Sanctions Are Effective, but Not Enough: What Restrictions Ukraine and the World Have Imposed on Russia, and Did They Yield Results?

Sanctions Are Effective, but Not Enough: What Restrictions Ukraine and the World Have Imposed on Russia, and Did They Yield Results?

Photo: / oleksii.chumachenko
8 September 2023

The sanctions imposed by the world against Russia in response to its full-scale invasion of Ukraine had noticeable consequences for its economy, even in the first year of their implementation. However, they still have not led to the collapse of the economy of the terrorist country. Partly because, at the beginning of the major war, Ukraine’s allies were implementing restrictions with excessive caution and partly because Russia’s economy proved more resilient than expected, and its government constantly sought loopholes to bypass the sanctions. About the anti-Russian sanctions introduced by the countries of the world and Ukraine, how they affected the Russian economy, and which limitations are lacking – read more in the article.

Over the course of more than a year of full-scale war, sanctions against Russia have been implemented by forty-seven countries worldwide. As it was a year ago, the leadership in imposing restrictions against the world’s largest aggressor remains with the United States, the United Kingdom, Canada, Japan, and European Union countries. The fewest sanctions, only one type each, have been imposed by seven countries: Argentina, South Korea, Serbia, Taiwan, Turkey, the Philippines, and Chile.

Figure 1. Distribution of world countries by the number of sanctions imposed on Russia

Data from the Anti-War Coalition project of the National Security and Defense Council of Ukraine, from February 24, 2022, to August 15, 2023

The remaining 148 countries of the world have not imposed any sanctions against Russia. These countries include those from the African continent, the Middle East, and Asia (except for Japan, the Philippines, and Taiwan), as well as South American countries (except for Argentina and Chile). These states continue to support the economy of the occupying country through trade, technology exchange, and other means.

Overview of sanctions against Russia in the first six months after the full-scale invasion,

Just like a year ago, the most common types of sanctions are personal sanctions against individuals and legal entities and trade restrictions with Russia. Typically, these involve:

  • Sanctions against individuals and legal entities: Various countries around the world have imposed personal sanctions on Russian officials, businesspeople, bankers, and oligarchs who finance the defense sector, as well as officials of the so-called "LPR/DPR" and military personnel fighting on Russia's side, etc. These restrictions involve freezing assets and travel bans. Restrictions on companies include freezing assets, limiting their sale, as well as restricting trade and financial transactions.
  • Restrictions on the export of goods to Russia: These restrictions apply to goods of a military or dual-use nature that Russia could use in the war against Ukraine. Some countries have limited the supply of goods to the aggressor country, which are used in the oil industry, machinery manufacturing, and high-tech production, including lithium, quantum technologies, electronic components, and more. The EU countries and Japan have also imposed restrictions on exporting luxury items to Russia.
  • Restrictions on the sale and import of Russian goods: This involves imposing additional customs tariffs on imports from Russia and Belarus, as well as refraining from purchasing certain goods from Russia, such as gas, coal, steel products, gemstones, and luxury items.
  • Suspension of investments in Russia: This entails halting foreign investments in Russia and discontinuing grant financing for research projects.
  • Restrictions on Russian media: EU countries imposed sanctions against Russian state propaganda media such as Russia Today and Sputnik. Latvia additionally blocked 18 Russian TV channels, and the United States imposed sanctions on three state-controlled networks: Channel One, Russia-1, and TRC NTV.

Figure 2. Types of sanctions by the number of world countries that have imposed them

Data from the Anti-War Coalition project of the National Security and Defense Council of Ukraine, from February 24, 2022, to August 15, 2023

The sanctions of international organizations and communities of states

The European Union is the most actively involved in sanctions. As of the end of June 2023, the EU has implemented eleven sanction packages that encompass restrictions in various areas such as trade, finance, tourism, and more.

A detailed overview of the implementation dynamics of sanctions and the essence of the limitations can be examined on the timeline below. If you hover over a date, you can see the restrictions embedded in a specific sanction package.

