Do sanctions ever work - and could they stop Russia's invasion of Ukraine?

A key feature of the international community’s response to Russia’s aggression against Ukraine has been the adoption of sanctions.

But what exactly are sanctions and how do they operate in practice?

And most importantly, are they likely to have any meaningful impact?

What are sanctions?

Sanctions are coercive measures that can be applied to diplomatic, economic and cultural relations between states. Commonly non-military in nature, they are imposed by one state against another (unilateral sanctions) or by an international organisation, such as the United Nations (collective sanctions).

Historically, measures have ranged from comprehensive sanctions to more targeted measures prohibiting trade in particular items, such as arms, timber, or diamonds.

Some sanctions have circumscribed particular activities understood to benefit a target, such as diplomatic, sporting, and cultural relations, as well as travel.

They have also targeted particular individuals and groups who pose a threat to peace and security, including political elites, rebel groups, or terrorist organisations.

How do economic sanctions operate in practice?

Economic sanctions are multidimensional. They tend to include travel bans and financial sanctions. Financial sanctions consist of targeted asset freezes and restrictions on a wide variety of financial markets and services.

Where the financial sanction is an asset freeze, it is generally prohibited to deal with the frozen funds held by a designated person or entity.

Funds are defined to include financial assets of every kind: cash, cheques, money orders, credit, debts, stocks and shares, interest, dividends or other income from or generated by assets.

The designation of targeted individuals and entities can occur on the basis of a national listing procedure (for the US see here, for the UK here, for Australia here).

Or, this designation may happen as a result of a sanctions regime adopted by an international organisation, which is then implemented by its members (for current UN sanctions regimes see here, for the EU here).

This twin-track approach is generally reflected in the sanctions practice of states which maintain “consolidated lists”.

Separate “consolidated lists” are kept for those individuals and entities listed on the basis of unilateral sanctions and those listed as a consequence of collective sanctions.

Some international best practice exists regarding sanctions implementation, such as guidance by the G7 Financial Action Task Force. But compliance will always depend on individual countries and the particular features of domestic companies.

Financial institutions, such as banks, will have in place automated procedures to filter incoming transactions before entering, and outgoing transactions before leaving their internal systems.

Are economic sanctions effective?

They can be.

The impact on listed individuals and entities can be severe, as illustrated by the internationally litigated cases of Kadi and Al Barakaat International Foundation v Council of the European Union or Nada v Switzerland (both cases in the context of financial counter-terrorism sanctions).

However, the general effectiveness of economic sanctions is uncertain, not least because it is empirically difficult to measure it.

According to Dursun Peksen, a sanctions expert at the University of Memphis, economic sanctions result in meaningful behavioural change in the targeted country about 40% of the time.

Yet, as a recent study by the US government demonstrates, establishing clear causality is impossible.

For example, a sanctioned country or individual may decide to change their behaviour for many reasons. Some of these changes may be unrelated to the sanctions.

What sanctions are now applied against Russia?

The international community has imposed a mix of economic and diplomatic sanctions, with countries acting both unilaterally and collectively.

The US and the UK have introduced unilateral sanctions targeting Russia’s two largest banks, Sberbank and VTB Bank. They have also frozen the assets and restricted travel of key Russian oligarchs. Canada and Australia have followed suit.

Germany has indicated it is abandoning the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to the country. Poland, Czech Republic, Bulgaria and Estonia have closed their airspace for Russian airlines.

As for collective sanctions, the UN Security Council will remain unable to impose any sanctions due to the veto power Russia holds as a permanent member. Indeed, Russia has already used this veto power to block a resolution condemning the invasion of Ukraine.