HOW COMPLIANCE HAS COPED WITH RUSSIA SANCTIONS
To fully understand the divide between those who believe sanctions are an effective foreign policy tool and those who do not, it is instructive to reflect on a sample of news articles taken on a random day in August 2022. On the same morning, one could read in The Moscow Times that Western sanctions had “crippled” the Russian economy. Elsewhere, in Fortune, it was claimed that Russia was dodging sanctions “quite successfully”. MarketWatch, meanwhile, stated that the Russian economy was being “hammered” by sanctions, with international firms continuing to flee the country. Over at Deutsche Welle, the line was that European Union (EU) sanctions had failed to halt or even hamper Russia’s incursion in Ukraine.
What is anybody concerned with world affairs, or indeed any compliance professional, to make of these headlines? Given that speculation (and perhaps even wish fulfilment) is at play in any analysis of Russia, it is useful to reiterate the facts – we know, for instance, that many multinational firms have pulled out of Russia, and that there are swathes of individuals and entities sanctioned; most will also be aware that a host of Russian financial institutions have been purged from the SWIFT global payments system. Over 1000 individuals and entities have been sanctioned by Western countries. And most will acknowledge (though perhaps through gritted teeth) that Europe’s reliance on Russian gas means that money is still pouring into the Kremlin’s coffers – reported at almost $100bn in the war’s first 100 days.
Away from the economic and financial consequences of the invasion, there has been the very real threat of escalation, talk of no-fly zones, fears of nuclear weapon deployment, the spectre of famine due to blockaded grain shipments, alleged and proven war crimes, hundreds of thousands of refugees, aid relief, humanitarian corridors and the bombardment of Ukrainian cities and killing of civilians.
Oct-Dec 2022 Issue
International Compliance Association