Figure 3. Dynamics of sanctions implementation by the European Union

Over 50 international organizations and associations have imposed sanctions against Russia or Russians. Twelve of them have excluded Russia or terminated its representation, including the Council of the Baltic Sea States, the Parliamentary Assembly of the Black Sea Economic Cooperation (PABSEC), the European Organization for Nuclear Research (CERN), the European Broadcasting Union, the Organization for Economic Cooperation and Development (OECD), the World Tourism Organization, and the European Federation of Leasing Company Associations. Russia's membership was suspended by the Financial Action Task Force (FATF), even though it has not added the terrorist country to the "blacklist" despite violating FATF standards and numerous demands from Ukraine.

Figure 4. International organizations that have joined sanctions against Russia, by sectors

Data from the Anti-War Coalition project of the National Security and Defense Council of Ukraine, from February 24, 2022, to August 15, 2023

A number of international organizations have ceased cooperation in ongoing projects and canceled new ones. The European Space Agency (ESA) discontinued its participation in joint research programs with Russia related to the Moon and the lunar environment, as well as the ExoMars mission for launching a rover to Mars. The European Aviation Safety Agency suspended the validity of all issued certificates and prohibited providing technical assistance and other services in the aviation and space industries.

A number of international educational organizations, universities, and research institutions have also terminated cooperation with Russia. Furthermore, the European Bank for Reconstruction and Development (which halted investments in Russian projects as early as 2014) and the World Bank have announced the closure of offices and the cessation of investment projects in Russia and Belarus. The London and Singapore stock exchanges have suspended trading in shares of Russian companies, and the World Federation of Exchanges has excluded the Russian stock market.

Sanctions against Russia implemented by Ukraine

The comprehensive grounds for the application of sanctions and their types are determined by the relevant Law of Ukraine. Individuals or companies whose activities undermine national security and threaten the country's sovereignty may lose the right to dispose of their Ukrainian assets. These assets can be confiscated for the benefit of the state, and the withdrawal of funds outside Ukraine can be restricted. Sanctioned companies may have their licenses and special permits revoked. In total, the law provides for over twenty types of sanctions, including a ban on participating in privatization, leasing of state property, obtaining licenses and permits from the National Bank of Ukraine, increasing the authorized capital of sanctioned companies; termination of trading agreements; prohibition of technology transfer, and more.

At the beginning of the full-scale war, the sanctioning process in Ukraine proceeded relatively slowly. Ukraine's National Security and Defense Council  (NSDC) approved the first three sanction packages on May 24, 2022. These packages included restrictions on two individuals and two companies. The implementation of sanctions accelerated from June of the previous year, and by the beginning of July of this year, President Zelensky had signed over forty sanction packages targeting over 6,700 individuals and almost 4,300 legal entities. Thus, among all countries, Ukraine has implemented the highest number of personal sanctions against individuals and companies that supported or directly participated in Russia's war against Ukraine.

Figure 5. The pace of implementation by Ukraine of sanctions against individuals and legal entities with ties to Russia

Source: The Office of the President of Ukraine, From February 24, 2022, to July 1, 2023

Work on implementing personal sanctions continues. According to the law, recommendations for restrictions on individuals and legal entities can be made by the Cabinet of Ministers, the Verkhovna Rada, the Office of the President, and the National Agency on Corruption Prevention (NACP). The latter actively conducts investigations to identify individuals and companies involved in the war on the side of Russia in Ukraine and compiles lists of individuals who should be subjected to sanctions. As of the end of July, NACP recommends imposing sanctions on over 16,000 individuals and over 3,000 legal entities.

Since February 24, 2022, the Cabinet of Ministers has approved twenty-two resolutions with recommendations for sanctions against over 1,000 individuals and 961 legal entities. Since the beginning of the full-scale war, MPs have registered eight resolutions with recommendations for sanctions against almost 4,000 individuals and 176 legal entities in the Verkhovna Rada. The National Security and Defense Council considers these recommendations and independently creates sanction lists, gradually imposing sanctions on recommended subjects. 

Figure 6. Number of entities recommended for sanctions

Source: author's calculationsfrom February 24, 2022, to August 15, 2023. Note: sanctions are already imposed on some of these individuals.

