US, Europe and Sanctions Against Russia: A Parting of the Ways?

The ‘Countering America’s Adversaries Through Sanctions Act’ (HR 3364), proposed and endorsed overwhelmingly by the US Congress last week and signed, somewhat grudgingly, by President Donald Trump yesterday, has attracted much criticism from policymakers in Brussels and across the EU, in particular for its elements related to energy pipelines.

Speaking last week, European Commission President Jean-Claude Juncker warned that ‘if our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days. America first cannot mean that Europe's interests come last’.

France complained, too, noting that the extraterritorial nature of the proposed sanctions ‘appears to be unlawful under international law’ as it may make it possible for measures to be imposed against European natural or legal persons ‘due to situations that have no connection with the United States’.

This statement reflects the widely held belief in Europe that the new sanctions against Russia would allow the US to sanction energy companies working on pipelines, such as Nord Stream 2, the huge natural gas pipeline connecting Russia to Germany through the Baltic Sea, that are seen as critical to the future of European energy security.

As Juncker observed, ‘The US Bill could have unintended unilateral effects that impact the EU's energy security interests’.

Even Trump, in a statement released as he signed the Act, expressed concerns that it may hurt the interests of America’s European allies.

However, the noise emanating from Europe and threats of complaints at the World Trade Organization hide a fundamental weakness in the approach taken by the EU towards Russian aggression.

Transatlantic cooperation in the design and implementation of sanctions is critical if their potential effectiveness is to be maximised. Sanctions are, most often, a tool applied in the pursuit of foreign policy objectives, which are normally shared on either side of the Atlantic and best pursued in tandem.

The apparent lack of coordination in this latest round, a function in part of the domestic agenda of Congress, play to President Vladimir Putin’s strategy of seeking ways of loosening and dividing the coalition of opposition to Russia’s annexation of Crimea, aggression in Eastern Ukraine and attempted interference in the democratic processes of a number of countries, including the US.

Yet the fact that Congress has taken this latest unilateral step should give Europeans pause for thought. European states are threatened by Russia’s actions to a far greater degree than the US.

Even Trump, in a statement released as he signed the Act, expressed concerns that it may hurt the interests of America’s European allies.

Russia’s incursions into Ukraine were taken in significant part due to Kiev’s tightening of relations with the EU, and the fragility and vulnerability to Russian interference of the political status quo in many member states all argue for an equally robust response to Moscow from Brussels.

Despite this, it is all Brussels can do to renew, on a six-monthly basis, the sanctions measures put in place following Russia’s actions in Ukraine in 2014. No meaningful effort has been made to maintain the effectiveness of these sanctions.

As noted in a RUSI report last month, the ‘inability [of the EU] to adapt nimbly to the reaction of those subject to sanctions means that the effectiveness, both politically and economically, of sanctions agreed by the EU decays rapidly in the face of adaptation and avoidance measures.’

In other words, the practical value of the signal of disapproval sent by the EU in 2014 has diminished considerably as the result of a lack of willingness to adapt and react to the circumvention and evasion measures employed by their targets.

Meanwhile, Russia ­– whose prime minister, Dmitry Medvedev, described the new sanctions as a ‘full-scale trade war’ – finds new means of disrupting western countries via a combination of its relentless propaganda machine and cyber attacks.

There is no doubting the hard work undertaken by EU member states, particularly France and Germany, to keep dialogue with Russia on Ukraine alive via the Minsk Agreements and the so-called Normandy Format of diplomatic consultations over the Ukraine crisis.

But sanctions, and maintaining the pressure they put on Russia’s economy, play an important role in underpinning the West’s message of disapproval.

In June, when the shape of the Russia sanctions proposal began to emerge from the US Congress, Austrian Federal Chancellor Christian Kern and German Foreign Minister Sigmar Gabriel commented that it would ‘diminish the effectiveness of our [transatlantic] stance on the conflict in Ukraine, if we were to no longer take joint action, and if completely separate interests were to prevail, such as the US’s economic pursuits in the field of gas exports.’

Some claim that new sanctions package ‘punishes European companies working with Russia’.

But the Act is very clear that the US president ‘should continue to uphold and seek unity with European and other key partners on sanctions implemented against the Russian Federation, which have been effective and instrumental in countering Russian aggression in Ukraine [and] should engage to the fullest extent possible with partner governments with regard to closing loopholes … with the aim of maximizing alignment of those measures’.

Sanctions, and maintaining the pressure they put on Russia’s economy, play an important role in underpinning the West’s message of disapproval.

Yes, the latest measures enacted by the US might be an underhand means of skewing international energy markets in its favour and threatening EU energy security; they are certainly spurred to a significant extent by the domestic policy agenda of the US Congress rather than part of a coordinated foreign policy agenda.

However, it is also the case that, facing the continued failure by Russia to act according to international norms and law, Congress is taking positive action and demonstrating the leadership that the EU is failing to deliver.

It would be most favourable – and lead to more effective outcomes – if such action was taken in coordination and collaboration between Washington, DC and Brussels. However, confronted with inaction in Europe, US authorities are rightly ensuring that Russia’s continued intransigence does not go unpunished.

The excessive and expansive use of sanctions can be detrimental: they lose effectiveness; they lose clarity of purpose; and they can, as Russia has demonstrated, elicit counter-measures. But a failure to maintain the purpose of already-imposed sanctions presents an even greater risk: the loss of credibility.

The handwringing and rhetoric emerging from Brussels simply succeeds in underlining the weakness of European leaders to confront Russian aggression.

The views expressed in this Commentary are those of the author, and do not reflect the views of RUSI or any other institution.