Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
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ISSN 0798- 1406 ~ De pó si to le gal pp 198502ZU132
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de Es tu dios Po lí ti cos y De re cho Pú bli co “Dr. Hum ber to J. La Ro che” (IEPDP) de la Fa-
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ción, dis cu sión y con fron ta ción de las ideas y avan ces cien tí fi cos con com pro mi so so cial.
Cues tio nes Po lí ti cas apa re ce dos ve ces al año y pu bli ca tra ba jos ori gi na les con
avan ces o re sul ta dos de in ves ti ga ción en las áreas de Cien cia Po lí ti ca y De re cho Pú bli-
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Vol. 39, Nº 68 (Enero - Junio) 2021, 251-272
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Economic and nancial results of the
USA and the European Union sanctions
war against Russia: rst results
DOI: https://doi.org/10.46398/cuestpol.3968.16
Ilmir Nusratullin *
Raul Yarullin **
Tagira Ismagilova ***
Olga Eremeeva ****
Tatiana Ermoshina *****
Abstract
As part of this study, the goal is set to assess the impact of
sanctions imposed by the United States and the European Union
on the economy and nancial sector of Russia, to identify the
effectiveness of the initial goals of these countries. To achieve the
goal, the legal acts concerning the imposed sanctions of the USA and the
European Union against Russia were rst analyzed, a chronology of events
was described, and sanctions were classied. Further, based on the data
of the World Bank and the Federal State Statistics Service of the Russian
Federation, the results of the sanction pressure on the Russian economy
and nancial sector were estimated. Then the results of this study were
compared with the results obtained by other scholars. The paper concluded
that the sanctions of the United States and the European Union did have an
impact on the economy and nancial sector of Russia, but this inuence was
not as signicant as the leaders of these countries expected. In addition, the
impact of the sanctions is gradually decreasing despite the introduction of
new sanctions on various pretexts.
Keywords: Sanctions against Russia; economic war; nancial pressure
for sanctions; economic sanctions; geopolitical economy.
* Bashkir State University, Russia. ORCID ID: https://orcid.org/0000-0001-7810-2945. Email:
nusratullin.iv@gmail.com
** Financial University under the Government of the Russian Federation, Russia. ORCID ID: https://
orcid.org/0000-0001-6834-3032. Email: jrr61@mail.ru
*** Financial University under the Government of the Russian Federation, Moscow, Russia. ORCID ID:
https://orcid.org/0000-0002-2747-3858. Email: tagira_i@mail.ru
**** Katanov State University of Khakassia, Russia. ORCID ID: https://orcid.org/0000-0001-9258-4610.
Email: yeremeevaos@yandex.ru
***** Ogarev Mordovia State University, Republic of Mordovia. ORCID ID: https://orcid.org/0000-0003-
4575-8969. Email: baricheva@mail.ru
252
Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
Resultados económicos y nancieros de la guerra de
sanciones de Estados Unidos y la Unión Europea contra
Rusia: primeros resultados
Resumen
Se estableció el objetivo de evaluar el impacto de las sanciones impuestas
por Estados Unidos y la Unión Europea sobre la economía y el sector
nanciero de Rusia, para identicar la efectividad de los objetivos iniciales
de estas sanciones. Para lograr este objetivo, se analizaron los actos jurídicos
relativos a las sanciones impuestas por EE. UU. y la Unión Europea contra
Rusia, se realizó una cronología de los hechos descritos y las sanciones se
clasicaron, de ahí que se hizo uso del método analítico y de la revisión
documental. Además, sobre la base de los datos del Banco Mundial y el
Servicio de Estadísticas del Estado de la Federación de Rusia, se estimaron
los resultados de la presión de las sanciones sobre la economía. Luego, los
resultados de este estudio se compararon con los resultados obtenidos por
otros académicos. El documento concluyó que las sanciones de Estados
Unidos y la Unión Europea sí tuvieron un impacto en la economía y el
sector nanciero de Rusia, pero esta inuencia no fue tan signicativa como
esperaban los líderes de estos países. Además, el impacto de las sanciones
está disminuyendo gradualmente a pesar de la introducción de nuevas
sanciones con diversos pretextos.
