following the unprovoked Russian invasion of Ukraine in late February, the United States and its allies have unleashed an impressive array of economic measures against Moscow, using a wide range of economic tools to weaken Russian military operations, as well as punish and disincentivize those offering financial or logistical support for its continued aggression toward Ukraine. These joint measures include multilateral economic sanctions, financial restrictions, and export controls on key sectors of the Russian economy such as banking (229 designations), energy (8), technology (32), defense and transportation (480), and personal sanctions on Russian elites and oligarchs (663).

To date, one of the most significant actions was the sanctioning of the Central Bank of Russia by the Group of Seven and other economies, which has effectively cut Russia off from accessing assets denominated in currencies that account for 95 percent of global foreign exchange reserves. In total, U.S. President Joe Biden’s administration has imposed more than 1,500 discrete sanctioning actions on over 800 targets related to Russia’s invasion of Ukraine. Additionally, almost 1,000 foreign companies have “self-sanctioned” by shuttering or curtailing their operations in Russia, which has contributed to Moscow’s financial isolation from the global economy.

Sanctions will continue to escalate as long as the Russian invasion continues. Along with enhanced enforcement efforts, a core area of focus will be developing options to target Russia’s energy sector more holistically. Europe’s dependency on energy imported from Russia, mainly oil and natural gas, have allowed Moscow to continue funding its military operations in Ukraine. At the same time, Russia may be increasingly willing to weaponize its energy leverage over Europe, as it has begun to do with Poland and Bulgaria, heightening the need for the urgent development of alternative energy sources.

Sanctions easing—if at all—will be contingent on a Ukrainian-led political settlement to the conflict. Ukraine and the sanctioning economies will need to consider difficult trade-offs between the imperative to end the conflict on terms acceptable to Ukraine, the need to prevent Russia from future aggression toward its neighbors, and the desire to hold Russian President Vladimir Putin and other Russian officials accountable for a horrific war. This process will be complicated if there is no clear victor in the conflict. Russia is likely to remain a heavily sanctioned regime for the foreseeable future.

Sanctions easing—if at all—will be contingent on a Ukrainian-led political settlement to the conflict.

The ripple effects of these unprecedented sanctions on the global economy will worsen over time, as tight energy markets become more strained, shocks to the supply of food commodities aggravate food insecurity in the developing world, globalized trade shrinks, and inflation rises. Leaders of the sanctioning economies will need to be watchful for the erosion of strong public support for the sanctions if these factors exacerbate recessionary trends at home. Ukrainian President Volodymyr Zelenskyy’s role in inspiring and cajoling the allies to continually expand and solidify support to Ukraine will be critical in maintaining increasingly high levels of sanctions.

This edition of Sanctions by the Numbers provides a snapshot of U.S. and allied economic measures against Russia following its invasion and continued aggression toward Ukraine, an overview of the most sanctioned sectors of the Russian economy, potential obstacles to enforcing joint sanctioning actions against Russia, and an outlook on potential escalation or de-escalation with Moscow. This edition seeks to provide a holistic overview of the major sanctions actions and their impacts, with a focus on U.S. actions, but does not purport to list each of the hundreds of sanctions actions in detail. It also does not cover any actions announced after May 11, 2022.

Allied Sanctions Strategy in Support of Ukraine

In response to Russia’s unprovoked invasion of Ukraine, the United States and its allies have issued a sweeping set of sanctioning actions on Russia at an unprecedented intensity and pace. This united economic front is designed to isolate the world’s 11th largest economy from the global economy and impair Moscow’s ability to sustain its military campaign through a series of measures including financial sanctions, export controls and import bans, asset freezes and seizures, debt and equity restrictions, and travel bans.

Battling over the Russian Economy

The allied sanctions have inflicted serious damage on the Russian economy, leading to significant capital outflows and brain drain. The joint economic measures have prevented or delayed many financial transactions that could have supported the Russian economy, with the Institute for International Finance estimating that Russia’s GDP will contract by 15 percent this year. Moreover, foreign companies are exiting en masse, with over 750 companies having shuttered or curtailed their Russia operations as of early May. Russia has threatened to nationalize assets of Western firms leaving the country and arrest corporate leaders who criticize the government.

The Russian government has enacted several defensive measures to mitigate the economic damage of sanctions. After the initial tranches of sanctions, the Russian ruble quickly fell over 30 percent, valuing less than a U.S. penny at 1/137 of a dollar. However, the ruble has since recovered much of its original value due to aggressive Russian capital controls and a continued stream of revenue generated from the country’s oil and gas exports, which so far have been largely spared from sanctions. Russia’s defensive economic measures include more than doubling its interest rate to 20 percent and shuttering its stock market. Thus far, these actions appear to have had inconsistent effectiveness. Although the ruble has largely recovered from its initial crash in the first days of the invasion, Russia’s stock market recovery remains rocky, with the Moex stock index having risen by less than 10 percent after a dramatic 40 percent crash in late February. The ruble stabilization, too, has come at a cost. To assist in its ability to conduct monetary policy, Russia has required private firms and exporters to sell 80 percent of their export proceeds into the Russian ruble market and plans to use its gold reserves for purchases, although such plans are likely to be hampered by recent U.S. moves to prevent Russia from using its gold reserves abroad to evade economic sanctions.

As the conflict in Ukraine continues, the grip of U.S. and allied sanctions will tighten. Wind-down periods baked into many of the current sanctions packages will expire, and inflation will likely rise. Russia will feel the bite of new U.S. and allied export controls as existing technology stocks will not be replaced in key strategic sectors, such as defense, transportation, and communication. Russia will also likely head toward default. Moscow authorized non-ruble payment to avoid its first foreign currency default in more than a century, or first default of any kind since its 1998 local currency default, announcing in mid-March that it ordered $117 million in interest payments to be sent to investors. Moscow will likely be unable to continue to pay as global economic sanctions continue to restrict access to its financial assets abroad. A Russian default would mark the largest economy to fail to make payments on its sovereign debts in the 21st century.

Climbing the Escalation Ladder

The allies will continue to escalate sanctions for the duration of the conflict in Ukraine. Part of this strategy will include robust enforcement through coordinated actions, as discussed in detail later in this report. Further escalation through the imposition of new measures will be a challenge because the allies started high on the escalation ladder, including through the early use of central bank sanctions. This means that additional actions have marginally less impact than the initial tranches—with the notable exception of further actions targeting Russia’s lucrative energy sector. Additional entities and individuals will be added to the various designation lists, constraining their ability to access Western finance and technology. Financial and technology sanctions will continue to target key parts of the Russian economy, including the Russian defense sector, which is critical to Russia’s ability to sustain the invasion in Ukraine and project power over the long term. The allies may consider eliminating the flexibility that was intentionally built into the financial sector sanctions or tightening the exemptions for payments of debt and other transactions.

The last meaningful target is Russia’s energy sector and sanctions will gradually become more viable as Europe takes further steps to reduce its energy dependence on Russia and higher prices prompt both demand destruction and some additional supply. Currently, Russia’s energy exports are generating hard currency inflows. As a result of high commodity prices and a collapse in imports, Russia’s current account will reach an all-time high of $250 billion in 2022. In a bit over a year, Russia will be able to rebuild its frozen reserves of $300 billion, despite the coordinated Group of Seven (G7) sanctions on the Central Bank of Russia. Removing energy financing for Russia would have a devastating impact. Historically, oil and oil products accounted for 40 percent of Russia’s exports and gas for around 10 percent. However, given the recent spike in gas prices, the role of gas in bringing foreign exchange has likely increased meaningfully. Oil remains critical for Russia’s budget with mineral extraction and export taxes contributing roughly 30 percent to Russia’s budget and close to 50 percent during crisis times when other sources of revenue shrink as the economy contracts.

Further escalation through the imposition of new measures will be a challenge because the allies started high on the escalation ladder, including through the early use of central bank sanctions.

In early April, the European Union (EU) announced its intent to levy future sanctions on Russian oil, as well as future taxes on Russian energy and the creation of specific payment channels such as escrow accounts to deal with energy-related transactions. Sanctions analysts have proposed a gradual tightening of sanctions in step with a reduction in imports, similar to a phased approach taken in the Iran context. The allies will also likely continue to engage in diplomatic efforts with major energy producing Gulf states on increased energy production as part of broader effort to avert even higher energy prices and to assist Europe in finding alternate sources of energy without sparking shortages in other regions. These actions, if and when they come, will reinforce and have more bite than the existing U.S., UK, and Canadian energy restrictions (discussed later in this paper).

In late April, Russia began to weaponize its natural gas supply. Gazprom, Russia’s energy giant, halted gas exports to Poland and Bulgaria over their refusal to pay for supplies in rubles. However, Warsaw has stated that there are “options to get the gas from other partners” and that Poland has “taken some decisions many years ago to prepare for such a situation,” signaling the country’s confidence in its economic resiliency to find alternatives to Russian gas. Meanwhile, the Bulgarian energy minister, Alexander Nikolov, claimed that Bulgaria had already paid for Russian gas deliveries for April and that Gazprom is in breach of its current contract if it halts gas flows. Although Sofia has also announced its search for alternative energy sources, Bulgaria currently relies on Gazprom for more than 90 percent of its gas supply. This has raised concerns across the EU, especially in central Europe, where countries like the Czech Republic rely almost entirely on Russian gas for energy. Moscow’s retaliation may be an indication that Russia views further sanctions in the energy sector as inevitable and is seeking to maximize pain in Europe by cutting off supplies before Europe is prepared to switch to alternatives.