Personal sanctions are not the only measures that Ukraine has implemented since the beginning of the full-scale war. Starting from February 24 of the previous year, and as of mid-August 2023, President Zelensky signed decrees, and the Verkhovna Rada approved resolutions for two packages of sectoral sanctions. Sectoral sanctions restrict specific sectors of the economy as a whole. This includes the NSDC decision to impose sanctions against the Central Bank of Russia, and all financial institutions registered and operating within the country's territory involved in acts of terrorism (the restrictions are set for 50 years). Additionally, the NSDC decision on sectoral sanctions against Iran also lasts for 50 years. Sanctions against Iran involve a complete ban on trade, transit of resources, flights of Iranian residents to Ukraine, and investments in the country.

Personal sanctions come into effect when the President approves the decision of the NSDC by decree. Sectoral sanctions are implemented as follows: the President approves the NSDC decision, and the Verkhovna Rada must adopt the relevant resolution within 48 hours, which definitively approves these sanctions. 

The Cabinet of Ministers approved resolutions with recommendations for sectoral sanctions against Syria (in April of this year) and the defense sectors of Russia and Belarus (at the end of July of this year). However, there are currently no decisions from the National Security and Defense Council regarding implementing the Cabinet's proposals.

How Ukraine restricts Russia's influence at the legislative level

Personal sanctions against individuals and companies are not the only way to limit Russian influence in Ukraine. Since the beginning of the full-scale war, Reform Index project has identified forty-one important regulations that contain restrictions or prohibitions on the activities of entities associated with Russia in Ukraine.

The majority of these documents involve restrictions in the fields of culture, media, and publishing services, financial services, as well as the cancellation of tax benefits and the prohibition of data storage and processing by entities with ties to Russia. 

Figure 7. Distribution of laws by areas of influence restriction

Source: Reform Index, from February 24, 2022, to August 15, 2023

In particular, in the field of culture, the Verkhovna Rada has passed laws prohibiting the use of Russian occupant symbols on Ukrainian territory and the activities of pro-Russian public organizations. They have also banned the performances of Russian artists who have supported the war against Ukraine and the distribution of books and publishing products from Russia and Belarus. Furthermore, Parliament has made amendments to the "Law on Media," which prohibit coverage of the activities of the Russian government without accompanying information about Russia's status as an aggressor country.

The Verkhovna Rada has also abolished tax and customs benefits for the import of Russian scientific equipment, particularly by industrial parks. Additionally, Russian citizens are not allowed to obtain e-resident status, which among other things, permits remote business registration in Ukraine. 

Russian citizens are also prohibited from holding leadership positions in Ukrainian state-owned enterprises, obtaining licenses for subsoil use, and permits for activities in the field of nuclear energy utilization. Russian companies and citizens are prohibited from providing financial services in Ukraine (as a result of this, in July, Alfa-Bank, which belonged to Russian oligarchs, was nationalized) and conducting audit activities. Parliament has also prohibited the transfer of personal data to entities registered in Russia and states that are part of customs and military unions with Russia.

Do sanctions have any effect?

Since the beginning of the full-scale war, Ukraine's coalition of allies has been implementing sanctions cautiously and in a limited manner. It is expected that these sanctions will have a slow but long-term impact on the economy of the aggressor country. It is also important to remember that both before and after the full-scale invasion, the Russian authorities have been looking for ways to evade restrictions and adapt to international pressure. However, the effects of some sanctions can already be assessed at this point.

Since February 24, 2022, the coalition of allied countries has imposed sanctions on around 10,000 individuals responsible for the war in Ukraine. These sanctions include freezing the funds and assets of Russian businesspeople and individuals close to power. These individuals continue to earn money in Russia. Still, they cannot spend it in a significant portion of the world or dispose of their luxurious properties such as villas and yachts in these countries. For some of them, one of the few remaining options is to spend money within Russia, for example, on acquiring other companies or shares in them. The United Kingdom has gone further in isolating those in power in Russia: it suggests that sanctioned oligarchs donate their blocked funds to Ukraine. Canada also made significant steps, arresting the assets of a sanctioned oligarch, Roman Abramovich, and announcing its intention to transfer them for Ukraine's recovery. However, while assets of the Russian state or Russian oligarchs have been seized in many countries, legal and political complexities are associated with confiscating these assets or their transfer to Ukraine. Western governments are considering how to balance this with the protection of property rights.