Palabras clave: Sanciones contra Rusia; guerra económica; presión
nanciera de sanciones; sanciones económicas;
economía geopolítica.
Introduction
Economic warfare is a form of political and competitive struggle in which
economic measures weaken or destroy the economic potential of some
country. Modern politicians understand that the physical extermination of
enemies is not always protable; it is more advantageous to build a system
of economic dependence and, through control over the enemy’s resources
and its sales markets, make it work for oneself. The economic war has as
its alternative goal the “peaceful” conquest and retention of new economic
markets (Evsyakova, 2019).
The main principle of economic warfare is the establishment of
dependent economic relations, and in the case of resistance, even the
inclusion of physical forms of inuence, state pressure and extortion under
the threat of the use of armed forces. For this, modern developed countries
have at their disposal special force, intelligence, ideological, psychological,
etc. structures. At the present stage, economic warfare is carried out mainly
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in three directions: “brain pumping”, economic expansion, and industrial
espionage (Titova, 2006). It can also be carried out by using various
propaganda slogans such as the struggle for democracy, the environment,
the rights of national minorities, and others. In this case, it is closely
connected with the information war (Maan, 2014; Meshcheriakova, 2018).
In addition, economic warfare is closely linked to big politics, as it is the key
to depriving “inconvenient” governments of public support (Martynenko,
2016).
Economic sanctions, suspension of loans from developed countries and
major international nancial and credit organizations pose great difculties
for the economy of the “delinquent” countries, most often the “developing”
ones. The United States and European countries, pursuing an aggressive
foreign policy towards developing countries, prefer to avoid using the
term “economic warfare”. The ruling establishment of the United States
and its allies use such neutral words as “economic sanctions”, “trade and
economic restrictions”, “moratorium”, “prohibitions”, etc. (Kaempfer and
Lowenberg, 2007). However, as a rule, all these restrictions, moratoriums,
and prohibitions taken together can have a powerful effect, designed to
undermine a national economy, provoke social unrest, change of power and
political course (Neuenkirch and Neumeier, 2015).
In general, the modern economic warfare is a confrontation between
two powers or different blocs against each other or against a separate
country using economic sanctions – an embargo on the export/import of
new technologies, high-tech goods, partial or complete trade blockade.
Methods such as the collapse of the national currency, of the prices of the
main exported natural resources (especially oil and gas), and of various
industrial and agricultural goods are also used. The totality of economic
sanctions that the West imposed against Russia from 2012 to the present
can be qualied as full-scale economic warfare.
In Neuenkirch and Neumeier (Neuenkirch and Neumeier, 2015), it
was empirically assessed how economic sanctions imposed by the United
Nations and the United States affected the GDP growth of sanctioned
states. In that study, they analyzed 160 countries, of which 67 were subject
to economic sanctions for the period 1976-2012. The authors found that
UN sanctions had a signicant impact on the economic growth of the target
state. On average, the introduction of the UN sanctions reduces the annual
growth rate of real GDP per capita in such a state by more than 2 percentage
points. These negative consequences last for 10 years and lead to an overall
decrease in the national GDP per capita by 25.5%. The comprehensive
economic UN sanctions, that is, embargoes affecting almost all economic
activity, lead to a decrease in GDP growth of more than 5 percentage points.
The effect of the US sanctions is much smaller and less noticeable. The
imposition of the US sanctions reduces the GDP growth of the target state
254
Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
by 0.75–1 percentage point. This detrimental effect on growth persists for 7
years and, together, leads to a decrease in GDP of 13.4%.
The objective of this study is to rst assess the impact of sanctions
imposed by the United States and the European Union on the economy and
the nancial sector of Russia, and to identify whether these countries have
achieved their initial goals.
To achieve the objective, the following tasks have been set:
1. To reveal the history of the sanctions confrontation between the
USA, the European Union, and Russia;
2. To give the main characteristics of the imposed sanctions;
3. To reveal the economic and nancial consequences for Russia from
the sanctions confrontation.
