There is still “a lot of room” to put pressure on Russia, experts say

The magnitude of the sanctions adopted against Russia by Western countries after the invasion of Ukraine it is “unprecedented”, but there is still “a lot of room” to increase them, experts told the British parliament.

“We are in uncharted territory. The use of sanctions against a country so integrated with the West is unprecedented,” said Tom Keatinge, director of financial crime and security studies at the Royal United Services Institute (RUSI) in London.

And although “the freezing of the assets of the (Russian) central bank has had a great impact”, there is still “a lot of room to increase” the sanctions, especially around measures aimed at Russian energy, he stressed at a hearing before the Treasury Committee of the British Parliament.

After several rounds of coordinated sanctions against Russia’s finances and economy, Western countries are now focusing their discussions on a possible ban on hydrocarbon imports, the main source of income for the Vladimir Putin regime.

In addition, there are “still banks that are not concerned” by the sanctions and “we know that they are not due to their need to make energy-related payments,” he added.

“If the objective is to attack the Russian economy, it is the energy sector that must be hit,” agreed Neil Shearing, an expert at Capital Economics. But the sanctions “come at a cost to the rest of the world,” he said.

“We have never used sanctions in this way against another G20 country,” said Justine Walker, head of international sanctions and risk at the association of certified anti-money laundering specialists ACAMS.

“We have only used similar sanctions against countries like Venezuela and North Korea,” he continued, stressing the risk of unintended consequences.

This expert cited the problem posed by, for example, some spontaneous retaliatory measures taken by private actors, such as the decision of the largest shipping companies to avoid Russian ports for fear of possible sanctions.

This “creates a very difficult scenario for basic products that we want to continue trading,” such as cereals, he stressed.

These precautionary “self-sanctions” by some companies have contributed to a dramatic rise in commodity prices to record highs since the Russian invasion began, especially for wheat, but also for oil and industrial metals.