By Mr. Andriy Yermak, Head of the Presidential Office of Ukraine
After Russia’s invasion of eastern Ukraine and annexation of Crimea in 2014, the west implemented a set of sanctions to punish Moscow and deter further aggression. Yet senior Russian officials and their families continued to visit, attend universities and hide money in the west. The Russian “gas station” remained open for business, with its most powerful lobbyist, Gerhard Schröder, pushing for the completion of Nord Stream 2.
Eight years later, Putin invaded Ukraine again, but on a much larger scale. The earlier sanctions had not been sufficient to deter this second invasion. In response, the US, the EU, the UK, Canada and other countries have again turned to economic sanctions to try to stop Russia’s war against Ukraine, alongside providing military and humanitarian assistance. Will sanctions change the Kremlin’s calculus this time? Not unless Ukraine’s allies and partners go further and apply the tough measures that will undermine Russia’s ability to finance its war. Ukraine has already received extensive support from the US and European governments.
This may ultimately ensure that Ukraine can prevail. But victory will not come tomorrow, nor without more bloodshed and loss of life. As evidence mounts of atrocities against unarmed Ukrainian civilians, including women and children, it is clear that the world must move faster to deploy effective sanctions against Russia. First, the west must target the financing of the war with a complete embargo on Russian oil and gas, including EU trade with Russia and Belarus in petroleum products. Transport companies, especially sea operators, and insurance firms that support Russian energy exports must be sanctioned.
Only a full energy embargo will have the necessary economic and psychological impact on the Kremlin’s decision-making. For decades, the west ignored President Vladimir Putin when he broke international laws and norms, invaded neighbouring nations and clamped down on civil society. This underscored his belief that the west would forgive any transgression so long as the gas kept flowing. Only a full embargo on Russian energy will prove that this time is different — that the west will no longer tolerate Russia’s imperial ambitions, no matter the short-term domestic costs. The democratic world also must impose new, and strengthen existing, financial sanctions.
These must apply in full to all Russian banks — starting with Gazprombank — and their subsidiaries and shell companies in and outside Russia. Secondary sanctions must be imposed on entities that circumvent this regime or otherwise enable Russia’s aggression. We must expand export controls on strategically important high-tech products, especially those related to oil and gas production.
Together, new financial and energy sanctions will sharply reduce Russian revenues. But the west must also target the Russian state structure that enables the Kremlin’s malign activities and the individuals complicit in the war effort. The list of those sanctioned must be expanded to include immediate family members who hold their assets. All senior government officials above a certain rank should be added to the list, as well as leaders of state-owned enterprises, including their board members, Russian and foreign alike. While individuals are complicit in conducting Russia’s war in Ukraine, it is the system itself that must be dismantled.
High-profile westerners who choose to assist the Russian government or state-owned enterprises must also be held accountable for their actions, as should the owners of Russian propaganda resources and their employees who continue to glorify the war. Finally, the west must look at ways to use seized Russian assets for the reconstruction of Ukraine after the war. For instance, frozen Russian central bank reserve holdings, valued at hundreds of billions of dollars, will be critical to rebuilding Ukraine after this horrific war ends.
We know that citizens in countries imposing sanctions will pay an economic and social price. But this must be measured against the war’s human toll and the risks of inaction. If achieved, victory in Ukraine by those who value freedom will be recorded 50 years from now in history books throughout the world. The short-term inflationary effects of sanctions will not. By staying united and expanding sanctions so that the Kremlin is deprived of the revenues it uses to finance the war, the democratic world can deliver a decisive blow to the Russian war machine. At this critical phase of Putin’s war in Ukraine, the time to widen sanctions is now.
Important notice: This article that is re-published here was originally published on 25.5.2022 in the Financial Times by Mr. Andriy Yermak, who is the Head of the Presidential Office of Ukraine and Chief of Staff to President Volodymyr Zelensky. FinnishNews was unable to contact the Presidential Office of Ukraine that is the copyright holder of this material, but FinnishNews understands that we are permitted to use this important article so long as we attribute it to www.president.gov.ua .