The Humanitarian Cost of Sanctions

At the same time as allies are continuing to escalate sanctions, they will need to address the impacts that the sanctions and the armed conflict have on food security and other humanitarian concerns, both in Russia and globally. In an attempt to levy “smart sanctions” that target Russian leadership but not the Russian population, the U.S. Treasury has issued guidance documents and several general licenses that allow for the continuation of transactions with Russia involving food, fertilizer, medicine, and other humanitarian supplies. Companies, however, face significant logistical difficulties moving products into or out of Russia or Ukraine, including through critical Black Sea shipping routes, and aggressive de-risking of Western financial institutions may make licit transactions for humanitarian purposes nearly impossible to execute. Certain sanctions were calibrated to avoid direct impacts on the population, such as the initial sanctions on Sberbank—Russia’s largest retail bank—which did not fully block transactions, and the technology export controls, which permit for the continued sale of consumer communication devices. The strategy of smart sanctions, however, may have reached its limits. The full scale of the multiple rounds of coordinated sanctions has caused commercial effects far beyond the legal scope of the sanctions measures, and some companies have even voluntarily withdrawn from the Russian market entirely. The ripple effects of the sanctions on the global economy may also worsen over time, as tight energy markets become more strained, shocks to the supply of food commodities aggravate food insecurity in the developing world, globalized trade shrinks, and inflation rises.

Sanctions as Part of Broader Political Settlement

It remains fundamentally unclear whether sanctions have materially changed Russian President Vladimir Putin’s calculus. The threat of sanctions did not deter the invasion of Ukraine, and Russia continues to intensify its military attack across Ukraine against both military and civilian targets. The Kremlin has declared U.S. economic actions against Russia as “economic warfare,” while Washington and its allies continue to look for additional economic measures that may constrain Russia’s ability to project power and continue executing its war.

Against this backdrop of economic wreckage and the human tragedy unfolding on the ground in Ukraine, sanctions relief will only come in the context of a broader political settlement to end the conflict. It remains uncertain how meaningful sanctions relief will be as a bargaining chip in the context of broader political discussion to end the war. In part, this may depend on whether and how quickly the military battle grinds into a stalemate that is unsustainable for Russia and whether the most biting effect of the sanctions has sunk in by that point, noting that the sanctions may be most potent in their ability to erode Russia’s economy over a period of months or years. For example, both U.S. Secretary of Defense Lloyd Austin and U.S. Secretary of State Antony Blinken expressed intent to weaken the Russian military to a point where it no longer has the capability to invade its neighbors. Ultimately, sanctions will be only one of several factors—along with Ukraine’s ability to sustain a robust resistance—that may compel Russia to consider a political settlement to the conflict.

If a political discussion around sanctions relief becomes viable, Ukraine and the allies will face difficult decisions in balancing policy objectives that may be in tension. A near-term priority will be to use sanctions relief as one part of a broader package to bring an immediate end to hostilities, stemming the loss of Ukrainian lives and halting the destruction of Ukraine. As of early May, an estimated 15,000 Russian soldiers have died in this war along with over 8,000 recorded Ukrainian civilian casualties. In addition, more than five million Ukrainian refugees have fled the country. The Ukrainian government has estimated that reconstruction efforts will cost at least $565 billion USD. There are ongoing debates in the United States and abroad about whether it is legally permissible to use frozen, seized, and impounded Russian financial assets to fund the reconstruction of Ukraine. In addition to numerous deluxe villas and yachts, the Italian authorities recently impounded a nearly $700 million superyacht on the northern coast of Tuscany with strong ties to Putin himself. The United States and the United Kingdom have also considered seizing property belonging to Russian oligarchs. However, there is significant uncertainty over the legality and legal process required to actually confiscate and sell property belonging to foreigners to help rebuild Ukraine, which makes this challenging. In his latest aid package proposal to Ukraine, Biden asked Congress to provide him with the authority to formally confiscate financial assets belonging to sanctioned oligarchs, but the only relevant equivalent would be the Patriot Act of 2001, which created a limited exception to confiscation bans, although it has never been used in the current context facing Ukraine.

Against this backdrop of economic wreckage and the human tragedy unfolding on the ground in Ukraine, sanctions relief will only come in the context of a broader political settlement to end the conflict.

An equally important objective will be to ensure that Russia never again has the capability to militarily threaten its neighbors. The allies’ view of Putin has been clarified because of the invasion and his European neighbors no longer see him as a leader with whom they can work with in good faith. Rather, his leadership presents an existential threat to Europe’s security, particularly for the Baltic states and other countries that may be in Russia’s geographic or historic orbit. In this framing, it becomes more difficult to envision a sanctions-easing strategy that provides a respite for the Russian economy while still impeding Russia’s future military strength. Relief for Russia’s central bank and major financial institutions would be important to restore the normal functioning of Russia’s economy, but it may be naïve to expect that such institutions would not support Russia’s military apparatus. Sanctions on Russian defense entities and the sweeping controls on exports of technology to Russia are unlikely to be removed, given the direct implications for Russia’s future military strength. Shifts in the energy relationship between Russia and Europe will be permanent, as Europe will have little appetite to snap back to a relationship of dependency if it is able to take the politically and economically difficult steps to wean itself off Russian supply. Given these dynamics, longer-term strategic considerations for European security may complicate meaningful sanctions relief as a part of a diplomatic process to negotiate an end to the war.

A further hurdle for sanctions easing is the understandable desire to punish Putin, whom the United States has now accused of war crimes, and those who enabled him to wage war on Ukraine. In an official testimony in early March, Under Secretary of State for Political Affairs Victoria Nuland stated that the U.S. government and its allies are “resolved to hold Russia and its forces accountable for any and all human rights abuses, violations of international humanitarian law, and war crimes they commit in Ukraine.” There will be little public or political sympathy for sanctions relief on the hundreds of oligarchs who were enriched in Putin’s Russia, as evident by the warm reception of each new announcement of a seized superyacht. A policy objective of punishing Putin and those individuals and institutions that supported him—even after a resolution to the conflict—may be important as an expression of Western values, along with serving as a warning to other authoritarian leaders or future leaders of Russia. One risk of a strategy of punishment is that it may dissuade Putin from seeking a peaceful resolution to the conflict, as it is then framed in existential terms for him personally. However, many in Europe may believe that threshold has already been crossed, as it is difficult to imagine that the future security of Europe can coexist with Putin’s continuation in power. U.S. President Biden’s “personal” remarks about Putin reflect this sentiment at an emotional level, even if the allies do not have a formal policy of pursuing regime change.

Russia is likely to remain a heavily sanctioned jurisdiction for the foreseeable future. Even if some sanctions easing is ultimately provided, the Russian economy has contracted sharply and become deeply unattractive to outside investors and firms. Companies exiting Russia with a loss may find it difficult to return, especially if their assets have been frozen by Russian entities. The cascading economic effects of the hundreds of sanctions actions, the de-risking of Western financial institutions, Russian brain drain, and the reputational risks imposed on Western firms doing business in Russia will permanently shape Russia’s economic trajectory for years to come. As one renowned economic expert has put it, we are going back to the USSR as the impact of the sanctions erase decades of economic progress in Russia.

U.S. Authorities Overview

The Biden administration has taken over 1,500 discrete sanctioning actions, including traditional economic sanctions and novel export controls, on over 800 targets related to Russia’s invasion of Ukraine. In particular, the U.S. government has used a wide range of existing and new sanctioning authorities available to the Departments of the Treasury and State (1,032), as well as Commerce (260). In addition to new designations, the United States has redesignated or expanded existing sanctions on certain entities and persons pursuant to various sanctioning authorities following the Russian invasion of Ukraine.

