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Eddie Fishman Profile picture
@edwardfishman
Mar 29, 2022 • 6 tweets • 2 min read • Read on X
Sanctions against Russia have been unprecedented in speed, the scale of targets, and international cooperation.

But they are NOT comprehensive. They remain a 7/10 or 8/10 in intensity, not a 10/10.

A few myths that require correcting (🧵):
(1) Not all Russian banks have been cut off from SWIFT. In fact, the EU has cut off just 7 Russian banks from SWIFT. Of the 5 largest Russian banks, just one (VTB) is banned from SWIFT. Sberbank, which is by far Russia's largest bank, retains access to SWIFT. Image
(2) No, "self-sanctioning" has not devastated Russia's oil sales. Russian oil is still finding buyers. To truly curb Russia's oil sales, Europe will need to reduce its own imports, and the US & EU will need to launch a global secondary sanctions campaign.
(3) It is only partially true that the effects of sanctions "worsen over time." Yes, sanctions will curtail Russia's economic & technological development. But sanctions-induced financial panic is already abating. Keeping up pressure requires ⬆️ sanctions.
(4) It is misleading to call Russia the "world's most-sanctioned country." Tallying up individual targets is meaningless. The right question is: How comprehensive are restrictions? Iran and North Korea remain far more economically isolated than Russia is. washingtonpost.com/world/2022/03/…
(5) Don't get me wrong: the sanctions campaign has been impressive. The US and Europe have shown remarkable solidarity and resolve.

But now is not the time to rest on our laurels. Ukrainians remain under heavy fire. The West needs to step up the pressure. /end

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More from @edwardfishman

Eddie Fishman Profile picture
Sep 26, 2023
I've been taking a break from commenting on current events as I finish my book. But I've been asked a lot about reports that Russia is now shipping oil without Western services and thus skirting the price cap, so I'm making an exception.

My thoughts (🧵):
ft.com/content/cad37c…
(1) Does this mean the price cap is faltering? In short, yes.

It was always clear that Russia would eventually be able to ship most (if not all) of its oil without Western services. The USG seemed to think it would take a long time. But it seems to be happening quickly.
(2) Does this mean the price cap is broken beyond repair? No.

From the start, the USG designed the price cap to be relatively light-touch — Washington was more worried about overcompliance than undercompliance, as I described here. energypolicy.columbia.edu/publications/w…
Read 11 tweets
Eddie Fishman Profile picture
Feb 23, 2023
As we approach the one-year mark of Putin's brutal attempt to conquer Ukraine, how are sanctions working? What should the US and its allies do on sanctions in the year ahead?

A quick 🧵on my new essay in @ForeignAffairs:
foreignaffairs.com/ukraine/tool-a…
(2) Russia's economy has been more resilient than expected. But the outlook is bleak. By cutting off Russia from foreign technology + investment and slashing its oil revenues, sanctions are destroying the economic model Putin relies on to pursue an imperialist foreign policy.
(3) Importantly, it's not only Russia's economy that has shown resilience. Just as sanctions have not been as devastating to Russia in the short term as was originally anticipated, they have not hurt the United States or Europe as much as many feared.
Read 16 tweets
Eddie Fishman Profile picture
Nov 16, 2022
In the last few months, @USTreasury has signaled it would ramp up enforcement of secondary sanctions on foreign companies providing support to Russia's military-industrial complex.

This week, we've gotten a clearer picture of what that means. A short 🧵:
(1) First, a definition: Secondary sanctions involve the US imposing penalties on foreign firms that support targets of US sanctions—eg, if the US were to sanction a Chinese firm that provided material support to a sanctioned Russian defense company, that's a secondary sanction.
(2) In September, after Russia held sham referenda in occupied Ukrainian territories, @USTreasury said it would ramp up enforcement of secondary sanctions. Specifically, it highlighted the risk of providing support to Russia's military-industrial complex. home.treasury.gov/policy-issues/…
Read 9 tweets
Eddie Fishman Profile picture
Sep 2, 2022
Today, the G7 formally endorsed a price cap on Russian oil sales. This plan has been in the works for months. Many doubted it would get across the finish line.

Bottom line: This is a big deal. It will erode the Kremlin's most critical source of revenue: oil exports (🧵):
(1) First things first: Oil is the lifeblood of Russia's economy. In recent years, oil has accounted for 30-40% of the Kremlin budget. But sanctions have caused a 15% decline in Russia's non-oil revenues. The result is that oil is playing an increasingly essential role for Putin.
(2) To date, Western sanctions have not made a dent in Russia's oil revenues. While the US and several allies placed an embargo on Russian oil months ago, Russia has increased sales to China, India, and other countries, keeping the overall volume of its sales roughly constant.
Read 22 tweets
Eddie Fishman Profile picture
May 2, 2022
As the EU weighs sanctions against Russia's oil sales, a question looms: What to do about non-EU buyers of Russian oil?

If China and India ramp up purchases of Russian oil, it could negate the impact of EU sanctions. Thankfully, the West can do something about it (🧵):
(1) The West can require all payments for Russian oil—whether from China, India, or elsewhere—to accrue in escrow accounts outside of Russia. To enforce this requirement, the West will need to use both positive and negative incentives.
(2) On the positive side, the West can allow the funds to be used for non-sanctioned trade. For instance, China's payments for Russian oil would accrue in bank accounts in China. Russia would be able to use those funds to buy non-sanctioned goods from China.
Read 13 tweets
Eddie Fishman Profile picture
Apr 6, 2022
The US just announced a new raft of sanctions on Russia.

Bottom line: This is the biggest new round of sanctions since the Central Bank of Russia action more than a month ago. But there are still gaps that need to be closed. Quick analysis (🧵): whitehouse.gov/briefing-room/…
(1) The US imposed full-blocking sanctions on Sberbank, by far Russia's largest bank, as well as Alfa Bank, the largest private bank in Russia. Energy transactions are still carved out. But Russia's banking sector is increasingly cut off from the global financial system.
(2) The US prohibited all new investment in Russia. While most US companies have already left Russia, this ban will ensure they stay out and can't rush back in as soon as they think there's money to be made. It will also coax any laggards to leave the Russian market now.
Read 7 tweets

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