The imposition of import restrictions and the mass departure of international companies from Russia at the beginning of the war led to logistics disruption within the country. As a result, Russians almost immediately experienced shortages of essential goods such as paper, personal hygiene products, household appliances, and more. The collapse of supply chains resulted in increased production costs, which led to rising consumer prices. However, as early as March of the previous year, Russia found a way to bypass these restrictions through parallel imports. This involves Russian companies purchasing prohibited goods from other companies that had acquired them legally. By the end of April 2023, parallel imports in Russia had exceeded $20 billion, leading to shortages in neighboring countries' warehouses. Unfortunately, using this scheme, the aggressor country managed to restore imports of consumer goods (though not all of them) and certain defense-related goods or components for them.

One of the most anticipated restrictions, the ban on importing Russian oil by sea and limiting prices on other oil and petroleum products, has already impacted Russia's revenues. According to Kyiv School of Economics analysis, Russian exports of crude oil and petroleum products fell by $15.6 billion, accounting for 40% of the total export revenues in the fourth quarter of 2022. Moreover, Russia lost the European market—now the main importers of its oil are India and China (nearly 75% of shipments in the first quarter of 2023), which can still export fuel from Russian oil to the EU. While Russia can still ship oil and petroleum products to countries that have not joined the sanctions, it is forced to sell them at a significant discount. Meanwhile, KSE Institute emphasizes the importance of monitoring compliance with the sanctions regime by Western companies to prevent the circumvention of restrictions and further reduction of price ceilings for crude oil and petroleum products.


Since the start of the full-scale war, the sanctions imposed by countries worldwide have significantly impacted Russia's economy. According to KSE Institute data, Russia's GDP officially contracted by 2.1% in 2022 (although official statistics may hide the actual state of affairs), and the budget deficit for the first five months of 2023 reached 3.41 trillion rubles or 117% of the planned target for 2023. This has compelled the government of the aggressor country to increase domestic borrowing and tap into the National Welfare Fund.

Even though the implemented sanctions are already in effect, Russia can still sustain its economy and continue its aggressive war in Ukraine. Furthermore, it constantly seeks ways to bypass restrictions, including through parallel imports and collaboration with countries that have not joined the sanctions (including China, Turkey, India, and others). Additionally, Russia still generates income from the sale of energy resources ($383.7 billion in 2022, a record since 1995), mineral fertilizers ($16.7 billion in 2022), as well as diamonds and colored metals.

Therefore, in order to enhance the sanctions pressure on Russia, Ukraine and its allied countries must not only intensify restrictions but also oversee companies' compliance with the sanctions regime.

Equally important is the ongoing effort to locate and add individuals who assist Russia and support its armed aggression to the sanctions lists. Ukraine has already passed a series of laws enabling the confiscation and sale of Russian assets to replenish the budget and at least partially cover the costs of the war. Additionally, the President has signed a law establishing an open Unified Sanctions Register containing information about all sanctioned individuals and companies. However, there are alarming "red flags" regarding personal sanctions, as some oligarchs manage to escape restrictions through legal proceedings. As of the end of July, it is known that the United Kingdom lifted sanctions on businessman Oleg Tinkov and former Deputy Chairman of Sberbank Lev Khasis.

Although Ukraine's allies have actively engaged in searching for the assets of Russians and accomplices of Russia in the war, currently, these assets do not bring any benefits to Ukraine. To make Russia and Russians pay for the damages, international partners need to develop a mechanism for transferring Russian assets to Ukraine's benefit. In November of last year, the United Nations General Assembly adopted a resolution recognizing the need to create an international mechanism for compensating Ukraine for war-related damages; however, its development is still ongoing.



The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations