What Price Will Putin Pay for a Ukraine Invasion?
Good afternoon. It’s a quiet week on Capitol Hill, but a not-so-quiet week everywhere else.
Can Sanctions Stop Vladimir Putin?
A Russian buildup of troops on the border of Ukraine has the Biden administration and Congress scrambling on how best to deter a renewed Russian invasion. But for weeks, lawmakers have failed to reach consensus on sanctions or other means of dissuasion, and experts and policymakers are questioning whether traditional diplomatic tools have lost their effectiveness.
In recent weeks, Russia has stationed up to 100,000 troops along its border, sparking global concerns that it plans to invade neighboring Ukraine. The Biden administration is braced for what may come next: In a press conference Wednesday, President Joe Biden said of Russian leader Vladimir Putin that, “my guess is he will move in.” He added though, that Putin has “never seen sanctions like the ones I’ve promised will be imposed if he moves.”
Since the turn of the century, sanctions have become a go-to weapon when the United States has sought to quell bad actors on the geopolitical stage. But experts and lawmakers alike warn that sanctions alone may fall short of de-escalating this situation. And threats of economic punishment thus far haven’t been enough to get Putin to stand down.
“It’s very hard to put the burden of preventing an invasion from Russia all on the back of sanctions,” Juan Zarate, a senior advisor at the bipartisan think tank Center for Strategic and International Studies, told The Dispatch. “We’ve seen in the context of Crimea, at least, that sanctions alone can’t stop Russian tanks. We should certainly use them or threaten to use them. We should think about what our escalatory strategy is. We should be doing a whole host of things to impose costs on Russia.”
For that reason, the Pentagon has placed 8,500 troops on heightened alert that they may be sent to Europe to assist in defending North Atlantic Treaty Organization (NATO) allies. Officials stress they’ve not decided to deploy troops to Eastern Europe yet, and Biden has ruled out direct engagement to defend Ukraine from Russia. But the administration is contemplating more powerful deterrence options since diplomatic talks have produced no results.
Meanwhile, Senate Democrats are building support for a package of sanctions that would hit Russia in the event that Putin green-lights another invasion.
In the wake of the September 11, 2001, terror attacks, the United States expanded and formalized economic tools as a way to pressure terrorist groups and other bad actors. First introduced in a limited fashion, the use of such sanctions has expanded as they have become a recognized and respected tool of financial warfare.
The United States’ use of sanctions has grown by over 900 percent since 2000, according to the Treasury Department.
“The way I thought about it when I was at Treasury was you’re not going to be able to stop all commerce, all financing, every last dollar that a bad guy gets access to or has at his command,” Zarate said. “But you can make it harder, costlier, and riskier for America’s enemies to raise and move money around the world.”
Zarate authored a book, Treasury’s War, based on his time working on sanctions policy in the George W. Bush administration. While he called sanctions “incredibly powerful tools,” Zarate emphasized that their effectiveness depends on their implementation.
His warning to policymakers: Authoritarian states, especially those engaging in high profile geopolitical maneuvers tied to national identity or other deep interests, are likely willing to bear the cost of financial punishments from the United States, Europe, and other major economies. That dynamic is coming into starker relief, as Russia threatens Ukraine, and China has become more aggressive toward Taiwan in recent months.
“What policymakers have to consider is: What’s the cost-benefit analysis that the Russians or any other target is taking into account, and can sanctions help with that calculus? It’s likely, but can it do that alone?” Zarate said.
He listed a range of both positive and punitive measures that U.S. lawmakers can pair with sanctions, such as using export controls, stiffening enforcement of anti-money laundering measures, rules of disclosure in capital markets, and working with the private sector and global allies.
Administration officials are indeed considering hitting Russia with a slew of export controls if it invades Ukraine, the Washington Post reported Monday. The controls would affect Russia’s major banks and strategic industries such as its aerospace, maritime, and technology sectors. The controls in question would specifically apply to semiconductors, which most modern technology depends on, from cars to smartphones to video game consoles. The United States would also ask other countries and companies to stop exporting such goods to Russia.
The Treasury Department examined its own uses of sanctions in an October report, which focuses on modernizing the Treasury’s use of sanctions to tighten effectiveness going forward.
The report highlighted emerging challenges that could undermine sanctions’ efficiency. Among them: adversaries seeking to reduce their reliance on the U.S. dollar, cybercrime, digital currencies, and alternative payment platforms. “These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system,” the report reads.
The report recommended tailoring sanctions to make sure they are linked “to a clear policy objective.” To be most effective, sanctions should be easily understood, clearly communicated, enforceable, and reversible in response to changing behavior. Where possible, sanctions should be coordinated with allies to “magnify economic and political impact.”
