Russia has a habit of falling victim to economic sanctions for behaviour deemed to be hostile to the rest of the world. In 1948 the allied powers clamped a broad range of restrictions on doing business with the Russia-led Soviet Union as it erected the Iron Curtain around eastern European nations. The toll on ordinary Russians was severe, but it would be half a century before they were lifted.
Fast forward nearly 65 years. Within days of Russian troops seizing Crimea, a highly coordinated round of US-led sanctions is imposed by western nations that banned named officials from travel. Under pressure, a number of former Iron-Curtain countries including Albania and Montenegro throw in their hat with the west. In a defiant show of solidarity the Russian Duma (parliament) votes that bans be imposed on all its members.
As unrest spreads across the Crimea border, sanctions get more personal. The US slams a ban on any business transaction with Igor Sechin, right-hand man of president Vladimir Putin, among six others in his inner circle. Seventeen Russian companies in the oil, banking and defence industries are also explicitly put out of bounds for western businesspeople. Backing the US, the EU insists the measures are “not punitive” but intended “to bring about a change in policy or activity”.
Early August 2014
Claiming that Russia is being victimised, the Putin administration fires back with a series of tit-for-tat sanctions of its own. “All the sanctions target my friends, people who are close to me personally,” complains the Russian president. In one move that is likely to hurt only its own people, the Kremlin slams a total ban on food imports from the EU, US and other countries. The Kremlin draws up its own black list, which includes US senator John McCain who consistently describes Putin as a “KGB colonel”.
Late August 2014
The heat on Russia intensifies. Japan freezes a range of joint projects. The US adds more companies and individuals to the black list. Norway virtually shuts down all business with the invading state including all supplies to its vast oil sector. Even historically neutral Switzerland joins the queue by practically banning deals with Russia-owned banks. Italy seizes $40m worth of villas owned by Putin’s judo sparring partner, Arkady Rotenberg.
The noose tightens as the US blacklists some of Russia’s biggest companies – financial giant Sberbank, arms manufacturer Rostec and four giant oil companies including Gazprom and Rosneft, all closely linked to the Kremlin. All the individuals on the black list are old friends of Putin. American author Karen Dawisha reveals in her book Putin’s Kleptocracy that 110 president-linked billionaires control a staggering 35 percent of the country’s entire wealth.
Early October 2014
Barack Obama is getting frustrated with having to kick other nations into action. Claiming America is in the forefront of sanctions, vice president Joe Biden says the president has “ofttimes almost had to embarrass Europe to stand up and take economic hits to impose costs [on Russia]”. The remark is not welcomed in Germany, the EU’s biggest exporter to Russia.
Late October 2014
A wide array of Russian projects with the rest of the world are now on the proscribed list involving many billions of dollars. But making light of the economic fall-out, Russian Prime Minister Dimitry Medvedev says: “If some of our projects with Europe, America or others are put on ice, we logically move them to other destinations.” Ominously, the Duma is considering a bill that will allow the Kremlin to seize foreign assets such as automotive plants to compensate the victims of sanctions. Nobody knows how this stand-off will end but more and more commentators believe Putin is taking Russia to the brink.