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91. FDI another day: Russian reliance on European investment

Author:
Marta Dominguez-Jimenez and Niclas Poitiers
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Most foreign direct investment into Russia originates in the European Union: European investors own between 55 percent and 75 percent of Russian FDI stock. This points to a Russian dependence on European investment, making the EU paramount for Russian medium-term growth. Even if we consider ‘phantom’ FDI that transits through Europe, the EU remains the primary investor in Russia. Most phantom FDI into Russia is believed to originate from Russia itself and thus is by construction not foreign.
Topic:
Economics, Energy Policy, Foreign Direct Investment, Governance, Sanctions, European Union, and Global Political Economy
Political Geography:
Russia and Europe

92. Pushing back against Russian aggression: Legislative options

Author:
Daniel Fried and Brian O'Toole
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
US President Donald J. Trump’s administration has found it challenging to maintain a consistent position with respect to Russian President Vladimir Putin’s repression at home and aggression abroad. It may again fall to Congress to attempt to counter Russia’s election interference, already ongoing in the form of disinformation; back Ukraine as its government seeks to deal with a Russian invasion; and contend with other forms of Kremlin aggression. In “Pushing Back against Russian Aggression – Legislative Options” authors Daniel Fried, the Weiser Family Distinguished Fellow at the Atlantic Council, and Brian O’Toole, a senior fellow at the Atlantic Council, evaluate two Russia sanctions bills, the Defending Elections from Threats by Establishing Redlines (DETER) and the Defending American Security Against Kremlin Aggression Act (DASKA), as tools to forestall new Russian interference in US elections. The authors walk readers through a set of sanctions escalatory measures—covering finance, energy, and the cyber sector – that both sanctions bills draw from. In sum, Fried and O’Toole conclude that DASKA’s sanctions are more measured and thus more implementable. By contrast, the authors deem DETER’s sanctions on financial institutions as simply too harsh with excessive spillover risk to US and Western financial markets to be implementable.
Topic:
Sanctions, Economy, Business, and Legislation
Political Geography:
Russia and Eurasia

93. Peace in Ukraine I: A European War

Author:
International Crisis Group
Publication Date:
04-2020
Content Type:
Special Report
Institution:
International Crisis Group
Abstract:
To help Ukraine find peace, the EU, NATO, and member states must seek new approaches to arms control discussions with Russia and European security as a whole. They should also consider a more flexible sanctions policy, such that progress in Ukraine may lead to incremental easing. What’s new? Russia’s Ukraine policy, including its military intervention, is driven both by Moscow’s goals in Ukraine itself and its longstanding desire to revise Europe’s security order. Western responses are similarly driven by both Ukraine-specific and Europe-wide interests. A sustainable peace plan must address both sets of factors. Why does it matter? Efforts to make peace in Ukraine by solving problems specific to Ukraine only will fail, because the causes of the conflict are both local and geostrategic. A truly sustainable peace should address European security as a whole to make Russia, its neighbours and the entire continent safer. What should be done? European states should engage Russia in discussions of European security, including regional and sub-regional arms limitations. They should also consider adjusting the current sanctions regime to allow for the lifting of some penalties if Russia contributes to real progress toward peace.
Topic:
NATO, War, Sanctions, European Union, and Peace
Political Geography:
Russia, Eurasia, Ukraine, and Eastern Europe

94. Sanctions and the End of Trans-Atlanticism: Iran, Russia, and the Unintended Division of the West

Author:
Rawi Abdelal and Aurélie Bros
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Sanctions have become the dominant tool of statecraft of the United States and other Western states, especially the European Union, since the end of the Cold War. But the systematic use of this instrument may produce unintended and somewhat paradoxical geopolitical consequences. The sanctions imposed on the Islamic Republic of Iran and the Russian Federation in the field of energy are particularly illustrative of this phenomenon.
Topic:
Economics, Energy Policy, Sanctions, Geopolitics, Secondary Sanctions, and Transatlantic Relations
Political Geography:
Russia, Iran, Middle East, North America, and United States of America