Sanctioning Actions Related to the 2022 Invasion of Ukraine by Program

While the U.S. government has used a variety of country-specific and thematic sanctions programs to address Russian aggression in Ukraine, Washington levied the majority of new designations pursuant to RUSSIA-EO14024. (Data from the U.S. Departments of the Treasury, State, and Commerce)

U.S. government sanctions actions have included designations under existing programs related to:

  • Russian efforts to engage in harmful foreign activities, including efforts to undermine the security of countries and regions important to U.S. national security and to violate well-established principles of international law, including respect for the territorial integrity of states (EO 14024); this authority has been used extensively to designate Russian banks, oligarchs, military companies, vessels, and aircraft under the RUSSIA-EO14024 program.
  • Actions and policies to undermine democratic processes in Ukraine and threaten its peace, security, stability, sovereignty, and territorial integrity, which are authorities established in response to Russia’s 2014 annexation of Crimea (EO 13660, EO 13661, EO 13662); these executive orders include the UKRAINE-13660, UKRAINE-13661, and UKRAINE-13662 programs.
  • Interference in U.S. elections (EO 13848), illicit cyber activity (EO 13694), and weapons of mass destruction (EO 13382), which have been mostly used to expand the range of individuals designated who are associated with Russia’s state propaganda apparatus; these executive orders, which cover the ELECTION-EO13848, CYBER2, and NPWMD programs, respectively, have been used in tandem with EO 13722 and EO 13687 to sanction Russian individuals under the weapons of mass destruction–related DPRK2 program.
  • Energy security, including the Protecting Europe’s Energy Security Act of 2019 (PEESA), which was used to reinstate sanctions related to the Nord Stream 2 pipeline and restrictions on Russian Energy Export Pipelines (EO 14039); the few energy sanctions implemented through Treasury have relied on these authorities through the PEESA-EO14039 authority.
  • Countering America’s Adversaries Through Sanctions Act (CAATSA).
  • Human rights, including the Sergei Magnitsky Rule of Law Accountability Act of 2012 (Magnitsky); this covers the MAGNIT authority used to target a handful of Russian elites.
  • Visa and travel restrictions on Russian oligarchs and their family members, as well as Russian and Belarusian government officials responsible for facilitating the continued invasion of Ukraine and associated human rights abuses in Eastern Europe, including Putin and Belarusian President Alexander Lukashenko pursuant to several authorities, such as Section 212(a)(3)(C) of the Immigration and Nationality Act, Department of State, Foreign Operations, and Related Programs Appropriations Act, and RUSSIA-EO14024.

Biden also signed four new executive orders expanding U.S. sanctioning authorities to prohibit all trade and investment in the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) (EO 14065), ban U.S. imports of Russian energy (EO 14066), implement further restrictions on U.S. trade and investment with Russia (EO 14068), and prohibit new investment in and provision of services to Russia at the discretion of the Treasury and State Departments (EO 14071).

Additionally, the Commerce Department has issued multiple sets of amendments to the Export Administration Regulations imposing far-reaching export controls on Russia, as well as Belarus for its support of the Russian invasion. Treasury later expanded these controls, implemented new controls related to oil and gas refining equipment and luxury goods, and added multiple entities to the Entity List.

The Waves of Sanctions

The United States and allies responded to the further invasion of Ukraine with swift and severe economic sanctions. In a series of coordinated efforts, national governments imposed tranches of economic sanctions and financial restrictions in immediate response to the invasion and continued to increase sanctions for subsequent days and weeks. Individually, each of the measures were impactful. However, the combination and speed of each joint sanctions package in succession resulted in a multiplier effect that both Moscow and the private sector failed to anticipate.

Wave 1: Pre-Invasion Response to Russia’s Recognition of Donetsk and Luhansk

On February 21, 2022, Putin announced Russia’s recognition of the so-called DNR and LNR separatist regions in Ukraine.

Within hours, the United States banned all trade and investment with these two regions, and established a new authority to impose sanctions and travel restrictions on any person determined to operate in the two separatist regions in Ukraine under a new executive order. The following day, the Treasury imposed full blocking sanctions on two state-owned Russian financial institutions: Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB)—Russia’s fifth largest bank, which provides over $20 billion in financing for Russia’s domestic economic development—and Promsvyazbank Public Joint Stock Company (PSB), which services nearly 70 percent of Russian defense contracts and is Russia’s eighth largest bank. The Treasury expanded sovereign debt restrictions to prohibit U.S. persons from participating in secondary markets for new debt issued by key Russian government financial institutions, expanding on prior restrictions related to primary debt markets. The first wave of designations also placed full blocking sanctions on key Russian elites, including the Director of the Federal Security Bureau Alexander Bortnikov; his son, PSB Chairman Petr Fradkov; and Sergei Kiriyenko, a key Putin ally and Russian social media magnate. In some instances, the U.S. government designated previously sanctioned individuals under newer Russia-specific executive orders, likely an effort to publicly denounce all those who support the Russian invasion of Ukraine.

Wave 2: Major Bank Sanctions and Export Controls in Response to Russia's Invasion of Ukraine

On February 24, 2022, Russia launched its further invasion of Ukraine.

By that evening in Washington, the United States and allies announced a broad range of sanctions targeting key Russian financial institutions and imposing new controls on the export of strategic technology to Russia. Following Germany’s action to halt the controversial Nord Stream 2 AG gas pipeline, the United States removed its waiver of previous sanctions on Nord Stream 2, its CEO, and its corporate officers under PEESA, allowing the sanctions to move forward.

Specifically, the Treasury imposed full blocking sanctions on four major Russian banks—VTB Bank (Russia’s second largest bank), Bank Otkritie, Novikombank, and Sovcombank. Full blocking sanctions freeze any of these institutions’ assets that touch the U.S. financial system and prohibit U.S. persons from engaging with them. The Treasury also imposed correspondent and payable-through account sanctions on Sberbank, Russia’s largest bank. While not full blocking sanctions at the time, these measures nonetheless significantly restricted Sberbank’s ability to engage in cross-border activity using U.S. financial infrastructure and reflect a goal of cutting off Russia from the global financial system, while targeting the government, not the population. Sberbank was later moved to full blocking sanctions and will be discussed later in this report. Finally, this sanctions package also included new debt and equity restrictions on 13 Russian banks or state-owned enterprises including Sberbank; Gazprombank; and institutions in the energy, agricultural, telecommunications, and transportation sectors. In coordination with Washington, U.S. allies, including the EU, as well as other allies such as the UK, Canada, New Zealand, Australia, Norway, Japan, and Taiwan, have also imposed similar economic restrictions on Russian banks.

The U.S. government sanctioned Russian elites and major business executives responsible for providing financial support to continue Putin’s invasion of Ukraine. Washington has sanctioned key Russian oligarchs and their family members to restrict their ability to move and conceal financial assets either benefiting their own economic corruption or providing fiscal support to the Russian military. These actions intend to address rampant levels of kleptocracy within the Russian economy and prevent family members of sanctioned targets from assisting in sanctions evasions, traveling to the United States, and accessing their familial assets abroad.

Washington has sanctioned key Russian oligarchs and their family members to restrict their ability to move and conceal financial assets either benefiting their own economic corruption or providing fiscal support to the Russian military.

The Department of Commerce imposed a sweeping set of export controls designed to constrain Russia’s ability to project military power. These include new rules applied on an economy-wide basis to prohibit the export of strategic technologies to any user in Russia, while generally allowing for the continued flow of purely commercial goods. A more restrictive set of controls was applied to designated military end users, which are prohibited from receiving practically any U.S.-origin item other than food and medicine. The United States applied its new rules on an extraterritorial basis through its unique “foreign direct product rule,” which applies controls on foreign-made goods if those goods are made using U.S. technology, tools, or software. Over 30 countries have joined in implementing substantially similar controls, and these countries are excluded from application of the foreign direct product rule to goods originating from their jurisdictions. The breadth of the items covered, along with the unprecedented level of coordination among major economies, marks a transformational change in the use of export controls as a sanctions instrument rather than an arms control mechanism.

In this wave, the United States and its allies expanded their focus to include Belarus for its support of the Russian invasion of Ukraine. The Treasury designated two state-owned Belarusian banks on February 24, along with 17 Belarusian defense officials and military-affiliated entities. The EU likewise adopted restrictive measures against Belarusian officials, including Lukashenko. These new economic sanctions will strengthen existing financial restrictions on Lukashenko’s regime, including painful restrictions on its fertilizer exports, imposed through previous U.S., EU, Canada, and UK sanctions linked to his human rights abuses surrounding the fraudulent Belarusian presidential elections in August 2020.

Wave 3: Personal Sanctions on Putin and Elites, Central Bank Sanctions, and SWIFT

International agreement to continue escalating sanctions arrived quickly, in large part due to personal appeals from Ukrainian President Volodymyr Zelenskyy directly to European and world leaders. By February 25, just a day after the invasion started and the first major tranche of sanctions, the allies moved again to impose personal sanctions on Putin, Foreign Minister Sergei Lavrov, and other political elites. That action was quickly followed one day later with the announcement of one of the most severe sanctions available—coordinated G7 sanctions against Russia’s central bank. Europe, and most importantly Germany, finally agreed to previous demands to cut key Russian banks off from the SWIFT messaging system.

The sanctions on Putin are a stinging rebuke of a sitting president, as he now joins the list of other designated authoritarian leaders like Kim Jong Un, Nicolás Maduro, Bashar al-Assad, and Ali Khamenei. While Putin’s personal fortune—estimated to be one of the largest in the world—is likely stored in a wide variety of anonymized or pseudonymized accounts that may make these individual sanctions difficult to enforce, the United States and its allies chose to publicly denounce Putin himself by imposing these personal sanctions. Other elites sanctioned along with Putin include Lavrov, Kremlin Spokesperson Dmitriy Peskov and his family members, as well as 11 members of the Russian Security Council. U.S. allies—the EU, the UK, Canada, Australia, New Zealand, and Japan—have also sanctioned Putin and those close to him. In retaliation, Moscow issued its own sanctions against Biden and his son Hunter Biden, as well as 12 U.S. government officials including Press Secretary Jen Psaki, National Security Advisor Jake Sullivan, Deputy National Security Advisor Daleep Singh, U.S. Agency for International Development Administrator Samantha Power, Deputy Secretary of the Treasury Wally Adeyemo, President of the Export-Import Bank of the United States Reta Jo Lewis, and former Secretary of State Hillary Clinton.

