Critical analysis of the effectiveness of EU financial sanctions against the Russian Federation
cytuj
pobierz pliki
RIS BIB ENDNOTEChoose format
RIS BIB ENDNOTEPublication date: 26.04.2024
Internal Security Review, 2024, Issue 30 (16), pp. 353 - 383
https://doi.org/10.4467/20801335PBW.24.015.19617Authors
Critical analysis of the effectiveness of EU financial sanctions against the Russian Federation
The article focuses on the issue of international sanctions of a financial nature in the context of, in particular, the challenges to their effectiveness generated by the cryptocurrency market. An essential point of reference for this analysis is the current case of sanctions imposed by the Council of the European Union (supported by the application of complementary sanctions by part of the international community) on the Russian Federation in relation to that country’s military aggression against Ukraine. The aim of this article is to show different perspectives on the assessment of the effectiveness of sanctions and, in particular, to identify the sources why, in a key number of cases, while weakening the economic potential of the sanctioned state, they nevertheless fail to achieve the original objective of their imposition, i.e. the deterrence of military action. In this subject, the axis of interest is the current and prospective impact of blockchain-based financial solutions on the creation of an important loophole in the sanctions regime to eliminate or marginalise the effects of international financial sanctions. The issue is also assessed through the prism of the crypto-asset market regulation entering into force in the European Union in the near future and the implementation of the so-called travel rule for cryptocurrency transactions.
Avgouleas E., Seretakis A., How Should Crypto Lending Be Regulated Under EU Law?, “European Business Organization Law Review” 2023, vol. 24, n. 3, pp. 421–438. https://doi.org/10.1007/s40804-023-00293-3.
Becker K., Blockchain Matters – Lex Cryptographia and the Displacement of Legal Symbolics and Imaginaries, “Law and Critique” 2022, vol. 33, pp. 113–130. https://doi.org/10.1007/s10978-021-09317-8.
Bierzanek R., Symonides J., Prawo międzynarodowe publiczne (Eng. Public international law), Warszawa 2003.
Demarais A., Backfire: How Sanctions Reshape the World Against U.S. Interests, New York 2022.
Givant S., Halmos P., Introduction to Boolean Algebras (Undergraduate Texts in Mathematics), New York 2009.
Hufbauer G.C. et al., Economic Sanctions Reconsidered: Supplemental case histories, Washington 2007.
Maia G., Vieira dos Santos J., MiCA and DeFi (“Proposal for a Regulation on Market in Cryptoassets” and “Decentralised Finance”), “Revista Electrónica de Direito” 2022, vol. 28, no. 2, pp. 57–82.
Opałek K., Wróblewski J., Prawo. Metodologia, filozofia, teoria prawa (Eng. Law. Methodology, philosophy, theory of law), Warszawa 1991.
Opałek K., Wróblewski J., Zagadnienia teorii prawa (Eng. Issues in legal theory), Warszawa 1969.
Pape R.A., Why Economic Sanctions Do Not Work, “International Security” 1997, vol. 22, no. 2, pp. 90–136.
Pease M., Lamport L., Shostak R., The Byzantine Generals Problem, “ACM Transactions on Programming Languages and Systems” 1982, vol. 4, n. 3, pp. 382–401. https://doi.org/10.1145/357172.357176.
Wilkens R., Falk R., Smart Contracts. Grundlagen, Anwendungsfelder und rechtliche Aspekte, Wiesbaden 2019.
Zetzsche D.A., Arner D.W., Buckley R.P., Decentralized Finance, “Journal of Financial Regulation” 2020, vol. 6, n. 2, pp. 172–203. https://doi.org/10.1093/jfr/fjaa010.
Annual value of international reserves of Russia from 2012 to 2022, by type, Statista, https://www.statista.com/statistics/1049298/russia-international-reserves-value-by-type/ [accessed: 5 III 2024].
Bank of Russia foreign exchange and gold asset management report, Bank of Russia, Moscow 2022, https://www.cbr.ru/Collection/Collection/File/39685/2022-01_res_en.pdf [accessed: 5 III 2024].
