Multipolarity and Connectivity
Is It Possible to Predict Sanctions for 2024? Yes, Quite Easily

Apparently, the first concentrated “volley” to implement these measures will be made by February 24, 2024. The authorities of the United States and other Western countries will try to “mark” the start date of the Special Military Operation with the most noticeable political steps, including sanctions. The Russian authorities, for their part, are also working on response measures, writes Valdai Club Programme Director Ivan Timofeev. 

What will the sanctions policy against Russia be in 2024? Is it possible to predict the priorities of such a policy? Yes, it is quite easy. Key decisions on sanctions in 2024 are already embedded in current political decisions. We will see the further expansion of blocking and trade sanctions, as well as the development of mechanisms for the confiscation of Russian assets. More importantly, we will see systematic attempts to force businesses from third countries to refuse to cooperate with Russia, especially in the field of industrial supplies and technological cooperation. These are the three areas, which allow us to deduce the base-case scenario of anti-Russian sanctions in 2024. Let us consider them in detail.

The expansion of blocking sanctions is a routine process that ushers in each new wave of restrictive measures against Russia. More and more Russian individuals and legal entities are included in the lists of blocked persons. Their assets in the jurisdiction of the countries initiating the sanctions are frozen, and transactions with them are prohibited. Thus, the European Union has currently blocked 335 legal entities and 1,645 individuals in connection with the Ukrainian conflict. This does not include those assets that are subject to sanctions under the “50% rule” – subsidiaries, branches, etc. Other initiators of sanctions (USA, UK, Canada, etc.) have blocked a comparable number of Russian individuals, although their lists do not always coincide. In addition, blocking US sanctions are often complied with by large businesses in third countries, including those friendly to Russia, out of fear of being subject to blocking sanctions themselves.

Can the number of the already blocked Russian individuals be considered large? Yes, it can. Systemically important Russian companies – banks, large industrial enterprises, and even several universities – are under blocking sanctions. A further expansion is entirely possible. They can be aimed at causing maximum damage to the economy. In this case, we will see large companies on the sanctions lists. One area of escalation is the energy sector, but here the appetite for sanctions may be limited by a fear of fluctuations in energy markets. They can also solve political problems, that is, to block the media, government departments, NGOs, educational institutions, as well as public and political figures. According to the practice of past years, both problems can be solved simultaneously.

Economic Statecraft
US Congress and Sanctions Against Russia
Ivan Timofeev
The political crisis in relations between Moscow and Washington is so deep that the only realistic scenario for the near future is an escalation of sanctions, Russia’s growing separation from the globalised economy, relying on its own forces, and the development of relations with the so-called “world majority,” writes Valdai Club Programme Director Ivan Timofeev.


The same applies to trade sanctions. Dual-use goods are already almost completely prohibited from being supplied to Russia. But the lists of industrial goods and “luxury goods” prohibited for import into the Russian Federation, as well as the lists of goods prohibited for export from Russia, may further expand. There will also be an escalation in the direction of banning the supply of products of Russian origin from third countries.

The confiscation of assets of blocked Russian individuals and the subsequent transfer of funds to Ukraine has been discussed since the very beginning of the Special Military Operation. Canada has a full-fledged mechanism for such confiscation. In the USA, there is a precedent for transfer of some of the assets of a blocked Russian individual to Ukraine, but here we are talking about assets involved in a criminal case to circumvent sanctions, that is, there is no mechanism similar to the Canadian one in the USA so far. The new 12th EU sanctions package also introduces a mechanism to allow the assets of blocked Russians to be confiscated to compensate for losses incurred when the property of EU citizens in Russia is seized. There is no practice here yet, and it may well emerge in 2024.

Another form of confiscation is the use of income from Russian sovereign assets in the jurisdiction of the initiating countries. In particular, this was mentioned in the statement of the G7 leaders on December 6, 2023. In a similar vein, there were statements by the EU authorities, who intend to receive up to 15 billion euros from the income of the Russian Central Bank’s frozen assets.

Apparently, the announced amount may be the annual income from Russian assets. Its transfer to Ukraine could partially remove the burden of such assistance from the EU and its members. Surely, Moscow will perceive such actions as illegal and will pursue counter-damage measures against the initiators of the sanctions. Moreover, unfreezing Russian assets is an extremely unrealistic long-term scenario.

The fight against sanctions evasion and pressure on businesses from friendly countries will become increasingly noticeable. In 2023, these measures were already very active. Almost all rounds of US blocking sanctions against Russia included sanctions against individuals and third countries (Turkey, UAE, China, Singapore, Kyrgyzstan, Cyprus, etc.), which the US authorities considered involved in circumventing export controls and other sanctions regimes. A mechanism for such secondary sanctions was introduced in the EU last year, although it was used limitedly, and EU export controls in relation to third countries through which goods from the European Union are supplied to the Russian Federation in circumvention of sanctions have not yet been applied at all. 

However, the criminal prosecution of sanctions violators in EU countries is rapidly gaining momentum and is already comparable to the American procedures. New legal mechanisms have appeared in the United States itself. In particular, US President Joe Biden signed a new executive order introducing amendments to executive orders No. 14024 and 14068. In the first case, we are talking about the emergence of a sanctions mechanism against foreign financial institutions carrying out financial transactions in the interests of the Russian defence industry and the supply of certain types of electronic and industrial equipment to Russia. The second one concerns the extension of bans on the import of Russian goods (non-industrial diamonds, fish, seafood, etc.) in cases where these goods become components of imported products from third countries. It is symptomatic that the EU, in its 12th package, also reflected a ban not only on Russian diamonds, but also on products created in third countries after their processing.

The threat of secondary US sanctions against financial institutions appears to be the most significant. If previously the mechanisms of the Executive Order 14024 gave the US Treasury the authority to block those persons from third countries who circumvent the US sanctions regime or interact with Russian persons under sanctions, now the range of their actions is expanding. Even if the transaction does not involve actual American goods or the US sanctions regime, a financial institution from a third country may still be subject to sanctions. It is unlikely that such a practice will be widespread. But it is quite likely that individual indicative measures will force banks and other financial institutions to take this risk more seriously.

Apparently, the first concentrated “volley” to implement these measures will be made by February 24, 2024. The authorities of the United States and other Western countries will try to “mark” the start date of the Special Military Operation with the most noticeable political steps, including sanctions. Mechanisms for such steps are being prepared now. The Russian authorities, for their part, are also working on response measures. The task of mechanisms for financial settlements with friendly countries independently of the West is becoming even more important. The tit-for-tat logic will continue to dominate relations between Russia and the West.

Economic Statecraft
2023: Stabilisation After the Shake-Up 
Ivan Timofeev
The turning point is behind us, Russia is living in new conditions of confrontation and is coping with them. Russian politics has moved from crisis mode to the new normal, writes Valdai Club Programme Director Ivan Timofeev.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.