1. Materials and Methods
While preparing this paper, regulatory legal acts governing the imposition
of sanctions were analyzed. These are regulations databases of the US
(https://obamawhitehouse.archives.gov/brieng-room/legislation), the
EU (https://europa.eu/european-union/law_en), and Russia (http://
pravo.gov.ru/ips/). To assess the impact of sanctions on the economies of
the countries, the materials of the World Bank (data.worldbank.org/), and
the Federal State Statistics Service of the Russian Federation (https://www.
gks.ru/) were used. In addition, the paper used materials from academic
articles of the ScienceDirect database (https://www.sciencedirect.com/).
The study was conducted as follows:
1. First, regulations on the imposed sanctions by the United States and
the European Union against Russia were analyzed, a chronology of
events was described, and the sanctions were classied.
2. Further, based on the data of the World Bank and the Federal
State Statistics Service of the Russian Federation, the results of the
sanction pressure on the Russian economy and the nancial sector
were estimated.
3. Then the results of the study were compared with the results of
studies by other scholars.
2. Results
The history of the sanctions confrontation of the United States, the
European Union and Russia
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According to the provisions of international law, sanctions are coercive
measures of an armed and unarmed nature that are applied by subjects
of international law in the established procedural form in response to an
offense in order to prevent it, restore the violated rights and ensure the
responsibility of the offender. Thus, sanctions are coercive measures applied
to a state that violated international legal obligations (Neshataeva, 1992).
Sanctions are inextricably linked with the institution of international legal
responsibility of states – “the responsibility of states for internationally
wrongful acts”.
The history of the application of sanctions imposed in the world from
1915 to 2000 totals 174 cases, of which: the USA imposed sanctions in
109 cases, the UN in 20 cases, the European Union in 14 cases, the United
Kingdom in 16 cases, the Arab League states and its members – in 4 cases,
the Soviet Union and Russia – in 13 cases (Hufbauer et al., 2007).
The modern “sanction warfare” against Russia began in 2012, when the
adoption of the Magnitsky Act in the USA formally repealed the Jackson-
Vanik Amendment to the US Trade Act. The Act gave the President of the
United States the right to set the list of persons responsible for the detention,
ill-treatment and death of Sergey Magnitsky and other serious human rights
violations in the Russian Federation that are subject to sanctions (the ban
on the entry into the United States of such persons; the freezing of assets
and the prohibition of any transactions in connection with the transfer of all
property and property rights of such persons) (Public law, 2012).
The second wave of the anti-Russian sanctions falls on the period of
the political crisis in Ukraine in 2014-2019. In addition, the United States
and the European Union imposed sanctions against Russia in connection
with the support of the Governments of Venezuela and Syria, cooperation
with Iran and the DPRK. One should also recall the scandal about alleged
Russian interference in US elections and the Skripals case.
After classifying the reasons for the imposition of sanctions against
Russia, they look as follows (according to the US and the EU regulations):
1. The Magnitsky Act of 2012. Large-scale sanctions against Russia
began to be introduced in 2013 due to the death of a Russian auditor
Sergey Magnitsky. In the West, they believe that his death in 2009
was caused by the exposure of corruption schemes for tax returns,
which could have involved Russian ofcials and security forces.
The Magnitsky Act, originally directed against persons who, in the
opinion of the American authorities, could have been involved in the
death of the auditor, later began to apply to those responsible for
violating human rights and the rule of law both in Russia and around
the world.
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Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
2. The conict in Ukraine – the situation around Crimea. The most
ambitious sanctions are related to the annexation of Crimea to Russia
and events in the east of Ukraine.
3. Cyber-attacks. Sanctions for cyber-attacks were introduced by Barack
Obama on April 1, 2015. They allow the U.S. Treasury Department to
block in the country any assets of individuals suspected of committing
cyber-attacks.
4. Opponents of America. On August 2, 2017, US President Donald
Trump signed the Countering America’s Adversaries Through
Sanctions Act (CAATSA). It imposes additional restrictions on Iran,
North Korea and Russia.
5. For ties with Syria, Venezuela, and the DPRK. The smallest groups of
sanctions against Russia are those for supporting the Governments
of Syria and Venezuela and deals with the DPRK authorities.
6. The Skripals case. On August 27, 2018, the sanctions entered into
force that do not directly affect individuals or legal entities. They are
connected with the poisoning of the ex-colonel of the GRU Sergey
Skripal and his daughter Julia in British Salisbury.