Bitcoin Mining Map, Cambridge, CCAF, https://ccaf.io/cbnsi/cbeci/mining_map [accessed: 5 III 2024].
BRICS Information Portal, http://infobrics.org/ [accessed: 5 III 2024].
Busch K.E., Tierno P., Russian Sanctions and Cryptocurrency, Congressional Research Service, 4 V 2022, https://crsreports.congress.gov/product/pdf/IN/IN11920 [accessed: 5 III 2024].
Buterin V., Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform, 2014, https://www.weusecoins.com/assets/pdf/library/Ethereum_white_paper-a_next_generation_smart_contract_and_decentralized_application_platform-vitalik-buterin.pdf [accessed: 5 III 2024].
Central Bank Digital Currencies. Building Block of the Future of Value Transfer, Deloitte, https://www2.deloitte.com/content/dam/Deloitte/in/Documents/financial-services/in-fs-cbdc-noexp.pdf [accessed: 5 III 2024].
Central bank digital currencies: foundational principles and core features, Bank for International Settlements, 2020, https://www.bis.org/publ/othp33.pdf [accessed: 5 III 2024].
Cryptocurrencies: a way to evade sanctions?, BAFFI – Centre on Economics, Finance and Regulation, https://baffi.unibocconi.eu/research-units/mints-alternative-monies/newsletter/issue-0/cryptocurrencies-way-evade-sanctions [accessed: 5 III 2024].
Crypto-assets relevant pro-vision: Article 5b(2) of Council Regulation (EU) No 833/2014 – frequently asked questions, Council of the EU, 21 III 2023, https://finance.ec.europa.eu/system/files/2023-03/faqs-sanctions-russia-crypto_en.pdf [accessed: 5 III 2024].
Decentralised Finance. Principles for building a robust digital economy, AFME, 6 VI 2023, https://www.afme.eu/Portals/0/DispatchFeaturedImages/AFME%20DeFi%20Whitepaper.pdf [accessed: 5 III 2024].
Field J., Sanctions, Russia and ‘crypto crime’, CoinGeek, 7 IV 2023, https://coingeek.com/sanctions-russia-and-crypto-crime/ [accessed: 5 III 2024].
Izenman K., The Other Side of the Digital Coin: Central Bank Digital Currencies and Sanctions, RUSI, 26 V 2021, https://rusi.org/explore-our-research/publications/commentary/other-side-digital-coin-central-bank-digital-currencies-and-sanctions [accessed: 5 III 2024].
Karwowski K., Jeden statek - różni kapitanowie. Grupa BRICS po rozszerzeniu (Eng. One ship - different captains. The BRICS group after enlargement), Instytut Nowej Europy, 20 III 2024, https://ine.org.pl/jeden-statek-rozni-kapitanowie-grupa-brics-po-rozszerzeniu/ [accessed: 26 III 2024].
Leali G., France not opposed in principle to cutting Russia from SWIFT: Bruno Le Maire, Politico, 25 II 2022, https://www.politico.eu/article/Frances-le-maire-not-against-cutting-russia-out-of-swift/ [accessed: 5 III 2024].
Pape R.A., entry on LinkedIn, https://uk.linkedin.com/posts/robert-pape_someone-asked-my-view-on-how-sanctions-are-activity-6970475273985171456-6ora [accessed: 5 III 2024].
Pismennaya E., Russia Values Local Crypto at $200 Billion as Rules Near, Bloomberg, 1 II 2022, https://www.bloomberg.com/news/articles/2022-02-01/russia-values-local-crypto-market-at-200-billion-as-rules-near#xj4y7vzkg [accessed: 5 III 2024].
Press release from the European Commission: Ukraine: EU agrees to extend the scope of sanctions on Russia and Belarus, 9 III 2022, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1649 [accessed: 5 III 2024].
Sanctions and Restrictions Against Russia in Response to its Invasion of Ukraine, Ministry of Foreign Affairs Singapore, 5 III 2022, https://www.mfa.gov.sg/Newsroom/Press-Statements-Transcripts-and-Photos/2022/03/20220305-sanctions/ [accessed: 5 III 2024].