The G7 economies also imposed sanctions on the Central Bank of the Russian Federation, one of the most impactful measures for the Russian economy. Under the U.S. action, U.S. persons are prohibited from engaging in any transaction involving the central bank, as well as the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. The prohibitions include any transfer of assets to such entities or any foreign exchange transaction for, or on behalf of, such entities. Washington levied these sanctions on the central bank alongside similar economic actions from the EU, the UK, Canada, Australia, Japan, South Korea, Singapore, and even historically neutral Switzerland. In effect, this froze over $300 billion of the central bank’s $643 billion in assets that are denominated in the currencies of any of the participating economies. This accounts for over 95 percent of global foreign exchange reserves. The central bank sanctions curtail Russia’s ability to leverage its foreign exchange reserves to conduct monetary policy, manage the depreciation of the Russian ruble, and mitigate the impact of economic sanctions on Russian entities. Additionally, the Treasury targeted the Russian Direct Investment Fund, a state-owned wealth fund widely suspected to be a slush fund for Putin and his allies, to further restrict possible funding for Russia’s invasion of Ukraine.

The EU, supported by the allies and encouraged by Ukraine, acted in early March to “de-SWIFT” seven major Russian banks—VTB Bank, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, and VEB. The Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is a Belgium-based electronic payment network that provides secure financial messaging services. SWIFT does not transfer money itself but does play a critical role in facilitating efficient cross-border payments for the vast majority of financial institutions around the globe. SWIFT is a European entity, and thus the EU action to prohibit the provision of financial messaging services to the prohibited banks serves as an effective global cut-off, even without parallel action from other jurisdictions. Under these new EU regulations, the seven banned Russian banks no longer have access to this global messaging system used to help facilitate the transfer of funds internationally. However, the EU ban notably excludes one of Russia’s largest banks, Gazprombank, consistent with the broader strategy to provide channels for energy-related payments. This carveout for energy-related payments persists even as EU authorities have announced plans to sanction Sberbank, another major Russian financial institution previously given lighter sanctions treatment.

Wave 4: More Sanctions on Belarus, Oil and Gas Export Controls, and New Entity List Designations

On March 2, the allies continued tightening pressure on Russia, further turning their attention to Belarus and other sources of material support for the Russian military, along with expanding the scope of the export control measures.

The Commerce Department announced sweeping export controls on Belarus as a consequence of its support of the Russian war effort. The export controls on Belarus are essentially a “cut and paste” of the new Russia export controls, in that they control the same set of strategic technology trade with Belarus on an economy-wide basis and prohibit the export of all items other than food and medicine to designated Belarusian entities. The novel foreign direct product rules, which extend application of the U.S. export controls extraterritorially, were also applied to Belarus and the Belarusian entities. Additionally, this set of export controls made key changes to the initial set of Russia export controls, notably by eliminating most of the encryption-related exceptions that had previously allowed for the continued shipment of many chips, servers, and other electronic goods. Export of these products to Russia and Belarus are now severely constrained.

On March 3, the Treasury and State Department announced a series of sanctions targeting Russian elites and defense enterprises. All these actions significantly raise the Russian government’s costs related to replacing key military equipment, including vehicles, aircraft, electronic warfare systems, drones, and missiles, as well as Russian political elites and individuals close to Putin helping to finance the invasion of Ukraine. This involved full blocking economic sanctions, as well as travel bans and visa restrictions against Russian oligarchs, their family members, and close associates. Several of the individuals targeted by full blocking sanctions—including Transneft president Nikolai Tokarev, VEB chairman Igor Shuvalov, and Wagner Group owner Yevgeniy Prigozhin—have been key contributors to Russian military power abroad. On the same day, the United States also targeted 33 entities and individuals involved in Russian disinformation operations related to the invasion of Ukraine. These actions were later strengthened on May 8 when the U.S. government issued additional sanctions on three major Russian state-owned television stations that have been the largest recipients of foreign advertising revenue. This revenue is absorbed by Moscow and could potentially help fund Russia’s war in Ukraine. The EU and UK also imposed their own sanctions on two Russian state-owned media broadcasting services—RT and Sputnik—effectively prohibiting internet service providers from allowing these media outlets to be viewed on their services. This marks another dimension of the U.S. effort to stymie Russia’s military operations, aimed at impeding the ability of Russia to carry out a “hybrid war” strategy, including information warfare and misinformation regarding the war in Ukraine.

On March 4, the Commerce Department announced additional designations and export controls. These measures included export restrictions on oil and gas refining equipment, as part of a broader effort to constrain Russia’s future energy sector growth. Commerce also added 91 entities contributing to Russia’s military and defense sectors to the Entity List, prohibiting them from receiving U.S.-origin technology.

Wave 5: Bans on Russian Oil and Gas

As the war continued and Russia aggressively targeted the innocent civilian population of Ukraine, political pressure in the United States and from Zelenskyy intensified to target Russia’s lucrative energy sector. Prior actions had largely focused on future production, intentionally designed to avoid impacts on current production and the critical supply of Russian energy to Europe. On March 8, President Biden signed an executive order prohibiting the import of Russian oil, liquefied natural gas, and coal to the United States and banning U.S. involvement in financing the Russian energy industry. While an important step toward targeting Russia’s current energy production and revenue streams, the U.S. imports account for less than 10 percent of Russia’s total exports.

Certain U.S. allies also banned or moved to eventually ban Russian energy alongside Washington. The UK announced shortly before Washington that it would phase out Russian oil imports by the end of the year and Canada announced a total ban on its admittedly minuscule Russian energy imports. While important symbolic moves, neither country is a major importer of Russian oil—Canada imports between 0–3 percent of its oil products from Russia each year, and Russian imports account for around 8 percent of total UK oil demand. Australia, too, announced plans to phase out imports. Notably, no European country joined these actions and President Biden explicitly noted that the United States did not expect all allies to join the U.S. import ban. However, many European refiners have avoided new purchases of Russian crude, helping to drive a major discount between Russian Ural crude blends and other supplies. To lessen the impact on European and global energy markets, the Biden administration announced roughly two weeks later, in coordination with its allies and partners, the release of nearly 180 million barrels of oil from global petroleum reserves.

Wave 6: Revocation of Russia’s Benefits in Multilateral Economic Organizations and Further Trade and Investment Restrictions

On March 11, the United States and its G7 partners announced an agreement to revoke Russia’s most favored nation (MFN) status at the World Trade Organization (WTO). Although these measures stop short of expelling Russia from the WTO, which would be legally and diplomatically complicated under the WTO’s legal framework, the revocation of Russia’s MFN status will cause tariff rates to rise on many Russian exports to G7 countries, constraining Russia’s ability to export goods competitively. Each economy will implement the MFN revocation under its own domestic procedure. In early March, Congress began the process of passing legislation to authorize the president to do so through the revocation of Russia’s permanent normal trade relations (PNTR) status and instructed the administration to push for both Russia’s and Belarus’ expulsion from the WTO, which has now become law.

The allies also announced plans to deny Russia borrowing privileges at the International Monetary Fund (IMF) and the World Bank, including limiting access to its special drawing rights holdings. Russia currently remains a member of the Group of 20, although President Biden has called for its expulsion over its continued invasion of Ukraine. It was previously removed from the Group of 8 following the 2014 invasion of Crimea. As of early May, the United States has not moved to expel Russia from the multilateral export control regimes, including the Wassenaar Arrangement, which sets controls for the range of dual-use technologies that the allies have now banned for export to Russia, though such an effort may be forthcoming. In sum, these measures reflect the strong sense among the allies that Russia, by violating one of the most sacrosanct laws of the international order by invading a sovereign state, has forfeited its right to benefit from the international, rules-based economic system.

Along with the WTO announcement, the United States announced a new executive order prohibiting the import of Russian seafood, diamonds, and alcoholic beverages, hitting at large swathes of the remaining import flows from Russia to the United States. This action also established new authorities to ban new investments in any sector of the Russian economy, extending the potential for investment restrictions beyond the previously announced energy sector restrictions.

These measures reflect the strong sense among the allies that Russia, by violating one of the most sacrosanct laws of the international order by invading a sovereign state, has forfeited its right to benefit from the international, rules-based economic system.

On the same day, the Treasury announced another set of sanctions on Russian political elites and oligarchs, including 12 members of the Russian Duma and Russian industrial magnate Viktor Vekselberg. Other sanctions designated the family members of previously sanctioned Russian national security officials and the board members of VTB Bank, one of the first Russian financial institutions to face restrictions. The Commerce Department also announced new export controls targeting the export of luxury goods to Russia, Belarus, or designated Russian or Belarusian persons wherever located, in a move designed to increase pressure on the lifestyle of corrupt oligarchs. Four days later, the UK and the EU issued their own complementary export restrictions on Europe-origin luxury goods to Russian elites, such as automobiles, artwork, and designer handbags, continuing a pattern of asset seizures and financial restrictions against Russian oligarchs.

