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The writer is a former Nato secretary-general

It is time to refocus our approach to sanctions on Russia. It is almost two years since the country launched its full-scale invasion of Ukraine, in an unprecedented attack that led to an unprecedented response from the democratic world.

In a matter of weeks, countries such as South Korea, Australia and Japan joined the EU, the UK and US in applying sanctions. Russia quickly surpassed Iran as the most sanctioned country and by the end of 2023 there were more than 18,000 active measures targeting Russian individuals or entities.

In the immediate aftermath of the invasion, Russia was largely cut off from the global financial system and more than $300bn of its assets around the world were frozen. The hope was that this shock would cripple Russia’s economy, weaken its ability to finance the war and ultimately force President Vladimir Putin to the negotiating table. Unfortunately, this has not happened. The economy was degraded but not destroyed. 

The conflict has now become a grinding war of attrition. Victory will depend largely on whether Ukraine and its allies can outproduce Russia. We must realign our sanctions policy with this objective. We should recognise that although the measures will not force Moscow to end the war overnight, they are another tool to disrupt and degrade the country’s means of production. Every Russian tank we prevent from being built is one less that Ukrainian forces need to destroy. 

We need to refocus in three areas. First, we should tighten enforcement of existing sanctions to stop western components reaching Russia’s military industrial complex. Second, step up sanctions against heavy industry, which has been co-opted to support the war effort. Last, use frozen Russian assets to fund Ukraine’s victory and recovery. 

Despite multiple rounds of sanctions, more than €2.6bn worth of western-made components that can be used for military production reached Russia in 2023. Analysis by the Kyiv School of Economics found almost 2,800 foreign components in destroyed or captured Russian weapons, including hypersonic missiles used to strike major Ukrainian cities and critical infrastructure.

We need to apply far greater pressure on western companies to ensure this does not happen. Suspicious spikes in sales to countries known to be in turn increasing exports to Russia, such as the United Arab Emirates, Kazakhstan or Kyrgyzstan, should be investigated and blocked when necessary. Our aim should be to cut off or damage supply lines to Russia’s military-industrial complex.

Over the past year, Russia has prepared its economy for a long conflict. It has dusted off the Soviet playbook and co-opted heavy industry to support the war effort. Western governments must respond by boosting sanctions on its means of production.

The nuclear industry, as well as companies producing steel and aluminium or noble gases such as helium, should be targeted. The war effort is still financed by revenues from hydrocarbon sales. Further restricting and disrupting the supply of Russian oil and gas is critical. We must put pressure on Gazprom and its subsidiaries, and crack down on countries helping Russian oil reach global markets.

Last, western leaders must get over their hesitancy to use frozen Russian assets to support Ukraine. In the initial days of the war, democratic governments blocked Russia’s access to more than €300bn in foreign exchange reserves. With policymakers on both sides of the Atlantic grappling with how to finance Kyiv’s war effort, this is a revenue source that we can no longer ignore.

So far, G7 governments have worried that other countries would pull their own reserves out of the member states in response to such a move. This fear is overblown. A bigger worry should be that our inaction leads to Russian success in Ukraine. This would set a far more dangerous precedent — that you can attack another country and the global order while suffering only minimal consequences. Unlocking more than €300bn would not only provide vital funding to Ukraine, but would also send a clear message to Putin — that he won’t get away with this.  

Two years of sanctions may have failed to bring Russia’s economy to its knees, but that does not mean they are not having an effect. Massive increases in defence spending may give a short-term boost to gross domestic product, but sanctions are driving up costs for businesses and restricting access to the latest technologies, damaging the country’s long-term productivity.

We must now go further. Sanctions will never be a 100 per cent effective weapon, but in a war of attrition we must use everything in our arsenal to deliver a Ukrainian victory.

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