Russia Monitor

Russia In Shock Over New Sanctions

Written on 05/14/2018

  • The sanctions imposed on April 6 by the United States on Russian citizens and entities proved to be a much stronger shock to the Russian economy than any other previous restrictions, starting from 2014. It shows the effectiveness of both Countering America’s Adversaries Through Sanctions Act (CAATSA) as well as the so-called “Putin list”. Not only does it constitute a conscious blow aimed at the Russian economy but this is also an attempt to undermine the oligarchs’ confidence in the regime.

  • New package of restrictions against Russia was adopted by the Trump administration on 6 April and it immediately put an end to any Kremlin’s hopes for good relationship with the United States. Only a few days later, both political and psychological weight of the sanctions was reinforced by the military operation of the Western coalition in Syria, preceded by Trump’s tweet, in which he criticised Vladimir Putin and considered him to be co-responsible for the chemical attack in the Syrian city of Douma.

  • The first results of the sanctions imposed on April seem to indicate that this may be the beginning of removing Russia from the global financial system, as previously in the case of Iran. There is no doubt that such a decision will negatively affect all of Russia’s external business activity. In addition, Mr Putin will find it more difficult to compensate for the losses made by sanctioned entities, both companies and individuals. However, it will probably not change Russia’s aggressive foreign policy. The American consistency in using such tools may force Russia to change its political course, especially if the Europeans followed their example.