Wave 7: Sanctions on Members of the Russian State Duma and the Entity Itself

On March 24, the U.S. government designated 328 members of the Russian State Duma, essentially the Russian Federal Assembly, for misusing its legislative power to “target domestic dissenters and political opponents, disrupt the free flow of information, and restrict the human rights and fundamental freedoms of the citizens of Russia.” This governmental action will add full blocking sanctions and visa restrictions on the majority of members of the Russian State Duma, and the Duma itself as an entity, as well as Herman Gref, the head of Sberbank and a close ally of Putin. In total, the U.S. government has sanctioned over 400 Russian oligarchs and elites in 2022, restricting their ability to travel to the United States, access the U.S. dollar for financial transactions, and access their financial and property assets abroad such as bank accounts and luxury products like yachts.

Wave 8: Additional Full Blocking Sanctions on Russian Financial Institutions, Investments, State-owned Enterprises, Elites, and Certain Energy Imports

On April 6, the United States joined the EU and the G7 in imposing yet another wave of economic sanctions on Russia. This joint action occurred after accounts emerged of the Russian military committing systematic human rights violations against innocent Ukrainian civilians such as torture, mass executions, and group rape. These accounts are currently under investigation for potential war crimes. The new U.S. sanctions package included full blocking sanctions on Sberbank, which holds nearly one-third of the country’s total banking sector assets and had previously been subject to less severe restrictions due to a desire to avoid direct impacts on consumer accounts, and Alfa Bank, which is Russia’s largest privately-owned financial institution. Consistent with prior actions, these sanctions include exceptions for transactions related to the energy sector. The U.S. package also included a new prohibition on investments in Russia, additional full blocking sanctions on major Russian state-owned enterprises and Russian elites, and restrictions on Russia’s ability to make debt payments. To address rising concerns about the broader humanitarian impacts of the conflict, the United States published a fact sheet on permissible transactions related to humanitarian aid and food insecurity, reiterating its commitment to support sectors essential to humanitarian activities during times of conflict.

Europe has also addressed aggression against Ukrainian citizens with its own six-pillar response after the President of the European Commission Ursula von der Leyen recognized Russian military actions in occupied regions of Ukraine, including Bucha, as war crimes. In its sanctions package, the EU took initial steps to cut energy reliance on Russia via an import ban on coal from Russia, worth roughly €4 billion (about $4.7 billion USD) per year. The EU also signaled an intent to target oil imports in the near future and is reportedly exploring a range of measures short of a full import ban. This will potentially include halving Russian oil imports to Europe by the summer and transitioning to zero imports by the end of 2022. The EU implemented a full transaction ban on four key Russian banks that collectively represent 23 percent of total market share within the Russian banking sector; a ban on Russian and Belarusian road transport operations, as well as Russian vessels and Russian-operated vessels from accessing EU ports; and import bans on wood, cement, seafood, liquor, and other products.

Russia Sanctions by Target and Sector

The U.S. government has used sanctioning authorities of the Departments of State, the Treasury, and Commerce to target sectors of the Russian economy that contribute to Moscow’s unprovoked invasion of Ukraine. These sectors include Russian elites and oligarchs who use their accumulated wealth to support Putin and his military invasion; the defense and transportation industries that provide weaponry and paths to move infantry; financial institutions, like banks, that help fund military operations or conceal the financial assets of sanctioned targets; technology companies that allow for future production and innovation of weaponized-equipment; and, to a lesser extent, the energy sector that continues to financially support Putin and his regime.

U.S. Sanctions Targets Related to the 2022 Invasion of Ukraine by Department

The U.S. government has strategically used sanctioning authorities and financial restrictions specific to the Departments of Treasury, State, and Commerce to maximize overall economic pressure against Moscow. (Data from U.S. Departments of the Treasury, State, and Commerce)

Elites and Oligarchs (663)

In an unprecedented effort to further isolate the Russian economy and those who financially support Putin’s invasion of Ukraine, the U.S. government has sanctioned over 600 Russian oligarchs and elites, including more than 300 members of the Russian State Duma. Through various Treasury and State Department sanctioning authorities, the U.S. government has restricted Russian and Belarusian oligarchs and select members of their family from accessing their financial assets and properties abroad, as well as restricted their ability to travel to the United States and conduct transactions in U.S. dollars. The elite class plays a major role in financing Putin’s invasion of Ukraine and targeting their wealth is intended to stymie their financial contributions, as well as increase political pressure on those closest to Putin to reconsider supporting the invasion. Additionally, the Commerce Department has imposed export controls on U.S.-origin luxury goods to Russia, Belarus, or designated Russian and Belarusian persons wherever located, deploying a measure previously only used against the pariah state of North Korea. In addition to setting its sights on the assets of Russian oligarchs, the Treasury has also targeted a number of elite- and Russian intelligence agency–connected websites and media organizations that are devoted to spreading pro-Russia disinformation.

U.S. allies have also levied their own set of sanctions and economic measures targeting Russian elites and oligarchs. For example, both the UK and EU have publicly expressed consideration to abolish “golden passports and visas” for Russian oligarchs, which grants foreign nationals a path to residency after investing a substantial amount of money. In the UK alone, London issued more than 2,500 visas to Russian citizens under this program since its launch in 2008. Since the invasion of Ukraine, London has designated over 1,000 Russian individuals and entities with 350 new sanctions issued in a single day. Some of the most notable UK-sanctioned oligarchs include Chelsea Football Club owner Roman Abramovich, who is worth more than $11 billion USD; Oleg Deripaska, who has stakes in Russia’s energy industry and whom the United States sanctioned in 2018; and Igor Ivanovich Sechin, owner of one of the world’s largest oil companies, Rosneft, and often described as “Putin’s right-hand man.” In the coming weeks, the international community will likely impose additional sanctions on Russian oligarchs and their families to add more pressure on the Russian elite to discourage Putin’s continued invasion of Ukraine and stifle their funding of the ongoing invasion.

Other allies have also taken concrete economic actions against Russian oligarchs and members of the elite class. The EU and Australia have issued financial sanctions against a wide range of Russian oligarchs and their family members, citing personal and/or financial connections to Moscow and Putin. Similarly, Italy has seized Russian-owned luxury villas and superyachts totaling roughly $150 million USD, Monaco has frozen the assets of Russian companies and individuals subject to EU sanctions, and even Switzerland has frozen assets of key Russian companies and officials, imposed travel restrictions on Russian oligarchs, and directly sanctioned Putin himself. In North America, Canada has joined U.S. allies in sanctioning Russian oligarchs, totaling 31 members of Putin’s inner circle and 355 other individuals involved in the invasion of Ukraine or related disinformation operations. In Asia, Japan has also announced plans to suspend the issuance of Japanese visas for designated individuals related to Russia’s war in Ukraine and has frozen the assets of 32 Russian and Belarusian officials connected to the Ukraine invasion, including key Putin officials and the executives of companies connected to the Russian military such as Transneft and Wagner Group.

Defense and Transportation (480)

As part of an effort to weaken military capabilities and supply chains supporting Putin’s invasion of Ukraine, Washington has intensely targeted Russian defense and transportation industries. In particular, the Commerce Department has taken a leading role in weakening Russia’s defense industry by rapidly expanding export controls on critical technologies and Entity List designations of firms supporting Russia’s defense sector. Since the invasion, Commerce has added nearly 190 new entities to its Entity List, now reaching more than 450 total Russian entities. In addition to restricting Russia’s ability to access military equipment for its defense, aerial, and maritime forces, these new rules also restrict Moscow’s capability to develop and deploy weapons of mass destruction, including chemical weapons. The Commerce Department issued similar restrictions on Belarusian entities providing defense and logistical support to the Russian military.

The U.S. government has also issued financial sanctions against defense companies manufacturing Russian military aircraft and providing shipping and logistical support to military operations, such as JSC Novosibirsk Aircraft Production Association Plant, also known as Sukhoi, and Sovcomflot. The State Department has designated 22 Russian defense-related entities responsible for crucial contributions to Russian military operations, including but not limited to: manufacturing unmanned aerial vehicles, electronic warfare systems, infantry fighting vehicles, missiles and anti-tank weapons, military frigates, and engines for bomber aircraft, helicopters, and other vehicles. These designations prohibit transactions by U.S. persons or within the United States that involve any property or interests in property of the designated entities.

Financial Infrastructure and Financial Services Sector (229)

A major target of U.S. and allied sanctions is Russia’s financial sector, including banks and other financial institutions. Since March 2022, the U.S. government has levied over 200 economic sanctions on the Russian financial services sector, including banks and the financial arms of major Russian enterprises. The sanctions levied on Russian financial institutions range in severity. To the extent that certain institutions are subject to less than full blocking sanctions, there is additional room to escalate sanctions by moving toward the full blocking of these institutions.

