By John Q. Hosedrinker 
New U.S. sanctions targeting Gazprombank, Russia’s third-largest bank, are under consideration. The sanctions, expected by the end of November, would prohibit Gazprombank from transactions with American banks, impacting its role in gas settlements with Europe and its management of substantial Russian foreign currency reserves. This action follows previous, less stringent Western sanctions that have allowed Gazprombank to retain access to SWIFT and major currencies, despite its connections to Kremlin insiders. The move has been communicated to G7 partners.
Read the original article here
The U.S. is finally sanctioning one of Russia’s largest banks, a move many feel is long overdue. The timing of this action has sparked considerable debate, with some questioning why it hasn’t happened sooner, especially given the ongoing conflict in Ukraine. The argument that Russia is already heavily sanctioned is countered by the fact that significant loopholes and delays have allowed key entities, like this major bank, to largely operate outside the reach of previous sanctions.
This delay isn’t simply a matter of bureaucratic sluggishness. Concerns about the potential for severe economic repercussions in the U.S. and Europe, particularly regarding energy prices and supply chains, have likely played a significant role in the measured approach to sanctions. A rapid, comprehensive application of all possible sanctions could trigger a devastating economic crisis, leaving the West with little leverage against Russia.
The strategy seems to be a slow, calculated tightening of the noose – a “slow choke hold,” as some have described it. This approach aims to maximize pressure on the Russian economy while minimizing immediate collateral damage in the West. The hope is that by gradually increasing the sanctions’ intensity, the impact on Russia will be more profound and lasting.
While this strategy isn’t without its critics – many believe a more aggressive and immediate approach is necessary – there’s a strategic rationale behind it. The gradual implementation allows for assessment of the effects of each step and provides opportunities to adjust the approach based on the responses from Russia and the global economy. Completely cutting off all economic ties with Russia could backfire, potentially strengthening Russia’s resolve and isolating the West.
There are valid concerns that even with the new sanctions, Russia will find ways to circumvent them. However, the existing sanctions are already having a significant impact, severely limiting Russia’s buying power and eroding trust in its financial system. The concessions Putin has been forced to make, including aligning with North Korea and cutting payments to families of fallen soldiers, demonstrate the effectiveness of these actions, albeit slow and measured ones.
The fact that this sanction specifically targets one of Russia’s largest banks highlights the calculated nature of the strategy. It signals a significant escalation of economic pressure, aimed at directly impacting the country’s financial backbone. But this move is also viewed with apprehension, given the potential political ramifications.
The current administration’s decision to sanction the bank is contrasted sharply with the actions (or inaction) of the previous administration. Accusations of leniency towards Russia during the previous term are fueled by evidence of delayed or weakened sanctions, raising concerns that a potential return to power by a pro-Russia leaning administration could rapidly reverse these sanctions. This fear underscores the urgency and precarious nature of the current situation.
The uncertainty surrounding the next election adds another layer of complexity. The limited timeframe of the sanctions, before a potential change in administration, underscores the sense of urgency felt by many. It raises concerns that the positive impacts of these sanctions could be rapidly undone, undermining the strategy’s long-term effectiveness.
Despite the ongoing criticisms and anxieties surrounding the implementation and potential reversal of sanctions, the overall consensus is that targeted, strategically applied sanctions can be effective long-term tools in influencing the behavior of adversarial nations. The ongoing economic pressure on Russia, coupled with military support for Ukraine, forms the core of the current Western response to the conflict. However, achieving a decisive victory or a favorable outcome will ultimately rely on a continued, sustained, and coordinated international effort. The seemingly slow and calculated approach, therefore, needs to be seen within the larger context of long-term strategy.