A superyacht moored in Gibraltar, owned by Russia’s largest steel pipe maker, and has been detained by authorities following UK and EU sanctions.
The detention is due to Moscow’s ongoing invasion of Ukraine, which has resulted in sanctions of an unprecedented and expansive scale. Britain and other EU countries imposed sanctions on hundreds of Russians with links to Vladimir Putin last week. In theory, targeted elites should not be as exempt from harsh punishment as the population. The motivation behind the sanctions of Russian oligarchs and elites is to weaken the support structure of Putin’s regime. The Biden administration plans to work with European countries to target Russian oligarchs with sanctions that will result in the seizure of “their yachts, their luxury apartments, their private jets.” According to New York Timesthe total number of sanctioned Russian-born billionaires is now 25.
The United States has been one of the most prolific and important actors to use economic coercion. It seems that the use of sanctions will only increase, as major powers have become more willing to apply economic coercion on countries rather than resorting to military interventions since the end of the Cold War.
The Russian economy has struggled mightily due to the current economic coercion imposed by Western countries. The Russian government was denied access to $600 billion in reserves held by the Central Bank of Russia and coordinated action by Western countries further severed Russia’s ties with other major powers within the global financial system. Smaller European countries with closer ties to Russia are also affected. A large part of the Russian economy is based on the production of oil, natural gas, wheat and certain metals.
The assumption that harsh economic sanctions will provide an incentive for cooperation is not necessarily justified. It is important to ask whether these sanctions are justified and to consider the potential implications for how countries will make political decisions in the future. Will countries strive to be more isolated and less dependent on other countries by reducing trade, foreign banking and investment or will they try to become more integrated and into the global financial system? In other words, will the current sanctions imposed by the United States and EU countries encourage countries to become more interdependent and more cooperative with each other?
These kinds of questions are important to ask in the long term, but when the only other option in the minds of the population is violent war and civilian casualties for the countries imposing the sanctions, other solutions must be found and proposed before pushing for policy change. If the Russian-Ukrainian war is to continue for some time, countries imposing sanctions will likely have to rethink their approach to encourage peace.