The Central Bank of Russia

The sanctions on the Central Bank of Russia, which prohibit U.S. persons from engaging in any transactions with the central bank, are one of the single most impactful sanctions actions. While not full blocking sanctions, these actions largely achieve the same practical effect in restricting financial access to and from the Russian market. The United States holds a relatively small percentage of Russia’s overseas central banking assets—totaling approximately 7 percent ($38 billion USD)—in part because Russia took concrete steps to move its assets away from dollar-denominated and U.S.-custodial assets as part of its national strategy to “sanctions-proof” the Russian economy. However, Moscow did not remove such assets from all G7 jurisdictions, all of which have now moved to sanction the central bank. Allied country asset freezes (in USD) include: France, $71 billion (12 percent); Japan, $58 billion (10 percent); Germany, $55 billion (9 percent); the United Kingdom, $26 billion (4 percent); Austria, $17 billion (3 percent); and Canada, $16 billion (2 percent). These joint economic measures on the central bank will significantly undercut Russia’s ability to conduct ordinary monetary policy, manage the steep decline of the ruble, or otherwise mitigate the negative effect of sanctions. Recent moves to block gold-related sanctions evasion, which include a prohibition on U.S. persons engaging in gold transactions with sanctioned entities, are likely to significantly weaken Russia’s attempts to prop up the failing ruble by further limiting Russia’s ability to utilize its central bank reserves and manage partial foreign currency earnings from continued energy revenues.

Financial Services Sector

Full blocking sanctions were imposed on Russian financial majors like VTB, Otkritie, Novikombank, PSB, Bank Rossiya, Sovcombank, and VEB. Full blocking sanctions freeze any dollar-denominated assets, entities, or properties owned (51 percent ownership or higher) by a designated entity and prohibit U.S. persons from dealing with them. Notably, Russia’s largest bank, Sberbank, was initially subjected only to correspondent banking and payable-through sanctions, restricting its access to U.S. correspondent banks that serve a critical intermediary role by enabling cross-border payment transactions between entities that do not share any official business or trading accounts with one another. Correspondent banking sanctions significantly restrict the ability to conduct licit transactions denominated in U.S. dollars. U.S. allies adopted measures to limit alternative financial channels. The decision to limit sanctions against Sberbank was likely driven by a desire to avoid direct impacts on the Russian population, given that Sberbank holds almost half of the country’s total commercial retail deposit and credit card accounts. However, following the reporting of war crimes and atrocities in Bucha, Sberbank was moved to full blocking sanctions as part of a larger U.S. sanctions package.

Other financial institutions, such as Gazprombank, the Russian Agricultural Bank, and the Credit Bank of Moscow, are subjected to debt and equity restrictions, which prevent foreign investment opportunities and money lending in U.S. dollars and constrain these institutions’ future ability to raise capital. Several major Russian enterprises involved in sophisticated financial transactions—for example, Rostelecom, Transneft, RusHydro, and Russian Railways—are also subject to debt and equity restrictions and limited to very short credit durations. Beyond these direct measures, the restriction on Russian banks means that Russian entities with existing debt that may still be legally serviced may struggle to pay their obligations.

Energy (8)

The energy industry is a major source of foreign capital for the Russian economy, bringing in nearly 40 percent of Russian government budget revenues and 60 percent of its national exports. Russian government sources estimate that extractive industries also make up approximately 60 percent of the Russian economy. The energy sector sanctions to date have focused on diminishing the long-term viability of the sector in Russia, while avoiding direct impacts on current production, and thus current exports of Russian energy to Europe. Europe currently sources nearly half of its total natural gas imports from Russia, reaching 45 percent in 2021. In already tight energy markets, cutting off Russian energy to Europe may trigger an energy crisis and recession on the continent and would likely negatively impact global energy markets as well. Outside of government-imposed sanctions, there are signs that both European and developed Asian buyers, mainly Japan and South Korea, may lean toward reducing more energy imports from Russia, such as coal.

The strategy of targeting future, rather than current, energy production dates back to 2014 and the United States’ response to Russia’s annexation of Crimea. At that time, the U.S. government issued sanctions targeting Russia’s energy sector and limiting its access to U.S. capital markets, highlighting that “these sanctions do not target or interfere with the current supply from Russia.” Similarly, in 2014, Commerce imposed export controls on equipment related to deepwater, offshore Arctic, and shale exploration projects, which were future sources of Russian supply. Under the current waves of sanctions, the allies have made deliberate efforts to insulate current energy production from the impact of sanctions, including through the creation of exemptions for energy-related transactions in all of the major bank and Russian central bank sanctions. Moreover, they explicitly left Gazprombank off the Specially Designated Nationals list, given the institution’s key role in processing energy transactions. Actions that have been taken against the energy sector have largely been limited to future production, such as the sanctions against Nord Stream 2, which was not yet operational, along with debt and equity restrictions on energy-related institutions.

The U.S. import ban, along with those by Canada, Australia, and the UK, were the first significant steps to constrain current energy production and revenues in Russia. This was implemented in the United States by a new executive order in March that bans the import of Russian oil, liquefied natural gas, and coal to the United States. It will take significantly longer for the EU to take stronger action in the energy space, given current supply relationships and infrastructure. In response to the war, the EU announced its intentions to reduce its reliance on Russian oil and gas by two-thirds before 2023 by using a mix of alternative gas sources, intensifying efforts to transition to renewables, and reducing energy demand. On March 25, Biden announced a new plan to supply Europe with liquefied natural gas from the U.S. market, along with a corresponding U.S.-EU task force, to support European efforts to gradually pull away from Russian energy imports.

Actions that have been taken against the energy sector have largely been limited to future production, such as the sanctions against Nord Stream 2, which was not yet operational, along with debt and equity restrictions on energy-related institutions.

Certain EU member states, particularly Poland and the Baltic states, support stricter EU sanctions on Russian oil and gas imports, but key nations like Germany are concerned over potential economic and political blowback, and Hungary has objected to a proposed EU ban on Russian oil imports. However, the growing evidence of human rights violations and atrocities against civilians in Ukraine may push European nations to adopt a faster timeline for energy sector sanctions. The EU took an initial step with its ban of coal imports after atrocities in Bucha were revealed, and Germany has recently announced its support for a gradual ban on Russian oil. According to reports, Berlin would support a phased approach to targeting oil rather than other options discussed at the EU, such as a price cap or payment mechanisms to withhold parts of Moscow’s revenue. This new stance marks a significant shift in traditional German policy that has stifled the EU from adopting strict economic measures targeting the Russian energy sector. However, Russian oil imports remain largely untouched by EU economic measures. As of early May, disagreements among EU member states over details surrounding an effective oil shipping ban have effectively stalled the adoption of this potentially impactful step.

Self-sanctioning by multinational energy companies is magnifying the impact of government-imposed sanctions. Major U.S., UK, and European energy companies, including British energy giants BP and Shell, the United States’ ExxonMobil, Norway’s Equinor, and France’s TotalEnergies, have independently decided to withdraw from Russia even though such exits were not required by the sanctions. The exit of ExxonMobil alone from the Russian market is valued at more than $4 billion USD. Concerns over reputational risk were likely a major factor in their withdrawal from the Russian market, along with anticipation of future sanctions actions and the difficulty of conducting normal business operations in what has become a heavily sanctioned jurisdiction despite attempts by governments to create energy sector payment channels.

The impact of the war, the sanctions, and the private sector self-sanctioning have already impacted the global energy market with oil and gas prices steadily rising in the United States and Europe. The American Automobile Association noted the largest short-term spike in gasoline prices with domestic service stations charging an average of 26 cents more per gallon in just one week and the average price of regular gas in the United States reaching $4.17, breaking the previous U.S. record of $4.11 per gallon in July 2008. The national average price in June topped $5 USD a gallon for the first time ever. In the European Union, the daily figure for imported Russian natural gas rose from roughly $210 million USD to $690 million USD from January 2022 to March 2022. Perversely, this rise in energy prices seems to be causing Russia’s energy export revenues to surge, as the effect of higher prices outweighs the volume losses in demand for the time being.

The White House has pursued diplomatic engagement with Saudi Arabia, Venezuela, and Iran to potentially negotiate an oil trade deal as part of a larger effort to boost global energy supplies. However, they are far from any final decision or deal. Additionally, a potential deal with Qatar also appears to be progressing, though Doha has little new supply to offer in the near term. Thus far, the Organization of the Petroleum Exporting Countries (OPEC) has refused to alter their production plans to help alleviate the spike in global oil prices, sticking to their plan of moderate increases in their February and March meetings, despite increasing signs of supply disruption. In terms of Washington negotiating with Tehran and Caracas, ongoing discussions over Iran’s nuclear program and concerns over human rights abuses in Venezuela will likely continue to dominate the conversation, especially domestically within the United States. On March 7, Washington reportedly sent U.S. officials to Caracas to discuss energy security and detained U.S. citizens, which likely involved conversations regarding the potential easing of sanctions against Venezuela in return for oil supplies to Europe. Any delisting of key financers of Caracas, including the oil industry, will likely face heavy political resistance from Congress and members of the human rights community involved in the Venezuelan diaspora.

Technology (32)

The United States has expanded financial sanctions on Russia’s technology sector ranging from state-sponsored tech companies to communications and financial technology firms backed by Russian banks. These sanctions will impact Russia’s ability to launch sustained, advanced military operations in Ukraine as they target key suppliers of technology essential to the Russian military, such as microprocessors and semiconductors. On May 8, Commerce imposed additional export controls on Russia and Belarus that not only enhanced restrictive measures on the trade of luxury goods to and from these countries, but also imposed additional license requirements for exports, reexports, and in-country transfers to or within Russia of any items identified under certain Schedule B or Harmonized Tariff Schedule 6 codes. This regulatory expansion is significant in terms of further isolating Russia from global trade, but it will rely heavily on enforcement abroad, which varies country by country. Additionally, the export controls applied across the Russian economy will impact the technology sector, particularly the supply of semiconductors and information and communication technologies. For example, U.S. Secretary of Commerce Gina Raimondo told the Senate on May 11 that Russian forces have resorted to using semiconductors often found in household kitchen appliances for their military equipment, likely due to sanctions and export controls choking Russia’s access to U.S. technology exports.