95. The EU's Chemical Weapons Sanctions Regime: Upholding a taboo under attack

Author:
Clara Portela and Erica Moret
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
Marking a worrying turn for international policymakers, the use of chemical weapons has increased in recent years in spite of the robust disarmament regime seeking to curb their use. In October 2018, the EU adopted a sanctions regime against the proliferation and use of chemical weapons. The 2018 sanctions regime constitutes the EU’s first coercive instrument against chemical weapons. Even though the EU had previously employed sanctions to halt nuclear proliferation, in accordance with its 2003 Strategy against the proliferation of weapons of mass destruction (WMDs), it had never applied sanctions to chemical weapons activities. Also, previous EU non-proliferation sanctions had taken place against the background of a pre-existing mandate agreed by the United Nations Security Council (UNSC). Both Pyongyang and Tehran had been under UN sanctions before Brussels enacted its own restrictions. By contrast, the EU sanctions regime against chemical weapons is not based on a UNSC mandate. Finally, the sanctions regime takes the form of a ‘horizontal’ or thematic list, in contrast to classical sanctions regimes that address specific country crises. The chemical weapons sanctions regime was only the second thematic sanctions regime ever adopted by the EU after the UNSC-inspired 2001 terrorism list. It was the first in a series of EU autonomous horizontal regimes adopted in close sequence: a sanctions regime against cyberattacks was agreed in 2019, and another against human rights violations is currently under preparation. The sanctions regime against chemical weapons is also exceptional in that it originated in the European Council, rather than in a working group of the Council of the European Union. When the sanctions regime was first adopted, it was accompanied by a blacklist addressing two vastly different uses of chemical weapons: it combined three individuals and one entity involved in chemical attacks on civilians in the Syrian war with the two suspects in the assassination attempt on a former Russian military intelligence officer and his daughter in Salisbury in the United Kingdom. A second round of designations in January 2019 followed a similar pattern. What accounts for this unusual combination of targets? What compelled the EU to agree on this novel form of sanctions regime? And what objectives is the EU pursuing with it? The present Brief situates the EU sanctions regime in the context of the recent attacks in Syria and the UK and international efforts employed to limit the proliferation and use of chemical arsenals. It then explores why sanctions are emerging as a supplementary policy tool in tackling this shifting security challenge. A fourth section analyses the implications for the EU’s Common Foreign and Security Policy (CFSP), before the final section concludes with recommendations for further action.
Topic:
Governance, Sanctions, European Union, Disarmament, and Chemical Weapons
Political Geography:
Russia, Middle East, and North Africa

96. Price of Aggression: The Impact of Sanctions on the Russian Economy

Author:
Kazimier Dadak
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Warsaw East European Review (WEER)
Institution:
Centre for East European Studies, University of Warsaw
Abstract:
In late February of 2014, president of Ukraine, Viktor Yanukovych, a staunch ally of Russia, lost power. This event sent into motion a sequence of events that pitched Rus- sia against its neighbour and the West. Faced with the loss of influence, if not control, over Ukraine, Vladimir Putin immediately took steps that, in his mind, were to secure the interests of his country. First, in March 2014, Russia seized and annexed Crimea; soon af- terwards a Russian-inspired rebellion engulfed eastern Ukraine. These measures drastically increased Putin’s popularity at home, but made him a pa- riah abroad. Initially, the West, including the European Union, imposed diplomatic sanc- tions1. They had no effect on Russian behaviour and, in July, the West expanded punitive measures to the economy2. President Putin did not budge, and in September, the United States and the European Union increased the pressure by imposing additional sanctions on the financial sector3. As a result, Russian companies, including large banks, were effec- tively cut off from western financial markets. Past experience, such as the U.S. led sanc- tions on Iran, shows that this type of punishment is very effective and this paper illustrates that they exacted a price on the Russian economy as well.
Topic:
Economics, Sanctions, Conflict, and Rivalry
Political Geography:
Russia and Europe

97. Coming out and breaking out: The US, Iran and Europe go nuclear

Author:
Erwin van Veen
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
On the eve of the US elections, the nuclear deal (JCPOA) stands on the edge of the precipice. The US strategy of ‘maximum pressure’ has not (yet) achieved its implicit objective of 'regime change' but tanked Iran’s economy, caused its government to dig in and increased regional instability. The geopolitical consequences of US sanctions, EU prevarication and Iran’s deep presence throughout the Middle East have been equally profound. At the global level, they include nudging Iran towards China/Russia, the US alienating its European ‘partners’ and encouraging them to develop greater strategic autonomy. At the regional level, US sanctions risk creating an alternative economic regional order, ensuring Yemen remains a protracted war and making a regional security initiative more necessary, but less likely. It is not yet too late to turn the tide. The focus should now be on reducing regional tensions and especially the stress that sanctions have put on Iran’s population and government. Radical action looks more inviting when one stands against the wall, but the Middle East does not need more conflict than it already has. To do so, the EU should first support Iran with a large-scale Covid-19 humanitarian economy recovery package. As such measures are already sanctions-exempt, they will create few new tensions. An economic initiative should follow that grants preferential access to the EU’s internal market for industrial and agricultural goods from the entire Middle East (for Iran via an upgraded INSTEX). Such interventions will not resolve existing security dilemmas but can show there is an alternative to confrontation.
Topic:
Treaties and Agreements, Sanctions, Nuclear Power, Elections, and European Union
Political Geography:
Russia, China, Europe, Iran, Yemen, and United States of America

