Will the Kremlin Buckle Under the Pressure of International Sanctions?

1st of March, 2022. International News. Ukraine/Russia

As Putin sends his military to humble the Ukrainians into the dust, World Powers are inflicting crippling sanctions on Russia aimed at breaking the Russian war machine and bringing the Russian economy to its knees. But the Russian president says he is confident he can circumvent these sanctions.

Before we begin to speculate whether Russia might be able to stand against these self-inflicted curses, let’s take a brief look at the sanctions which the European Union, the United States, and several other conglomerates are imposing on Russia.

Disconnection from the SWIFT Banking System

Described as a “financial nuclear attack,” disconnecting selected Russian banks from the SWIFT messaging system cuts them off from the international financial system and makes it extremely difficult for Russia to import and export. It will also make it difficult for individual Russian citizens to send and receive money. In 2012, for example, when, under the pressure of the American government, SWIFT banned Iran from its payment system, Iran lost nearly half of its oil export revenues and about 30% of foreign trade.

Travel Ban

The European Union has banned all flights to and from Russia – even private jets. A growing number of countries have followed suit and banned Russian airlines from entering their airspace. These include: Albania, Andorra, Austria, Belarus, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, France, Finland, Germany, Greece, Hungary, Iceland, Ireland, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Netherlands, North Macedonia, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Spain, Switzerland, the UK, and Ukraine.

Freezing Assets of Russian Banks

Freezing the assets of Russian banks will limit its ability to access its overseas reserves. The measures taken against Russian financial institutions are intended to cause a big fall in the country’s currency, the Ruble, and trigger a financial crisis.

The UK, for example, has announced that it will freeze the assets of ALL major Russian banks and exclude them from the UK financial system.

Suspending the “Golden Passport” Program

The Golden Passport or “golden visa” program allows rich people to become citizens of other countries through investment. The EU and UK will now indefinitely suspend this program for all Russians.

Freezing the Assets of Sanctioned Individuals and Companies

Australia, among other nations, has imposed sanctions on wealthy Russians and over 300 Russian parliamentarians who voted to authorize sending Russian troops into Ukraine. Meanwhile, the EU, UK, and US have launched a transatlantic task force to identify and freeze the assets of sanctioned individuals and companies. While the United States President, Joe Biden, has said that he is still “seriously considering” sanctioning the Russian president, both the UK and the EU said they planned to sanction Russian President Vladimir Putin and foreign minister Sergei Lavrov.

Cutting Off Exports to Russia

Russia depends largely on imports from other countries, especially in the area of technology. Sanctions against Russia include the cutting off of exports to Russia, thereby hindering progress in many areas which can in turn have a rippling effect. The European Union, for example, announced that it will ban the sale of aircraft and equipment to Russian airlines, limiting Russia’s access to high tech such as semi-conductors and software, and ban the export of materials Russia uses for its oil refineries.

The financial instability has already caused Russians to line up at banks to withdraw their savings. The devaluation of the Ruble caused millions of Russians to lose a huge chunk of their net worth.

While Putin appears confident he can brave this storm of sanctions, experts predict that he won’t be able to finance the ongoing war as the consequences take form – forcing a ceasefire and retreat from Ukraine. Nevertheless, the Russian president continues to threaten nuclear retaliation if the west interferes in his business. In the middle of ongoing peace talks at the Belarus border, Putin pulled out his nuclear arsenal, and told the West, “don’t come any closer or else….”

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