The economic sanctions of the USA and Western countries, applied in
recent years against Russia, can be regarded only as a return to the sanctions
campaign during the Cold War against the Soviet Union. The noted sanctions
have become a common foreign policy tool of Western countries, one of the
elements of the Russia containment strategy. Moreover, in many respects,
the introduction of the sanctions is connected with far-fetched reasons, not
conrmed even during investigations, for example, cyber-attacks during
the US presidential election.
2.1 Key features of the US and the EU sanctions
According to the type of sanctions, then they can be classied as (Bagheri
and Akbarpour, 2016):
1. Personal – sanctions against particular people (ofcials, participants
in conicts, businessmen, company managers, etc.) who are
prohibited from entering the territory of the country imposing
sanctions, as well as freezing assets.
2. Against companies/organizations – sanctions against particular
companies and organizations that are prohibited from operating in
the country imposing sanctions, as well as with its companies and
organizations, and freezing of assets.
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3. Economic – economic measures of a prohibitive nature in the eld of
trade and economic cooperation.
4. Financial – a set of prohibitive measures in the eld of nance and
nancial cooperation.
5. Diplomatic – a set of measures of a prohibitive nature in the eld of
political cooperation.
Classifying the sanctions by the countries that introduced them, the
situation is as follows (Table 1).
Country Sanctions imposed
Australia Supported the US sanctions, introduced sanctions lists
against citizens and companies of the Russian Federation
Albania Joined the individual and general EU sanctions
Georgia Canceled several interstate meetings. Refused to impose
other sanctions
Israel Banned the supply of weapons and military technology
Iceland Joined the majority of individual and general EU sanctions
Liechtenstein Joined the majority of individual and general EU sanctions
Moldova Joined the majority of the EU sanctions, banned
broadcasting of several Russian TV channels
Norway Consistently joined the EU sanctions, canceled military
and economic cooperation
New Zealand Introduced personal sanctions, supported Australia in
banking sanctions
Ukraine Joined the majority of individual and general EU sanctions,
banned broadcasting of Russian TV channels
Switzerland Introduced individual and economic sanctions
Montenegro Supported part of the EU individual and general sanctions
Japan Stopped visa mitigation negotiations, disputed territory
negotiations, introduced individual and economic
sanctions
Table 1. Countries supporting the US and the EU sanctions against
Russia
Source: (RIA, 2020).
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Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
Further, let us consider the list of economic, nancial, and diplomatic
sanctions imposed by the US and the EU from 2014 to 2020 (Table 2).
Reason/
Type of
sanctions
Ukraine/Crimea
The Skripals poisoning
Economic Licensing of US exports of
defense goods and services to
Russia terminated in the USA
(2014)
In the US, it is forbidden to
sell high-tech goods to Russia
that could enhance the combat
readiness of the army (2014)
The EU imposed an embargo on
the import and export of weapons
to Russia, a ban on the export of
dual-use goods and technologies
for military use (2014)
In the USA, the supply of
equipment and technologies to
the deep oil and gas production,
development of the Arctic shelf
and production of shale oil and gas
reserves to Russia was prohibited
(2014)
U.S. Department of Defense was
banned from allocating funds for
military cooperation with Russia
(2016)
The supply of foreign aid
to Russia, with the exception
of emergency humanitarian
aid, was terminated.
The supply of food and
agricultural products, the
sale of arms and any defense
goods, defense services,
design and construction
services were stopped. The
US also refuses to issue any
loans and credit guarantees
to Russia. The US may
tighten these sanctions if
Moscow does not provide
guarantees for the non-use
of chemical and biological
weapons (2018)
Financial The US investment and military
cooperation with Russia frozen
(2014)
The European Investment Bank
stopped nancing projects in
Russia (2014)
A ban was introduced in
the EU on investments in the
infrastructure, transport and
energy sectors, as well as oil and
gas production in the Russian
Federation (2014)
The EU investments in Crimea
and Sevastopol (2014) were
prohibited.
