Home Europe A ‘swift’ and ‘unified’ sanctions slam on Russia? Not exactly.

A ‘swift’ and ‘unified’ sanctions slam on Russia? Not exactly.

by editor

President Joe Biden says the West is united like never before to punish a Russian invasion of Ukraine.

“We are ready to respond decisively to a Russian attack on Ukraine, which is very much a possibility,” said Biden in a Wednesday speech at the White House, noting that the door to diplomacy is still open. “If Russia attacks Ukraine, it will be met with overwhelming international condemnation,” he added. “The West is united and galvanized.”

Behind the scenes, however, U.S. and European officials are still hammering out the details of how hard to hit Moscow with sanctions, and when.

The ongoing talks — both transatlantic and among European states — suggest that repeated statements by Biden and his top aides that Russia will face “swift,” “severe” and “unified” consequences from Washington and its allies are overly optimistic, and that the reality will be more messy. The discussions come as Russian leader Vladimir Putin is — for the moment — sending some signals that he might back away from another invasion of Ukraine.

Few, if any, officials on either side of the Atlantic doubt that Washington, Brussels and other European capitals will punish Moscow if it reinvades its neighbor, with which it has been fighting a war since an initial invasion in 2014. Both the United States and the European Union, as well as the United Kingdom and Canada, have spent significant time preparing options for economic sanctions and other measures they can impose on Russian people and entities, including banks.

But for legal, logistical and political reasons, the sanctions packages are unlikely to fully mirror each other and not every initial package will necessarily be unveiled at the same time.

The U.S. sanctions are sure to be more severe and have more reach than what the other countries and the European Union craft. Controversially, those U.S. measures could hit entities in Europe that do business with Russia. Exactly how Russia embarks on an attack — such as whether it begins solely with cyberstrikes, energy cutoffs or an incursion into the contested Donetsk or Luhansk regions — could determine what, when and how many sanctions are triggered.

According to an EU diplomat familiar with the talks among the bloc’s member states in Brussels, a great deal still needs to be worked out. “We still haven’t reached a deal on what will be the triggers” the diplomat said, “if for example a string of cyber attacks will be considered as a trigger is something not clear yet.”

On Monday, when pressed by lawmakers in a private call as to whether certain allies, especially Germany and Poland, still needed to be pushed on sanctions, White House National Security Adviser Jake Sullivan said “They need constant coaxing — especially Germany,” according to a person familiar with the matter.

While Sullivan added that he still expects a strong multilateral response, even a glimmer of differences between the U.S. and its allies could in theory be exploited by the Kremlin, which supplies much of Europe’s energy sources and is more intertwined with European economies than that of America’s. Germany, in particular, is worried about its Nord Stream 2 energy pipeline project with Russia, but Berlin has increasingly signaled that it will abandon the project if Russia attacks Ukraine, though it won’t directly say so.

Meanwhile in Washington, U.S. senators who have been working for weeks to craft a bipartisan sanctions package are poised to abandon those efforts this week as disagreements persist over the scope and timeline of the sanctions. That includes reservations from NATO partners about the potential ripple effects of U.S. sanctions on their own economies.

Plenty of European and U.S. officials, however, say they’ve never seen more unity and better coordination on such matters among Washington and its allies as they do now.

“Considering the overall state of NATO a year ago, or even the state of the negotiations with our European partners as recently as three or four months ago, I think we’ve made enormous progress,” Senate Intelligence Chair Mark Warner (D-Va.), who attended the briefing with Sullivan on Monday, said in a brief interview.

Added Brian O’Toole, a former Treasury Department sanctions official: “I do think, ultimately, at the end of the day, the U.S. and Europe will be pointed in the same direction — that to me is what unity is. The entities that are sanctioned will not be the same, but that’s immaterial to the broader, strategic goals.”

‘We’ve learned a lot since 2014’

U.S., European and other officials have released limited details about what the penalty packages they are offering will include, but they’ve made clear that Russian banks and key industries, including Russia’s critical oil and gas sector, shouldn’t expect to be spared. Even the personal fortunes of the oligarchs that surround Russian dictator Putin and are suspected of holding much of his wealth could face crackdowns.

“If you take away his friends’ ability to bank internationally, you really start to hurt him in a personal way,” said Sen. Chris Murphy (D-Conn.), a Senate Foreign Relations Committee member.

In a recent interview with NPR, Daleep Singh, a senior official on the U.S. National Security Council, compared the current situation to 2014, when Putin first invaded Ukraine. At the time, Singh said, the U.S. imposed a limited set of sanctions that gradually escalated upward, an approach it took because “we’d never before imposed sanctions on an economy as large and complex as Russia.”

“We’ve learned a lot since 2014,” Singh said. “We know where Russia’s pressure points are. We know where we produce or supply something that Russia needs and can’t get from anywhere else. So that’s why instead of taking a gradualist approach, we’re prepared to start with sanctions at the top of our escalation ladder and stay there.”

How the United States and its allies react could depend on exactly what Russia does to Ukraine. If Russia launches cyberattacks but avoids a physical invasion, that’s likely to trigger the imposition of a different sanctions package than what would follow Russian troops crossing the border. Analysts say a hybrid attack is likely, and the situation could get especially messy if the Kremlin tries to take over the government in Kyiv using mercenaries, spies or other non-traditional forces.

The West’s reaction, some note, could go beyond just economic sanctions, including measures like visa bans or export controls.

“We’ll be ready for whichever path,” a U.S. official familiar with the issue said. “Any sort of invasion will incur the same swift response. But we have calibrated options for anything that’s not an invasion.” The official declined to go into details as to what counted as an invasion, such as whether that included unmanned drone strikes on Ukrainian targets.

