As Russia’s Economy Tanks, Europe Must Join Forces to Increase Sanctions Pressure

Sanctions against Russia by the United States. dollar against the ruble

The Russian Ruble has now taken the hardest hit against the US dollar in the two years, following its invasion of Ukraine, due to a mix of strain which the Russian economy has been facing, from both sanctions imposed by the West, and increasing geopolitical tensions. The latter has seen reports of Moscow going so far as to recruit North Korean and Yemeni Houthi soldiers, who have been fighting alongside its forces in some of the toughest battles seen to date. The consistent plummet in value of the Ruble, which is now trading against the US dollar at 104, exemplifies the effectiveness of the tools which the West has been deploying to undermine Moscow’s financing abilities for its war in Ukraine.

Europe has been playing a pivotal role in ensuring these sanctions create a tight noose surround Moscow neck. Most recently, Brussels proposed going so far as to sanction Chinese firms which it claims helped Moscow produce weaponry. However, there have been a series of individuals and companies across the continent that have been exposed as aiding and abetting Moscow in evading the restrictions that are in place. Indeed, instead of looking towards further sanctions, although these are also important and helpful, Europe needs to self-reflect and find ways to ensure that its strict sanctions policy is not undermined from within.

A poignant reminder of such efforts from among citizens of the European Union to undermine Western sanctions regimes can be seen in the case of Niels Troost, a sanctioned Dutch national residing in Geneva. Niels Troost was caught red-handed, illegally trading in sanctioned Russian oil while violating the price cap per barrel of $60, which was designed to place a limit on Russia’s potential energy revenue. Motivated purely by profit and caring little about the potential implications, including enabling Moscow to finance its military aggression, such actions must be met by more than simply the threat of severe financial penalty.

In the case of Niels Troost, he was of course sanctioned by the United Kingdom, although Europe did not follow suit. Why this is the case remains unclear, considering that he is a European national whose behavior severely jeopardizes not only European national security, but also economic interests. Although rumors have been heard in the corridors of Brussels that penalties for European citizens assisting Moscow in violating Russian sanctions may be increased in the immediate term, no concrete change in policy has yet been made public.

Sanctions are continuing to prove their worth as some of the most powerful tools in Europe’s arsenal however. No other alternative really exist that can have a similar tangible impact on the Russian economy and create incentives for Moscow to bring the war to an end. For example, energy revenue in Russia fell by 25% last year with national institutions such as Gazprombank facing increasing restrictions. However, in order to account for individuals and networks that are dedicated to circumventing sanctions loopholes, illicit under the surface activity must be addressed immediately.

This includes creating a European-wide monitoring and enforcement mechanism responsible for detecting and preventing the evasion of sanctions. The fact that this has yet to be created, is indeed shocking. This must include close cooperation with financial institutions, shipping companies and even customs officials across the Union that can quickly identify and address suspicious activity. Furthermore, penalties must be significantly more costly if we are to effectively deter sanctions evaders. Symbolic slaps on the wrist, must come to an end. But most importantly Europe requires international cooperation that allows for coordination across borders, the harmonizing of regulations and sharing of pertinent intelligence. Without such action creating a sense of common unity and resolve in the fight against Moscow, it will be difficult, if not impossible, to continue to uphold the principles of international law that since its inception, have defined the European Union.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The Political Anthropologist.