The US requires
international nancial
organizations not to provide
Russia with any international
loans or nancial/technical
assistance. The Government
also prohibits any US bank
from granting any loans
or credits to the Russian
government – with the
exception of loans or credits
intended to purchase food or
other agricultural goods or
products (2019)
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CUESTIONES POLÍTICAS
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Diplomatic The EU – Russia Summit
canceled (2014)
The EU embassies in Russia
are forbidden to issue visas to
residents of Crimea (2014)
The work of the Russian-
American Presidential Commission
(2014) was terminated
The US and its allies
announced the expulsion of
Russian diplomats. Twenty-
nine countries together
expelled more than 150
Russian diplomats and
diplomatic representatives.
The US expelled more
Russians than all, over 60
people, followed by the UK –
23 people (2018)
Table 2. Economic, nancial and political sanctions of the US and the
EU from 2014 to 2020
Source: (Ageev and Yarmoshchuk, 2020)
As can be seen from the table, the most painful sanctions of the US and
the EU are those in the eld of technical and scientic cooperation, in the
eld of banning nancing of Russia and companies and organizations from
Russia by nancial organizations of the West, except for short-term loans.
Next, let us consider the individual sanctions and sanctions against
companies and organizations imposed by the US and the EU (Table 3).
Reason for imposing sanctions
Number
of citizens
of Russia
Number of
companies and
organizations
The death of Sergey Magnitsky, corruption
and violation of human rights
57 1
Annexing of Crimea and events in the east
of Ukraine
286 478
Cyber-attacks vs the US 27 11
Sanctions under the Countering America’s
Adversaries Through Sanctions Act
(CAATSA)
32 42
Supporting the Government of Syria 12 6
Supporting the Government of Venezuela 0 3
Sale of goods or weapons to the DPRK,
Iran, and Syria
6 11
The Skripals case 4 0
Table 3. The number of legal entities and individuals subject to
sanctions (data in the lists may be duplicated)
Source: (Sapronova et al., 2020).
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Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
More sanctions against people and companies have been introduced due
to the annexation of Crimea and events in eastern Ukraine, as well as within
the framework of the Countering America’s Adversaries Through Sanctions
Act.
From April 12, 2013 to January 9, 2017, the US President Barack Obama
imposed sanctions against 555 citizens and companies of Russia; from June
1, 2017 to March 12, 2020, US President Donald Trump imposed sanctions
against 260 citizens and companies of Russia (Sapronova et al., 2020).
More details are displayed in Figures 1 and 2.
Most of all, the separatist forces of the DPR and the LPR (23%), the
Russian security/military chiefs (23%), politicians (13%), businessmen
(14%), and ofcials (14%) fell under sanctions.
Most companies and organizations under the sanctions of the US and
the EU are the fuel and energy sector (25%), banks (22%), and defense
companies (12%).
Source: (Sapronova et al., 2020)
Figure 1. The structure of citizens subject to the US and the EU
sanctions (data given on the number and as a percentage of the total
share)
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CUESTIONES POLÍTICAS
Vol. 39 Nº 68 (Enero - Junio 2021): 251-272
Source: (Sapronova et al., 2020)
Figure 2. Structure of companies and organizations subject to the US
and the EU sanctions (data given on the number and as a percentage of
the total share).
In general, based on the US and the EU regulations, sanctions against
Russia can be divided into blocking (in the USA this is the SDN (Specially
Designated Nationals) list and sectoral (in the USA this is the SSI (Sectoral
Sanctions Identications) list.
When subject to blocking sanctions, the assets of individuals and
companies, both in the US and in the EU, are blocked. It is forbidden to
conduct any business and transactions with them. Sanctioned individuals
are prohibited from entering the US and/or the EU.
Sectoral sanctions apply to particular individuals operating in certain
sectors of the economy, as well as to companies owned or controlled by
such individuals.
Assets of companies included in the sectoral sanctions list are not frozen,
unlike those in the SDN list. In the banking sector, getting into such a list
262
Ilmir Nusratullin, Raul Yarullin, Tagira Ismagilova, Olga Eremeeva y Tatiana Ermoshina
Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
does not imply isolation of these companies from the nancial system –
only the restrictions on the provision of new nancing by the US and the
EU companies apply. In practice, this means that, for example, banks that
fall under sectoral sanctions will not be able to attract loans from banks and
investors, whether it be bonds or credits. Moreover, the ban does not apply
to debts for a period of less than 14 days (for the US sanctions) and 30 days
(for the EU sanctions).
