Sanctions continue to distort normal market relations. They increase costs and force businesses to switch to grey schemes. However, the political goals of the sanctions remain unrealised: they do not affect Russia’s foreign or domestic policy, writes Valdai Club Programme Director Ivan Timofeev.
Amid the second anniversary of the start of the Special Military Operation (SMO) in Ukraine, a number of Western countries and associations launched a new set of sanctions against Russia, as expected. In quantitative terms, the number of Russian companies and citizens subject to restrictive measures was indeed high. However, the latest wave of sanctions does not bring qualitative changes – their impact on the Russian economy and its relations with foreign partners is unlikely to be fundamental.
The most significant package of restrictive measures was introduced by the United States. More than 500 Russian citizens and organisations were included in the list of blocked entities. Financial blocking sanctions mean that the assets of these individuals in US jurisdictions are frozen. In addition, US citizens, US organisations and their subsidiaries abroad are effectively prohibited from any economic transactions with these individuals. It has become common to hit companies from several sectors of the economy at once. Among them are machine tool building and metalworking, the chemical industry, electronics, industrial automation, optics, navigation equipment production, battery production, the aerospace industry, transport and logistics, and the financial sector. However, Russian industrial and technology companies are already a typical target of US blocking sanctions. The structure of the sectoral coverage of blocking sanctions has remained virtually unchanged.