What sanctions can be imposed against Russia. Analyst opinions

Rybakova and visiting fellow at the Finnish Institute of International Affairs, specialist in sanctions Maria Shagina also do not rule out sanctions against the Bank of Russia and the freezing of its dollar assets. “Sanctions were imposed against the Central Bank of Iran,” Rybakova recalls.

The Bank of Russia was preparing for such measures: returning reserves to Russia, into gold, and actively withdrawing money from the dollar and the euro and the corresponding Western jurisdictions. By mid-2021, the share of the dollar in the gold and foreign exchange assets of the Central Bank was reduced to 16.4%, and the share of gold stored in Russia was about 22%, the Central Bank disclosed.

Shagina also believes that new sanctions may affect Russian energy companies. However, Rybakova believes that exceptions will be made for Russian hydrocarbon exports, given current oil prices in the region of $100 per barrel. and Europe’s dependence on Russian gas. The chief economist of Renaissance Capital agrees with her. Charlie Robertson: Sanctions, he said, are unlikely to affect Russian exports of oil and gas, as well as food.

However, Tatiana Evdokimova, an economist at the Vienna-based international organization Joint Vienna Institute, admits that the new sanctions may partially affect the supply of Russian hydrocarbons. In January-November 2021, the United States imported Russian oil and oil products in the amount of $17.1 billion (against $9.4 billion for the entire 2020), followed from US foreign trade data.

Analyst at Hawthorn Advisors Maximilian hess expects to impose on Russia the full package of sanctions that the United States has previously threatened in the event of an invasion. Among the potential measures discussed were further restrictions on technology exports to Russia. “We are ready to introduce innovative export control measures that will hit the strategic ambitions of Vladimir Putin,” the White House announced in late January. It was supposed to ban the export to Russia of both American technological products and a number of products manufactured by other countries that are subject to US export regulation. “This will hurt areas important to Putin, whether it be artificial intelligence or quantum computing, defense, aviation or other key sectors,” the Biden administration said. Tatyana Evdokimova agrees that restrictions on technological exports to Russia will be part of a tough Western sanctions package.

Russia is now better prepared for sanctions than it was in 2014, but this time it will be more difficult to adapt to tough sanctions, Yevdokimova said. Prime Minister Mikhail Mishustin said at a meeting of the Russian Security Council on February 21 that the government had been preparing for possible sanctions for many months. Russia has a plan to minimize the impact of financial sanctions, Finance Minister Anton Siluanov assured in February. A ban on banks’ access to dollar funding and restrictions on access to global payment systems would be “unpleasant, but not fatal,” the minister said.

In the case of blocking US sanctions against Russian banks and their assets, it is important what kind of banks they will be, Siluanov noted. “It is clear that we will ensure all deposits, all settlements with our depositors, including those in foreign currency, in these banks. For this, we have enough foreign exchange liquidity, foreign exchange reserves,” the Minister of Finance stressed.

In the event of hypothetical restrictions on the export of goods such as energy resources from Russia, the country will reorient itself to other markets, and the rise in prices that such restrictions will inevitably cause “will largely be able to compensate for them,” Siluanov also pointed out. Russia has implemented an import substitution system that limits risks to critical infrastructure (servers, payment systems) and strategic industries (weapons, semiconductors, pharmaceuticals), economists at the Vienna Institute for International Economic Studies wrote.