Parallels
2:27 pm
Wed March 19, 2014

Western Sanctions On Russia Are 'A Shot Across The Bow'

Originally published on Wed March 19, 2014 5:59 pm

Russian officials were quick to mock the limited economic sanctions on Moscow announced by the U.S. and Europe this week. In response to Russia's annexation of Crimea, Western leaders have frozen the assets of a handful of government officials and also barred them from getting visas to travel to the West.

"So what if I can't get a visa to the United States?" one Russian official said. "I didn't want to go there anyway." And as for having their assets frozen, Moscow has already barred government officials from having money invested overseas, says William Pomerantz of the Woodrow Wilson Center.

"President Putin has essentially said that it's your own tough luck if you still have assets abroad and you're a government official," he says.

And yet, Pomerantz says, the sanctions announced this week will not be without some impact. "Obviously I think it's a message that is being delivered from President Obama to Putin that the U.S. and the EU can go after his innermost circles and advisers," he says.

Western officials hope these first steps will prevent further Russian actions like the move in Crimea. EU leaders meet Thursday in Brussels to consider ways of reducing dependence on Russian energy resources.

To Mark Dubowitz of the Foundation for Defense of Democracies, the sanctions announced by the U.S. and EU are best understood as the initial volley in a slowly escalating campaign to rein in Russia's ambitions.

"The administration is moving cautiously but again sending a message to Putin with a shot across the bow that he could face much more consequential economic action at a later stage if he continues his assault on Ukraine," Dubowitz says.

The West can't afford to strike Moscow too hard right now, largely because Russia provides so much oil and natural gas to Europe. But Pomerantz says it can slowly exact a toll on Putin. For instance, he says it can pick a bank with ties to Putin and bar other financial institutions from doing business with it. Eventually it can even isolate Russia from the global financial system. Pomerantz says this is what happened to Iran.

"They weren't able to convert any of their accounts into dollars, so they weren't able to gain access to U.S. dollar accounts essentially, and that is a tremendous disadvantage when dealing with international commerce, when so many transactions are in dollars," he says.

The West can also blacklist Russian companies and turn them into global pariahs. Julia Nanay of IHS Energy says Russian energy companies are trying to find new ways to extract oil and gas from the ground and they depend heavily on Western technology.

"When you're going into these Arctic developments, offshore developments in these deals, the international oil companies are helping to finance these projects," Nanay says.

But Nanay is skeptical that the West has much leverage over Moscow right now. It needs Russia's oil and gas reserves too much.

Dubowitz agrees that sanctions aren't going to alter Russia's behavior anytime soon. But he says they can make Moscow think carefully about its next moves.

"Realistically in the short term, it's going to be very difficult to reverse the occupation and takeover of Crimea. I think at this point what the West needs to do is send a clear message to Putin that he cannot go any further," Dubowitz says.

For his part, Putin insists he doesn't have any designs on the rest of Ukraine. Western leaders are hoping sanctions are one way to make sure he sticks to that position.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel.

Pro-Russian forces took control of Ukraine's naval headquarters in Crimea today. They detained the Ukrainian commander. Thousands of Ukrainian troops are stranded at other bases. There are now reports that the government in Kiev will pull those troops out of Crimea. We'll have more on that elsewhere in the program.

CORNISH: The moves follow Russian President Vladimir Putin's signature on the treaty yesterday. It declared that Crimea is now part of Russia, that was over the objections of the Ukrainian government, the U.S. and the European Union. EU leaders meet tomorrow in Brussels to consider ways of reducing dependence on Russian energy resources. They may also impose new sanctions on Moscow.

The West has already frozen assets of a handful of Russian officials and barred them from getting travel visas, as NPR's Jim Zarroli reports on the attempt to tighten the noose around the Russian economy.

JIM ZARROLI, BYLINE: Russian officials were quick to mock the limited sanctions on Moscow announced by the U.S. and Europe this week. So what if I can't get a visa to the United States, one said, I didn't want to go there anyway. And as for having their assets frozen, Moscow has already barred government officials from having money invested overseas, says William Pomerantz of the Woodrow Wilson Center.

WILLIAM POMERANTZ: President Putin has essentially said that it's your own tough luck if you still have assets abroad and you're a government official.

ZARROLI: And yet, Pomerantz says, the sanctions announced this week will not be without some impact.

POMERANTZ: Obviously I think it's a message that is being delivered from President Obama to Putin that the U.S. and the EU can go after his innermost circles and advisers.

ZARROLI: To Mark Dubowitz, of the Foundation for Defense of Democracies, the sanctions this week are best understood as the initial volley in a slowly escalating, calibrated campaign to rein in Russia's ambitions.

MARK DUBOWITZ: The administration is moving cautiously but again sending a message to Putin with a shot across the bow that he could face much more consequential economic action at a later stage if he continues his assault on Ukraine.

ZARROLI: The West can't afford to strike Moscow too hard right now, largely because Russia provides so much oil and natural gas to Europe. But William Pomerantz says it can slowly exact a toll on Putin. For instance, he says it can pick a bank with ties to Putin and bar other financial institutions from doing business with it. Eventually it can even isolate Russia from the global financial system. Pomerantz says this is what happened to Iran.

POMERANTZ: They weren't able to convert any of their accounts into dollars, so they weren't able to gain access to U.S.-dollar accounts essentially. And that is a tremendous disadvantage when dealing in international commerce, when so many transactions are in dollars.

ZARROLI: The West can also blacklist Russian companies and turn them into global pariahs. Julia Nanay, of IHS Energy, says Russian energy companies are trying to find new ways to extract oil and gas from the ground, and they depend heavily on Western technology.

JULIA NANAY: When you're going into these Arctic developments, offshore developments in these deals, the international oil companies are helping to finance these projects, as well.

ZARROLI: But Nanay is skeptical that the West has much leverage over Moscow right now. It needs Russia's oil and gas reserves too much. Mark Dubowitz, of the Foundation of Defense of Democracies, agrees that sanctions aren't going to alter Russia's behavior anytime soon. But he says they can make Moscow think carefully about its next moves.

DUBOWITZ: Realistically in the short-term, it's going to be very difficult to reverse the occupation and takeover of Crimea. I think at this point what the West needs to do is send a clear message to Putin that he cannot go any further.

ZARROLI: For his part, Putin insists he doesn't have any designs on the rest of Ukraine. Western leaders are hoping sanctions are one way to make sure he keeps his promise.

Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.