Global Reach of U.S. Sanctioning Actions

The U.S. government has issued more than 70 percent of all post-invasion sanctions pursuant to the 2021 Biden executive order RUSSIA-EO14024. Of the 1,045 designations pursuant to this sanctions authority, 1,010 target Russian persons and/or entities, while the remaining sanctions target foreign persons and entities who are offering financial, logistical, and/or material support benefiting Russia’s invasion of Ukraine. These individuals are located in the United Kingdom (3), Kazakhstan (3), Malta (3), Cyprus (3), Moldova (3), Croatia (2), China (1), Angola (1), Ukraine (1), Estonia (1), Armenia (1), Azerbaijan (1), Cayman Islands (1), France (1), Georgia (1), Germany (1), Singapore (1), Spain (1), Vietnam (1), New Zealand (1), Bermuda (1), and the Netherlands (1).

Global Distribution of U.S. Sanctions Pursuant to RUSSIA-EO14024 Post-Invasion

While over 95 percent of U.S. sanctions pursuant to RUSSIA-EO14024 target persons and entities in Russia, the Biden administration has also used this authority to target third-party actors abroad that offer financial, logistical, and/or material support to Russia that can be used to continue its invasion of Ukraine. (OFAC Data from February 22, 2022–April 20, 2022)

Enforcement of Russia Sanctions and Possible Facilitators for Evasion

Having levied a significant set of coordinated sanctions, the United States and allies are moving toward enforcement actions to ensure that routes for sanctions evasion are shut, including the potential use of cryptocurrency. Most recently, on April 20, OFAC designated 40 entities and 29 individuals pursuant to executive order RUSSIA-EO14024 for their attempts to help Russia evade U.S. and global economic sanctions. Washington and its allies are also putting diplomatic pressure on countries that are not participating in the sanctions, such as China, India, the Middle East, and others in the “messy middle,” to outline the consequences for any actor that assists Russia in violation of the sanctions. Within the U.S. government, the Department of Justice announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing economic actions imposed against Moscow in response to its unprovoked invasion of Ukraine—with a notable focus on cryptocurrency-led sanctions evasions. The United States and key allies—Australia, Canada, Germany, Italy, France, Japan, the UK, and the European Commission—have established the Russian Elites, Proxies, and Oligarchs (REPO) Task Force to curb Russian elites from accessing the international financial system to help evade sanctions on behalf of Moscow. These joint actions are crucial in addressing serious concerns over Russian sanctions evasions overseas.

China

Beijing’s “comprehensive strategic partnership” with Moscow has placed China in a unique position with respect to the Russia-Ukraine war. Several weeks before the invasion, Chinese President Xi Jinping and Putin met in person, releasing a statement afterwards that claimed “friendship between [Russia and China] has no limits [and] no ‘forbidden’ areas of cooperation.” While this might seem to indicate China’s willingness to support Russian aggression against Ukraine, Beijing has largely tried to remain neutral in its statements, attempting to balance its rhetorical commitment to territorial integrity and its support for Russia’s “legitimate security concerns.” China has made statements acknowledging Ukraine’s claim to Donetsk and Luhansk on the basis of “territorial integrity,” a position which stems from China’s potential concern that a precedent of foreign countries supporting separatist movements in Ukraine could rebound poorly on China, which itself relies on similar “territorial integrity” arguments on issues relating to Taiwan, Tibet, Xinjiang, Hong Kong, and Inner Mongolia. At the same time, China claims that it is in a fundamentally similar position to Russia: a regional power interested in asserting influence in its immediate geographical neighborhood that is threatened by U.S. alliances. Because of these contradictions, China has largely focused on using this crisis to criticize the United States, particularly its use of economic sanctions, and argue that NATO enlargement played a major role in provoking Russia rather than addressing the root cause issue of the Ukrainian invasion—Putin’s revisionist agenda and aggression.

China remains a major potential obstacle to isolating Russia from the global financial system and economy. Beijing has refused to join international sanctions against Moscow, and Russian banks are considering allowing their customers to transfer funds in their savings accounts over to the Chinese yuan—one of the few currencies not subject to sanctions-related prohibitions. Some Russian banks have also begun switching to China’s UnionPay system to conduct financial transactions as they can no longer utilize the Visa or Mastercard payment networks. In the past, the Chinese government has helped countries such as Iran, Venezuela, and North Korea evade U.S. and U.N. sanctions programs by establishing limited alternative financial outlets for these countries to use. Similar Chinese behavior may emerge for Russia, either in bilateral China-Russia trade or to facilitate trade between Russia and other countries. However, the Chinese yuan accounts for only around 2.5 percent of global foreign exchange reserves, meaning Beijing is currently unable to position its currency as an alternative to the U.S. dollar. This will make it difficult for China, which conducts its trade mostly in U.S. dollars and euros, to provide a lucrative alternative for Russia in the short term. Despite this, the Russian finance ministry has announced plans to utilize the yuan holdings in Russia’s foreign exchange reserves.

China remains a major potential obstacle to isolating Russia from the global financial system and economy. Beijing has refused to join international sanctions against Moscow, and Russian banks are considering allowing their customers to transfer funds in their savings accounts over to the Chinese yuan—one of the few currencies not subject to sanctions-related prohibitions.

Thus far, Chinese banks have indicated movement toward compliance with sanctions, likely concerned over U.S. secondary sanctions. Notably, the Chinese-run Asian Infrastructure Investment Bank has recently stated that “in the best interests of the Bank, Management has decided that all activities relating to Russia and Belarus are on hold and under review.” Beijing has also made no indication that it will allow the Central Bank of Russia to liquidate any of the nearly $140 billion USD in Chinese bonds it holds. However, China’s government has aggressively spoken out against the international sanctions effort, and U.S. allies have publicly expressed belief that China is considering supplying Russia with military aid. A call between Biden and Xi on March 18 failed to fully resolve these concerns and a subsequent EU-China Summit was equally frosty. Secondary sanctions may ultimately be a necessary response to any Chinese attempt to undercut the allied sanctions. Earlier, U.S. Secretary of Commerce Raimondo had issued a similar warning related to harsh technology sanctions, likely Entity List designations, if China backfilled technology to Russia in violation of the allied export controls. Given the overwhelming support for Russia sanctions on the part of China’s largest trading partners—the United States, the EU, Japan, and South Korea—Beijing is likely to face significant political and economic costs if it decides to aid Moscow.

India

India is a second notable economic power that has proved reluctant to join the U.S. and allied sanctions efforts against Russia, in part due to its historically close ties to Moscow and heavy reliance on Russian military equipment. Currently, the Indian government appears intent on maintaining its trade and military ties with Russia and is continuing to buy Russian oil while also exploring a way to create a direct rupee-to-ruble trade system, which was in place during the Cold War. This is likely an attempt to avoid dollar-denominated transactions that could trigger U.S. sanctions. India has also been among the few countries that publicly announced it would purchase discounted Russian crude for delivery later this spring, though New Delhi may face challenges securing insurance and shipping. India claims its reliance on Russian-origin military gear—nearly 85 percent of current Indian military equipment—compels it to retain good relations with Russia.

The United States has been calibrated in its public pressure on India. Assistant Secretary of State for South and Central Asian Affairs Donald Lu told lawmakers at a Senate Foreign Relations Committee hearing in early March that the United States was weighing whether to apply or waive sanctions on India under CAATSA due to its recent purchase of the Russian-developed S-400 air defense system. India also notably abstained from several votes in the U.N. Security Council and the U.N. General Assembly condemning Russia’s invasion of Ukraine, despite earlier appeals by India urging the Russian government to abide by international law. However, an unexpected virtual meeting between Biden and Indian Prime Minister Narendra Modi during 2+2 meetings in April reaffirmed the U.S.-India partnership, despite differences over Russia. This means that while Russia is a probable point of contention between Washington and New Delhi, the two countries’ divergent positions will likely not disrupt their strategic partnership.

The Middle East

Several Gulf states—Kuwait, Qatar, the United Arab Emirates (UAE), and Saudi Arabia—have also been reluctant to join global sanctions against Russia and have resisted calls to increase oil production to drive down global energy prices, despite signaling long-term interest in assisting Europe with a potential energy deficit. There are also specific concerns that the UAE, which has long served as a safe haven for Russian oligarchs, could become a nexus of sanctions evasion activities. This comes despite a broader increase in coordination with the United States on counterterrorism and illicit finance in areas of regional interest. It will likely require heavy international political and economic pressure on Gulf states to push regional authorities to crack down on Russian oligarchs purchasing properties and hiding their wealth within their jurisdictions.