Of the various governments involved, the European Union is likely to be the slowest out of the gate to respond. That’s because imposing an EU sanctions package requires unanimous approval by all 27 member states, and would require agreement that Russia has taken what the EU views as an illegal action. There’s also always the possibility that a country like Hungary, which has its own autocratic regime and sympathies for Russia, may hesitate to be too tough on the Kremlin, using a kind of veto power that all the 27 member states have in foreign policy matters.

“We’ll be ready for whichever path.”

U.S. official familiar with the issue

In 2020, for instance, tiny Cyprus for weeks held up EU efforts to impose sanctions on Belarusian officials accused of election fraud; Cyprus did so to pressure the bloc to move against Turkey in a separate dispute over its energy exploration work.

According to a second EU diplomat, the European Commission, which is coordinating the EU work on sanctions, reached out to Budapest to be sure that Hungary is on board. A Hungarian official denied the entreaty, saying that he wasn’t aware of any particular outreach from the Commission and noted that Budapest “will not oppose [sanctions] if they will be needed.”

Diplomats in Brussels talk about an almost unprecedented level of coordination with the U.S to try to synchronize sanctions.

Some former U.S. officials, however, expect a lag of a few days, at least, for the EU process to be complete in the case of Russia and Ukraine. But it’s possible that, given how much time EU leaders have had to prepare, they could move an initial package through much faster.

European Commission President Ursula Von der Leyen in a Friday discussion with Biden “reaffirmed the fact that all options were on the table and that sanctions would concern the financial and energy sectors, as well as exports of high-tech products.”

In comments that aired Tuesday on the BBC, EU foreign policy chief Josep Borrell described the penalties further. “There will be personal and direct sanctions, there will be economic sectoral sanctions affecting exports that will Russia’s economic development, and it will be financial sector sanctions, isolating Russia from the world’s financing system,” he said.

In a statement after a Tuesday call between U.K. Prime Minister Boris Johnson and von der Leyen, the British government hinted that cracks remain despite the unified veneer. Johnson “welcomed the unity of allies, but said more could be done to strengthen coordinated measures at pace,” a Downing Street spokesperson said.

Secondary to none

A constant concern for European officials is the effect that American sanctions on Russia could have on their territory.

Due to certain laws and regulations, U.S. sanctions on Russian entities automatically have a secondary effect. That means that not only are U.S. people and companies forbidden from engaging in transactions with a sanctioned Russian entity, but that the United States will also seek to fine or otherwise punish people and entities in other countries that do business with that Russian entity.

America’s powerful role in the global financial sector, especially the wide use of the U.S. dollar, is what gives such secondary sanctions bite. That being said, the United States has latitude in how much and how often to enforce the secondary sanctions. It also has flexibility in how much time it gives European companies and individuals to unravel their links with Russia.

Last week, European officials were appealing directly to U.S. lawmakers urging them to back down from a proposal that would impose secondary sanctions on Russian financial institutions, which could roil European markets. That dispute is one of many that has prevented the Senate from moving forward with a punitive sanctions regime that would be triggered in the event of an invasion.

Sen. Jim Risch of Idaho, the top Republican on the Senate Foreign Relations Committee, noted that Congress has often included waiver provisions in sanctions legislation that would give the president flexibility over the scope and timeline of the sanctions.

“Whenever there are secondary sanctions, there’s always collateral effects,” Risch said, adding, however, that when it comes to Putin, “it’s going to take something really significant to move this guy.”

Russia has taken many steps in recent years to shield its economy from Western sanctions, including reducing its reliance on the dollar and looking to China for support. It could take advantage of tensions between the U.S. and its allies over the secondary sanctions, not to mention the sequencing of the sanctions packages.

“If the West pursues a scaled, step-by-step approach, the Kremlin and central bank have greater flexibility to respond, for example through interest rates or reserves purchases,” said Julia Friedlander, a former National Security Council official with expertise on Russia and Ukraine. “They can also take advantage of sanctions ‘wind-down periods’ to shift assets around.”

Britain recently passed legislation letting the government sanction Russian individuals and businesses even if they are not directly linked to the destabilization of Ukraine. Sanctions under consideration in London could include freezing assets in the U.K.; preventing targets from engaging in transactions with anyone else in the country; or barring them from entering Britain, according to British Foreign Secretary Liz Truss.

On Tuesday, Johnson committed to introducing the long-delayed Economic Crime Bill, a measure aimed in part at making it harder for Russians to launder dirty money in London. Its provisions will include boosting transparency around real estate owned by companies registered offshore.

Johnson said his government would “peel the façade of Russian property holdings” in London “and elsewhere.”

Putin has been in power for more than two decades in Russia and intends to stay long past Biden, Johnson or other Western leaders susceptible to the whims of a voting populace. He’s likely thinking long-term about what an invasion would mean for Russia, its standing in the world, and his own prestige.

A long-term approach is what the U.S. and its allies need to prepare for when it comes to sanctions and the effect they will have not just on Russia but also the rest of the global economy, said Sen. Marco Rubio (R-Fla.), vice chair of the Senate Intelligence Committee.

“I don’t think the hard part is going to be crafting a package of sanctions that we can impose with our allies,” he said. “I think the challenge long-term is going to be sustaining them. That’s the point….And it’s difficult to sustain them particularly with how vulnerable Europe is on the energy front.”

Cristina Gallardo, Alexander Ward and David Herszenhorn contributed to this report.

Source link

Related Posts