In the defense sector, persons and companies subject to the US
sanctions have been banned from importing and exporting weapons and
related materials, dual-use goods and services from/to Russia. For those
included in the sanctions lists of the EU members, there is a ban on the
purchase, sale, transfer, and export of arms and ammunition to Russia by
the EU residents, as well as a ban on the export of dual-use goods (goods
that can be used both for peaceful purposes and for creating weapons of
mass destruction) and technology for military use.
In the energy sector, persons and companies that have fallen under the
US sanctions have been banned from exporting to Russia goods, services
or technologies related to exploration and production of oil on the Arctic
shelf, deep-sea production, and shale projects (the energy sector). For
the EU sanctioned lists, a licensing procedure has been introduced for
transactions with Russia in relation to goods and technologies intended for
the extraction and exploration of oil and other mineral wealth.
Certain legal acts may provide for exceptions in the form of limiting the
effect of sanctions in the implementation of particular operations.
Economic and nancial results for Russia of the US and the EU sanctions.
Further, by the example of several indicators, one may study how the
sanctions of the US and the EU affected the Russian economy and nancial
sector.
First, let us consider the indicator of the gross domestic product at
current prices and prices in a particular year (Table 4).
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2012 2013 2014 2015 2016 2017 2018 2019
GDP at
current
prices,
billion
rubles
68,103
.4
72,985
.7
79,030
.0
83,087
.4
85,616
.1
91,843
.2
104,629
.6
110,046
.1
GDP at
2016 prices,
billion
rubles
85,040
.3
86,533
.1
87,170
.2
85,450
.6
85,616
.1
87,179
.3
89,390
.4
90,589
.9
Consumer
price index
for goods
and services,
% 106.57 106.47 111.35 112.91 105.39 102.51 104.26 103.04
Source: (Rosstat, 2020).
Table 4. Gross domestic product at current prices and prices in 2016,
billion rubles
Considering GDP at current prices, its dynamics are positive over the
period from 2012 to 2019, the growth being 61.6%. It is also worth noting
that during the period of the imposition of foreign sanctions, the dynamics
of GDP growth at current prices decreased, but was positive overall.
However, GDP at current prices does not reect the real situation, since in
Russia throughout the whole period from 2012 to 2019 there was signicant
ination, its uctuations ranged from 3.04 to 12.91%. In this regard, it is
necessary to consider the dynamics of GDP at the prices of a particular year,
for example, 2016.
GDP at 2016 prices shows that the dynamics are not so rosy. GDP growth
amounted to only 6.5% for the period from 2012 to 2019. In 2015-2016,
there was a decrease in GDP. However, in 2017, GDP growth at 2016 prices
resumed. This is illustrated more clearly in Figure 3.
Source: (Rosstat, 2020).
Figure 3. Gross domestic product at current prices and at prices of
2016, billion rubles
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rst results
It should be noted that the decline in Russia’s GDP in the indicated
period is explained not only by the inuence of the foreign sanctions, but
also to a greater extent by a decrease in the cost of oil in the world market
(Figure 4).
Source: (Rosstat, 2020).
Figure 4. Dynamics of oil prices in the world market from 2012 to
2019
A 2-fold decrease in the cost of oil in 2015-2016 led to a decrease in the
export earnings of most Russian oil and gas (Gazprom, as the gas prices in
most contracts are tied to the oil prices) companies. However, these losses
for the Russian budget were offset by the depreciation of the ruble against
the dollar from 39 rubles/$ to almost 80 rubles/$. Modern research boils
down to the fact that the decline in Russia’s GDP in 2015-2016 was mainly
due to a drop in the cost of oil, and not to the imposed sanctions (Korotin
et al., 2019).
In general, considering the dynamics of the industrial production index
after the introduction of the main effective measures of sanction pressure,
the performance of Russia looks more positive than in the countries that
imposed sanctions against Russia, especially compared to Ukraine, France,
and the UK (Table 5).