Equally concerning, Israel has reportedly rejected requests from Ukraine and Estonia to purchase and use Pegasus—a powerful cyber spyware tool subject to U.S. export control restrictions—for fear of damaging Israel’s relationship with the Kremlin. While not under military siege, Estonia shares Ukraine’s experience in suffering consistent Russian cyberattacks and other destabilizing intimidation tactics. Israel’s refusal to offer this software to Ukraine in fear of Russian retaliation is detrimental to countering Russian aggression in Ukraine and aiding Ukraine protect its sovereignty.

Cryptocurrency

Russian actors will likely attempt to exploit financial technology, namely cryptocurrency, for economic cushioning against growing financial sanctions, but these technologies cannot save the Russian economy from decline. While North Korea, a significantly smaller and much more isolated economy, enjoys relative success in supporting its regime under heavy economic sanctions through exploiting and stealing cryptocurrency, the scale of laundered cryptocurrency needed to support Russia—the 11th largest economy in the world—would be exponentially larger. The Central Bank of Russia would first need to alter its previous stance arguing for a full ban on cryptocurrencies and then procure at least $400 billion USD worth of cryptocurrency to counteract current financial sanctions levied against it, a number greater than the total market cap of all but two forms of cryptocurrency. The Central Bank of Russia has taken limited measures since the invasion of Ukraine to license digital assets for certain Russian banks subject to sanctions, such as Sberbank, but not at the scale necessary for cryptocurrency to holistically undermine the effect of the sanctions.

Certain technical aspects of cryptocurrency may enable sanctions enforcement efforts. Cryptocurrency transactions exist on public, digital, and immutable ledgers duplicated and distributed across a network of computer systems. This allows virtually anyone to view all cryptocurrency transactions occurring on a specific blockchain. The U.S. government, financial regulators, and private blockchain analytics companies are tracking the potential for sudden mass movements of cryptocurrency on blockchain ledgers, and the U.S. Departments of Justice and the Treasury are well-equipped to freeze and seize illicit Russia-related crypto transactions that may involve sanctions evasion. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the European Central Bank both issued a warning to financial institutions about risks associated with Russian sanctions evasion efforts, including through the use of convertible virtual currencies (CVCs).

The United States and allies have already taken specific enforcement actions in the cryptocurrency space. In addition to the first-ever sanctions on two cryptocurrency exchanges in 2021, based in Latvia and Russia, respectively, the U.S. government recently collaborated with the Estonian government to designate another cryptocurrency exchange called Garantex, which facilitated over $100 million in transactions associated with illicit darknet markets. Additionally, U.S. and German law enforcement successfully seized and shutdown the world’s largest and longest-running darknet market operated within Russia, the Hydra Market, which accounted for an estimated 80 percent of all darknet market–related cryptocurrency transactions in 2021. Lastly, on April 20, OFAC issued its the first-ever designation on a virtual currency mining company, Bitriver AG, which helped Russia monetize its natural resources through mining and selling virtual currency. Washington has demonstrated a continued whole-of-government approach to harness the unique expertise and punitive powers of each relevant U.S. government agency to restrict sanctions evasions activity benefiting Moscow.

At the same time, other vulnerabilities in the cryptocurrency industry exist that may enable some sanctions evasion efforts. Some cryptocurrency exchanges, including those operating in foreign jurisdictions with weak regulatory oversight, lack sufficient compliance protocols. Affluent illicit actors, such as Russian oligarchs, tend to store a large portion of their financial assets, properties, and real estate abroad. Traditionally, Russian elites have used the UAE and other Gulf States as a safe haven for their financial assets; cryptocurrency is no different. Efforts from the United States, EU, and others to tighten regulation are likely to aim to reduce these loopholes and shutter dodgy exchanges.

Methodology

Sanctions designations often overlap with several different sanctioning authorities, including country-specific and thematic sanctions programs. In the case where a single designation is pursuant to multiple sanctioning authorities, the designation was counted once within the total designation number but attributed to each pursuant sanctioning authority. For example, if the Treasury designated Person X pursuant to UKRAINE-E013662 and CYBER2, then that single designation was recorded once for the total designation of U.S. sanctions but contributed to both the UKRAINE-E013662 and CYBER2 designation numbers. All cost-related statements are calculated in USD, when appropriate.

All Treasury sanctions designations were drawn from the following OFAC sanctions programs: RUSSIA-EO14024, UKRAINE-E013662, ELECTION-EO13848, CAATSA-RUSSIA, NPWMD, and CYBER2. All information regarding additional sanctions, export controls, and other economic measures from the Departments of Commerce and State were drawn from public government sources: Federal Register notices, press releases, Commerce’s Entity List, and the Bureau of Industry and Security website.

Acknowledgments

The authors would like to acknowledge the CNAS Communications and Publications Teams for their support, design, and editing. The authors would also like to thank CNAS Adjunct Senior Fellows Rachel Ziemba, Elina Ribakova, and Alex Zerden; CNAS Program Directors Andrea Kendall-Taylor and Lisa Curtis; CNAS Fellow Jacob Stokes; and CNAS Research Assistant Nicholas Lokker for their review of this report. This report was made possible with general support to CNAS.

As a research and policy institution committed to the highest standards of organizational, intellectual, and personal integrity, CNAS maintains strict intellectual independence and sole editorial direction and control over its ideas, projects, publications, events, and other research activities. CNAS does not take institutional positions on policy issues and the content of CNAS publications reflects the views of their authors alone. In keeping with its mission and values, CNAS does not engage in lobbying activity and complies fully with all applicable federal, state, and local laws. CNAS will not engage in any representational activities or advocacy on behalf of any entities or interests and, to the extent that the Center accepts funding from non-U.S. sources, its activities will be limited to bona fide scholastic, academic, and research-related activities, consistent with applicable federal law. The Center publicly acknowledges on its website annually all donors who contribute.

About the Authors

Emily Kilcrease is a Senior Fellow and Director of the Energy, Economics, and Security Program at CNAS. Her research focuses on the U.S.-China economic relationship; alignment of national security objectives and economic policy; and geoeconomic statecraft. Kilcrease previously served as a deputy assistant U.S. trade representative (USTR), overseeing the development, negotiation, and coordination of U.S. foreign investment policy. She served as the senior career staffer leading USTR’s work on the Committee on Foreign Investment in the United States (CFIUS) and coordinated USTR’s policy engagement on related national security and economic tools, including export controls and supply chain risk management. Additionally, Kilcrease served on the National Security Council (NSC) as a director for international trade, investment, and development. Prior to the NSC, she served at the Department of Commerce overseeing the department’s CFIUS work. She began her government service at the Department of Interior working on trade and environment policy. Kilcrease received her MA in international relations, with a concentration in international development and economics, from the Johns Hopkins School of Advanced International Studies. She received her BA in government from Georgetown University.

Jason Bartlett is a Research Associate for the Energy, Economics, and Security Program at the Center for a New American Security (CNAS). He analyzes developments and trends in sanctions policy and evasion tactics, proliferation finance, and cyber-enabled financial crime with a regional focus on North Korea, Iran, and Venezuela. He also researches the U.S.-ROK alliance and international security issues, such as North Korean military provocations and cybercrime. Lastly, Bartlett leads research and writing for the CNAS Sanctions by the Numbers series and is a contributing author for The Diplomat. Previously Bartlett worked at several think tanks in Washington, D.C., and Seoul, South Korea, and he provided years of linguistic and administrative assistance to human rights groups resettling North Korean defectors in South Korea and the United States. Fluent in Korean and Spanish, Bartlett graduated from the Korean Language Institute (KLI) at Yonsei University in Seoul, and also holds an MA in Asian Studies from the School of Foreign Service and a graduate certificate in Refugee and Humanitarian Emergencies from Georgetown University, as well as a BS in Spanish and a BA in International Studies from SUNY Oneonta.

Mason Wong is the Joseph S. Nye, Jr. Intern for the Energy, Economics, and Security Program at the Center for a New American Security (CNAS). Before joining CNAS, Mason worked for Democratic campaigns in Illinois, New York, and California. He has also worked as a freelance writer for various Hong Kong news outlets. Wong is a current graduate student in the Asian Studies Program at Georgetown University's Walsh School of Foreign Service. He received his B.A. in Political Science and English from Williams College. He is fluent in Cantonese and proficient in Mandarin.

Learn More

The CNAS Sanctions by the Numbers series offers comprehensive analysis and graphical visualization of major patterns, changes, and developments in U.S. sanctions policy and economic statecraft. Members of the CNAS Energy, Economics, and Security Program collect and analyze data from publicly available government sources, such as the Treasury Department’s Office of Foreign Assets Control.

Authors

  • Emily Kilcrease

    Senior Fellow and Director, Energy, Economics and Security Program

    Emily Kilcrease is a Senior Fellow and Director of the Energy, Economics, and Security Program at CNAS. Her research focuses on the U.S.-China economic relationship; alignment...

  • Jason Bartlett

    Research Associate, Energy, Economics, and Security Program

    Jason Bartlett is a Research Associate for the Energy, Economics, and Security Program at CNAS. He analyzes developments and trends in sanctions policy and evasion tactics, pr...

  • Mason Wong

    Intern, Energy, Economics, and Security Program

    Mason Wong is the Joseph S. Nye, Jr. Intern for the Energy, Economics, and Security Program at the Center for a New American Security (CNAS).Before joining CNAS, Mason worked ...

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