98. The Russia policy conundrum: Who blinks first?

Author:
Hugo Klijn
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
On 28 September the Netherlands’ Russia policy was debated in Parliament. This policy (updated most recently in the government’s ‘Russia letter’ of December 2019) boils down to a twin-track approach of, on the one hand, exerting pressure through EU sanctions and NATO deterrence and, on the other hand, identifying common ground dossiers and engaging in people-to-people contacts. To date, this long-standing policy has not led to satisfactory outcomes. The debate took place against the backdrop of a Clingendael opinion poll indicating that the Dutch public has different threat perceptions of Russia. Anyway, the debate was rather uneventful and lawmakers focused mostly on topical issues such as the ongoing MH17 trial, Belarus, developments around Nagorno-Karabakh and the poisoning of Alexey Navalny. It may be a source of comfort that the Netherlands is not the only country struggling with its Russia policy. The list of accusations and grievances against Russia is growing, but its leadership flatly denies all wrongdoing and does not seem much impressed by Western responses which have not resulted in a change of behaviour. Under a veneer of unity, European countries are divided on Russia and the debate often hovers between two, typically Russian, eternal questions: kto vinovat (who’s to blame) and chto delat’ (what to do).
Topic:
Foreign Policy, NATO, Sanctions, European Union, and Deterrence
Political Geography:
Russia, Eurasia, and Netherlands

99. Americans and Russians Are Mostly Disinterested and Disengaged with Each Other

Author:
Brendan Helm, Arik Burakovsky, and Lily Wojtowicz
Publication Date:
08-2019
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
The last few years have seen a substantial deterioration in relations between the United States and Russia. The international crisis over Ukraine, Russia’s interference in the 2016 US presidential election, and US sanctions against Russia have all contributed to the growing acrimony. Recent surveys conducted by the Chicago Council on Global Affairs and the Levada Analytical Center reveal that large majorities of both Russians and Americans now view their countries as rivals. But in the midst of heightened tensions between Moscow and Washington, how do regular citizens of each country view one another? A joint project conducted by the Chicago Council on Global Affairs, the Levada Analytical Center, and The Fletcher School of Law and Diplomacy at Tufts University shows that despite the perception of rivalry between their countries, Russians’ and Americans’ views on the people of the other country are more favorable. However, the survey results also show that Russians and Americans are not particularly curious about each other, they rarely follow news about one another, and the majority of each group has never met someone from the other. Nonetheless, self-reported interests from each side in arts and sciences suggest that there are non-political paths toward warmer relations.
Topic:
Bilateral Relations, Sanctions, and Public Opinion
Political Geography:
Russia, Eurasia, North America, and United States of America

100. Meeting the challenge of secondary sanctions

Author:
Ellie Geranmayeh and Manuel Lafont Rapnouil
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Secondary sanctions have become a critical challenge for Europe, due to the Trump administration’s maximalist policy on Iran and its aggressive economic statecraft. Europe’s vulnerabilities mostly result from asymmetric interdependence with the US economy, due to the size of US markets and the global role of the US dollar. In future, states will likely weaponise economic interdependence with the EU to target countries that are more important to the European economy than Iran, such as China and Russia. European countries should demonstrate that, despite their economic interdependence with the US, they control EU foreign policy. The EU and its member states should strengthen their sanctions policy, begin to build up their deterrence and resilience against secondary sanctions, and prepare to adopt asymmetric countermeasures against any country that harms European interests through secondary sanctions. They should also attempt to bolster the global role of the euro and lead a robust international dialogue on the role of sanctions.
Topic:
Foreign Policy, Sanctions, European Union, Economy, and Donald Trump
Political Geography:
Russia, China, Europe, Iran, North America, and United States of America