Tom Keating is the founding director of the Center for Financial Crime and Security Studies at the Royal United Services Institute.
As the focus on sanctions against Russia shifts in the European Union — and among partners such as the United Kingdom and the United States — two challenges will continue to face the bloc this year, both related to implementation.
First, to ensure that the Kremlin’s ability to fund its war in Ukraine is more restricted than ever, individual member states will need to prioritize the consistent and effective enforcement of a wide range of sanctions; While the EU and its allies will also need to be more successful in encouraging third countries such as Turkey and the United Arab Emirates to implement sanctions against Russia – a mission that has so far failed and undermined allied efforts. doing.
Together nine sanctions package Under its belt, the European Commission has already delivered a large number of targets for the EU private sector to restrict.
But while some in the private sector, such as banks and hi-tech exporters, are familiar with sanctions and trade controls, and have the necessary staff and experience, others – for example luxury goods manufacturers or small and medium-sized industries – have no such proficiency and are struggling, if they are even aware of the restrictions that apply to them.
Individual member states are also struggling in a similar way. As an experienced sanctions specialist told me“There have been many previous EU sanctions regimes, but this is the first time we’ve really had to look at implementation.” And as a result, laws have had to be updated, responsibility more clearly divided between government agencies, and enforcement mechanisms and punishments intensified.
Now, as the first anniversary of Russia’s approach to a full-scale illegal invasion approaches, both the Commission and Member States need to carefully review and audit the extent to which the sanctions package to date is actually being implemented, and where Make sure challenges are identified, logged and addressed immediately.
However, much still remains to be done to give the necessary effect to restrict the financing and resources of the Kremlin’s war machine. and for this, European Sanctions and Illicit Finance Monitoring and Analysis Network is already identifying fundamental issues that need to be addressed.
from the Commission enabling the creation of an information-sharing network and the implementation of harmonization among Member States – by implementing immediately Constraint Implementation Exchange Repository, for example – driving self-awareness among individual companies and compliance with the sanctions to member states, even in the most remote areas of the EU, should be a continued focus on implementation this year. We need to move beyond the broad picture and dive into the details, ensuring that every loophole and vulnerability is addressed.
However, this sphere of effectiveness should not be extended only within the European Union. Third countries beyond the coalition of allies supporting sanctions against Russia must also be encouraged and coaxed to recognize the importance of disrupting the Kremlin’s war machine. This can be achieved by limiting the amount of money they pay to Russian Energy – oil price capAt the very least – blocking Russian banks’ access to their financial systems, or ensuring that their trade and logistics industries do not facilitate the circumvention of trade sanctions.
Therefore, to broaden the community of nations actively opposing the Kremlin’s illegal war, the EU needs to move forward with a three-pronged strategy of soft, medium and hard power.
For example, in many parts of the world – Africa in particular — Russia’s diplomatic campaign has successfully turned countries that typically rely on the West for aid and other development aid against ally sanctions. Thus, as a softer approach, the EU should first intensify diplomatic dialogue and engagement with third countries to understand why they are not supporting Ukraine, after which the bloc should be able to reverse this position. For this, different methods should be sought.
Using a “moderate” approach, the EU should support civil society and investigative organizations that publicize how pro-active activities by these countries are fueling the war in Ukraine. Countries must be presented with irrefutable evidence of the atrocities being waged by Russia, as well as their own ties to, or facilitation of, this illegal war.
However, if they still fail to support sanctions on Russia, the EU should turn to a “tough” approach, developing mechanisms that impose consequences on sovereign decisions such as the United Arab Emirates and Turkey. The country continues to be built.
Of course, the EU opposes secondary sanctions and does measures at Place To support the resilience of its economic and financial system. But the bloc is nevertheless entitled to react to these sovereign decisions with some measures of its own – and member states have informed me that they are comfortable doing so.
For example, the European Union already has country lists that require financial institutions to take better measures against jurisdictions offering increased tax evasion either money laundering Risk – A similar list could easily be drawn up showing the facility to avoid sanctions while imposing economic sanctions on countries representing high risk.
More productively, as with the oil price cap, incentives – such as preferential market access or linkages with other economic requests – could also be developed, allowing these countries to tap the potential of the Russian economy as well as businesses and Get benefits for banning. and persons sanctioned under EU restrictive measures for raising and transferring funds.
In-spite of this Threat From the Kremlin, the data coming in from Russia has begun to shed light negative impact Sanctions are affecting the country’s economy. The EU must now ensure that this pressure is sustained through increasing effectiveness of implementation by member states, as well as through expanding the circle of countries supporting Ukraine’s sovereignty and right to peaceful existence.