№94 Russia’s Response to Sanctions: How Western Sanctions Reshaped Political Economy in Russia
Russia’s Response to Sanctions
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Since August 2017, legislation allowing the imposition of a range of new sanctions against Russia has been passed by US lawmakers. Although not all this legislation has thus far been implemented by the president, Donald Trump, the mere threat of more draconian economic sanctions from the US created considerable uncertainty in Russia, especially after several highprofile Russian nationals were placed on the US Specially Designated Nationals (SDN) list in April of this year. Several senior offi cials and lawmakers in the US have also indicated a willingness to impose penalties on other countries that do not observe US sanctions.

To many observers, this escalation of sanctions by the US is an important development that could generate greater impact than the ‘Ukraine sanctions’, which were imposed by the US, the EU, and their allies. The ‘Ukraine sanctions’ – including the so-called sectoral sanctions that targeted Russia’s oil, defence, and financial sectors – largely failed to cause policymakers in Russia to deviate from their foreign policy course since 2014.

Understanding why the impact of sectoral sanctions was so modest can help us understand what type of impact the latest sanctions might have on Russia.