Russia Sanctions: Are They Actually Working?

The Gap Between Expectation and Reality

When the US, EU, UK, and their allies imposed sweeping sanctions on Russia in 2022 following the invasion of Ukraine, Western officials projected that Russia's economy would contract severely and force a change in Kremlin behavior. That has not happened in the ways or on the timetable predicted.

Russia's GDP contracted about 2% in 2022, then grew in 2023 and 2024 — stimulated largely by massive wartime spending. The ruble stabilized after initial collapse. Russia adapted.

This does not mean sanctions have failed entirely. It means understanding what they have and have not accomplished requires nuance.

What Sanctions Have Actually Done

Limited Russia's access to Western technology: Export controls on semiconductors, aviation parts, and advanced manufacturing components have created real operational problems for Russian industry and military production. Russian aircraft are being cannibalized for parts. Precision military components must be smuggled through third countries at increased cost.

Increased economic costs: Russia is now spending enormous amounts on the war — some estimates put defense spending at 6-7% of GDP — and is paying higher prices for everything it imports via third-country intermediaries.

Isolated Russia from Western financial infrastructure: Removal from SWIFT, freezing of central bank assets ($300 billion), and banking restrictions have forced Russia into financial arrangements with China and other countries that are less favorable.

Contributed to long-term damage: Technology transfer restrictions will compound over time as Russian industrial capacity degrades without access to Western inputs.

Why They Have Not Collapsed the Economy

Oil and gas revenues: Despite a G7 price cap, Russia continues to sell oil to China, India, Turkey, and others. Oil revenues remain substantial.

China as a lifeline: China has become Russia's largest trading partner and financial backstop, providing goods, technology (often dual-use), and financial intermediation that partially replaces Western relationships.

War economy effect: Wartime spending boosts GDP in the short term. Russia has employed millions in war production and military service, creating a stimulus that temporarily offsets sanction-related contraction.

Sanctions evasion: A network of third-country intermediaries in Turkey, UAE, Central Asia, and elsewhere helps Russia obtain restricted goods.

The Trump Effect

The Trump administration has signaled reduced enthusiasm for maintaining sanctions pressure in exchange for progress on Ukraine ceasefire negotiations. Any significant sanctions relaxation would provide Russia with significant economic relief and reduce the long-term pressure on Kremlin decision-making.

This matters because sanctions are most effective when their removal is conditional on behavioral change. Removing them prematurely undermines their deterrent value for Russia and for any future would-be aggressor.

FAQ

Have Russia sanctions ever been lifted? Some targeted sanctions from the 2014 Crimea annexation were maintained for years without being removed. Broader sanctions from 2022 remain largely in place, though there is increasing pressure to relax them as part of Ukraine peace negotiations.

Is China violating sanctions? China is not party to Western sanctions and is not legally obligated to comply with them. Chinese companies that sell restricted goods to Russia can face secondary sanctions from the US, which the Biden administration used more aggressively than Trump.

What are the $300 billion in frozen Russian assets? Central bank reserves held in Western financial institutions that were frozen after the Ukraine invasion. There are ongoing legal and political debates about whether and how they can be transferred to Ukraine as reparations.