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2016 2017 2018
Russia 113.3 115.7 119
Ukraine 83 83 84
Germany 112 116 117
United Kingdom 100.2 102 103
France 100.5 102 103
USA 108 111 115
Source: (Rosstat, 2020).
Table 5. Industrial production indices, %
The most signicant measures of sanction pressure on Russia were the
sanctions in the eld of technological and scientic cooperation, against the
business and the nancial sector. Let us consider their consequences now.
In the period from 2012 to 2019 in Russia, the share of high-tech and
knowledge-intensive industries in the gross domestic product was slowly
growing from 20.2 to 21.6%, in 2015 and 2016 there was a slight decrease
to 21.1 and 21.3%, respectively. Judging by an increase in highly productive
jobs in % compared to the previous year, in 2015 and 2016 there was an
outow, in other years there was an inow (Table 6). Thus, the effect of
sanctions, if it was in 2015 and 2016, then decreased by 2017.
2012 2013 2014 2015 2016 2017 2018 2019
Share of high-tech
and knowledge-
intensive industries
in the gross domestic
product, % of the
total
20.2 21.0 21.6 21.1 21.3 21.8 21.1 21.6
Increase in highly
productive jobs, %
compared to the
previous year
12.7 6.9 4.5 -9.1 -4.8 7.1 14.7 5.6
Source: (Rosstat, 2020).
Table 6. Development of high-tech and knowledge-intensive
industries in Russia
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Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
Further, let us consider the operational performance of medium and
large companies in Russia (Table 7).
2012 2013 2014 2015 2016 2017 2018 2019
*
Balance of prot
and loss, billion
rubles
7,824 6,854 4,347 7,503 12,801 9,037 12,400 15,758
in % to the
corresponding
period of the
previous year
110.8 82.7 68.2 173.6 157.0 69.5 159.6 117.5
Prot amount
9,213 9,519 10,465 12,654 15,823 14,079 18,332 17,696
Proportion
of protable
organizations, %
70.9 69.0 67.0 67.4 70.5 68.1 66.9 73.5
Loss amount
1,389 2,665 6,118 5,151 3,022 5,042 5,932 1,938
Proportion of
unprotable
organizations, %
29.1 31.0 33.0 32.6 29.5 31.9 33.1 26.5
Source: (Rosstat, 2020).
Table 7. Operational performance of medium and large companies in
Russia.
If one considers the overall economic performance of medium and large
companies in Russia in 2012-2019, in general there was a positive trend,
growth was observed except for 2013, 2014 and 2017. The amount of prot
tended to increase. In 2014, a decrease in protability was visible, which
may be caused by the imposed sanctions and a decrease in the cost of oil in
the world market, followed by devaluation of the ruble.
Further, let us consider the performance of banks in Russia (Table 8).
2012 2013 2014 2015 2016 2017 2018 2019
Total prot (+)/
loss (-) received
by existing credit
institutions,
million rubles
1,011
.9
993.6 589.1 192.0 929.7 789.7
1,344
.8
2,036
.8
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Prot volume
of credit
institutions with
prot, million
rubles
1,021
.3
1,012
.3
853.2 735.8
1,291
.9
1,561
.6
1,919
.4
2,196
.4
Proportion of
existing credit
organizations
that had prot, %
94.2 90.5 84.9 75.4 71.4 75.0 79.3 84.4
Losses volume
of credit
institutions
that had losses,
million rubles
9.4 18.7 264.1 543.8 362.2 772.0 574.6 159.6
Proportion of
existing credit
organizations
that had losses,
%
5.8 9.5 15.1 24.6 28.6 25.0 20.7 15.6
Source: (Rosstat, 2020).
Table 8. Performance of banks in Russia
The impact of the sanctions on the Russian banking sector is clearer.
During the period of the introduction of the main sanctions by the US and
the EU in 2014-2015, the protability of banks was sharply reduced (by
5 times in 2015 compared to 2012), but already in 2018 and 2019, it was
recovering and sharply increasing (a 2-fold increase on 2012). However,
it is too early to talk about the restoration of the banking sector in Russia,
since there is still a high proportion of loss-making banks (15.6% in 2019
compared to 5.8% in 2012).
Now, let us consider the dynamics of imports and exports in Russia
(Figure 5).