Earlier this month, the Center for a New American Security, a bipartisan think tank, said that the Biden administration has carved out a “more cautious approach toward leading foreign policy strategy with the use of sanctions.”
Most notably, Biden chose not to impose sanctions on entities involved in the Nord Stream 2 pipeline, frustrating lawmakers of both parties last year. As we previously covered in Uphill, both Republicans and Democrats have skewered the 750-mile natural gas conduit, which connects Russia to Germany by way of the Baltic Sea. They fear it will heighten Germany’s reliance on Russian energy and make Europe more vulnerable to Russian political ploys. (Read this morning’s excellent TMD about Germany’s place in all of this here.)
Biden said he waived the sanctions because German leaders wanted the pipeline and he was attempting to boost the U.S.-German relationship.
Last week, Senate Democrats blocked a bill sponsored by Sen. Ted Cruz, Republican from Texas, that would have imposed sanctions on the Nord Stream 2 pipeline. Instead, the Biden administration and leading Democratic lawmakers have been rallying behind a bill spearheaded by Senate Foreign Relations Chair Bob Menendez.
The Defending Ukraine Sovereignty Act of 2022 would impose a punishing round of sanctions on key areas of Russia’s economy, particularly its banking and financial sector. The legislation also calls for the administration to review the sanctions it has waived on the Nord Stream 2 pipeline. But the bill is contingent on an invasion and direct escalation of hostilities on Moscow’s part, and enforcing the sanctions would require a declaration from the president.
Some Republican lawmakers have argued that the United States shouldn’t wait for an invasion to move forward with punitive measures. Florida Sen. Marco Rubio has proposed legislation that would directly sanction high-ranking Russian officials, including Putin, and prominent Russian companies. A group of GOP lawmakers has also brought forward a bill that would declare Russia a state sponsor of terrorism if it invades.
With the situation worsening, lawmakers may be more eager to find a path forward. According to Politico’s Andrew Desiderio, Menendez plans to use the recess week to work toward consensus on the legislation.
A delegation of seven U.S. senators visited Kyiv last week in an effort to show America’s solidarity with the country during the tense situation. According to Ukraine’s government, President Volodymyr Zelensky expressed to the lawmakers a need for “a preventive package of sanctions against Russia to counter aggression.”
Sen. Roger Wicker, a Republican from Mississippi who was on the trip, told The Dispatch that Putin’s aggression “has to be met with a forceful response or it will invite the same questioning of U.S. credibility that followed his attack on Crimea.”
“We should look for creative ways to arm our Ukrainian friends to the teeth and consider forward positioning NATO forces to deter Russia. The world is watching this test of our resolve,” he said.
Democratic Sen. Richard Blumenthal, who also went on the trip, agrees. He told Desiderio the United States should conduct a “massive airlift” of lethal weapons to Ukraine, and “we should impose those sanctions sooner rather than later, not wait for the invasion to start.”
Another bipartisan group of lawmakers has departed on another trip to Brussels and Kyiv this week, where they will meet with officials from NATO and European Union member states to discuss European security.
Moscow has denied nefarious intent toward its neighbor, even as trains hauling tanks and missiles steam toward Ukraine’s border, something diplomatic talks have not halted. Putin has also issued a list of demands to forestall further escalation. Among its core conditions, Moscow wants NATO to agree not to offer membership to Ukraine and Georgia, two former Soviet-era republics. It also wants NATO to scale back its military posture in Central and Eastern Europe to be further away from Russia’s border. NATO has called these conditions non-starters.
The situation is familiar: When Biden was vice president in 2014, Russia seized Crimea and backed a separatist effort in two Ukrainian provinces and fighting estimated to have caused over 13,000 deaths.
“No one wants war with Russia. But there have to be serious consequences if one nation plans to invade another,” said Rep. Elissa Slotkin, a Michigan Democrat, after attending a Defense Department briefing last week on the situation. “The costs must include stinging sanctions against Putin and his closest cronies, but that’s not enough.”
On the Floor
Nothing. Both chambers are out this week.
Presented Without Comment
Worth Listening
Capitol Police officer Eugene Goodman, who lured rioters away from the Senate chamber on January 6, 2021, and redirected Sen. Mitt Romney from the attackers, spoke about his experience publicly for the first time since that day. The podcast episode is available here.
Goodman said it could have “easily been a bloodbath, so kudos everybody there that showed a measure of restraint with regards to deadly force, because it could have been bad.”
Of Note
Jan. 6 committee has spoken with former Trump attorney general Barr, chairman says
Heidi Heitkamp talks filibuster, Biden’s first year
Momentum builds for limiting lawmakers’ investments
The scramble to resettle allies from Afghanistan
Reports on Newman, Lamborn detail ethics allegations