Analyzing the dynamics of exports and imports in Russia, it is worth
noting that their decline began back in 2012, and in 2014-2016 it only
intensied. The fall in exports and imports is primarily due to the situation
in the oil market, the devaluation of the ruble, and the introduction of
foreign sanctions. However, the trend has been changing since 2017, when
exports and imports growth in Russia began.
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Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
Source: (Rosstat, 2020).
Figure 5. Dynamics of imports and exports in Russia
Thus, the impact of sanctions on the economy and the nancial sector of
Russia was observed only from 2014 to 2016, then this effect was reduced.
That is, the effectiveness of the sanction pressure is gradually decreasing
despite the introduction of new sanctions under various pretexts.
3. Discussion and Conclusion
The results obtained in this study are similar to those obtained earlier.
Thus, in (Nusratullin et al., 2020a, 2020b), during an analysis of industrial
and socio-economic development, a decrease in the sanction effect on the
Russian industry and the public standard of living was revealed. In addition,
somewhat positive trends were identied in the operation of the Russian
manufacturing industry. It was concluded in the above studies that today
for Russia, the strategic tasks were reduced to overcoming technological
backwardness and carrying out technological modernization of the
manufacturing industries based on the use of innovative achievements, as
well as import substitution of the economy sectors that are sensitive to the
foreign sanctions.
(Bayramov et al., 2020), considering the Western sanctions against
Russia, attempted to assess the medium-term effects of these sanctions
on Russia’s post-communist neighbors. In the course of that study, the
scholars came to the conclusion that the Western sanctions against Russia
had a signicant impact on the economy of neighbors – the CIS countries.
However, this inuence also decreased over time.
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Korotin et al., (2019) put that the sanctions imposed against Russia
in 2014 coincided with a shock in the oil market. It is believed that both
the sanctions and the falling oil prices affected the ruble exchange rate,
which depreciated by 2 times compared to the pre-crisis level. The authors,
evaluating the effect of the sanctions on the ruble exchange rate, came to
the conclusion that there was no direct effect of the sanctions on the ruble
exchange rate.
(Dong and Li, 2018) analyzed the US and the EU economic sanctions
against Russia and concluded that all countries involved in the sanctions
would suffer, but comparatively Russia would suffer more, while the US
and the EU would suffer less. The EU sanctions have a greater impact on
Russia than the US measures, meantime, the Russian sanctions will have
a greater impact on the EU than on the US. From an economic point of
view, the optimal choice for the US and the EU is to abandon the sanctions
against Russia, while the retaliatory sanctions are Russia’s optimal choice
when it is faced with sanctions. The countries offside the sanctions will
benet from the trade diversion effect.
(Gurvich and Prilepskiy, 2015) examined the impact of the Western
nancial sanctions on the Russian economy. Modeling the components of
the capital ow (taking into account the inuence of other factors, including
falling oil prices) showed that sanctions directly affected banks, oil, gas and
weapons companies in Russia, severely limiting funding from abroad by
reducing the ow of foreign direct investment and worsening the nancing
conditions. The total negative impact on gross capital inows for 2014–
2017 was estimated at approximately $280 billion. The predicted impact
of the sanctions on GDP was estimated at -2.4 percentage points by 2017
compared to the hypothetical scenario without sanctions, but this is 3.3
times lower than the estimated impact of the oil price shock.
(Ankudinov et al., 2017) examined the impact of the sanctions on the
Russian stock market. The results showed that for almost all industry
indicators, a statistically signicant increase in volatility was observed. At
the same time, the study does not have sufcient data on structural changes
in the stock market. The changes in the stock market cannot be directly
related to the sanctions imposed; the latter can be largely caused by higher
country-specic risks due to geopolitical tensions and the volatility of oil
prices.
Thus, in this study and in the studies by fellow scholars, some results
were obtained acknowledging that the sanctions of the US and the EU did
have an impact on the economy and the nancial sector of Russia, but this
impact was not as signicant as the leaders of these countries expected. In
addition, the impact of the sanctions is gradually decreasing despite the
introduction of new sanctions on various pretexts.
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Economic and nancial results of the USA and the European Union sanctions war against Russia:
rst results
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