Szabo N., Smart Contracts, 1994, https://www.fon.hum.uva.nl/rob/Courses/Information-InSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/smart.contracts.html [accessed: 5 III 2024].
Szabo N., Smart Contracts: Building Blocks for Digital Markets, 1996, https://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/smart_contracts_2.html [accessed: 5 III 2024].
Wilson T., Rouble-crypto trading soars as sanctions hit Russian currency, Reuters, 28 II 2022, https://www.reuters.com/markets/europe/rouble-crypto-trading-soars-sanctions-hit-russian-currency-2022-02-28/ [accessed: 5 III 2024].
Wiśniewska I., Russian economy in 2022. Adaptation and a growing budget gap, OSW, 16 II 2023, https://www.osw.waw.pl/en/publikacje/osw-commentary/2023-02-16/russian-economy-2022-adaptation-and-a-growing-budget-gap [accessed: 5 III 2024].
Wpływ sankcji na rosyjską gospodarkę (Eng. The impact of sanctions on the Russian economy), Rada UE, https://www.consilium.europa.eu/pl/infographics/impact-sanctions-russian-economy/ [accessed: 5 III 2024].
Wright A., De Filippi P., Decentralized Blockchain Technology and the Rise of Lex Cryptographia, preprint, SSRN, 12 III 2015, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2580664 [accessed: 5 III 2024]. http://dx.doi.org/10.2139/ssrn.2580664.
Wright C.S., Bitcoin Is Anything BUT Anonymous, Bitcoin & Blockchain Tech, 1 IX 2019, https://craigwright.net/blog/bitcoin-blockchain-tech/bitcoin-is-anything-but-anonymous/ [accessed: 5 III 2024].
В ЦБ сообщили о 70% внутрироссийского трафика у национального аналога SWIFT, Известия, 3 VII 2023, https://iz.ru/1538263/2023-07-03/v-tcb-soobshchili-o-70-vnutrirossiiskogo-trafika-u-natcionalnogo-analoga-swift [accessed: 5 III 2024].
ЦБ предложил дать зарубежным банкам доступ к цифровому рублю с 2025 года, RBC.ru, 10 X 2023, https://www.rbc.ru/finances/10/10/2023/6523e87b9a7947b24f71b430 [accessed: 5 III 2024].
Российский аналог SWIFT распространяется на Восток, News.Ru, 27 I 2024, https://news.ru/economics/rossijskij-analog-swift-rasshiryaet-svoe-vliyanie [accessed: 5 III 2024].
Council Regulation (EU) 2024/745 of 23 February 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situ- ation in Ukraine (Official Journal of the EU L of 23 February 2024).
Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on cryptocurrency markets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (Official Journal of the EU L 150/40 of 9 June 2023).
Regulation (EU) 2023/1113 of the European Parliament and of the Council of 31 May 2023 on information accompanying funds transfers and certain cryptoassets and amending Directive (EU) 2015/849 (Official Journal of the EU L 150/1 of 9 June 2023).
Council Regulation (EU) 2022/1904 of 6 October 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (Official Journal of the EU LI 259/3 of 6 October 2022).
Council Regulation (EU) 2022/576 of 8 April 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s destabilising action in Ukraine (Official Journal of the EU L 111/1 of 8 April 2022, as amended).
Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (Official Journal of the EU L 229/1 of 31 July 2014, as amended).
Council Regulation (EU) No 269/2014 of 17 March 2014 on restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (Official Journal of the EU L 78/6 of 17 March 2014, as amended).
Council Regulation (EU) No 359/2011 of 12 April 2011 concerning restrictive measures direc- ted against certain persons, entities and bodies in view of the situation in Iran (Official Journal of the EU L 100/1 of 14 April 2011, as amended).
Council Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures in view of the situation in Belarus and its involvement in Russia’s aggression against Ukraine (Official Journal of the EU L 134/1 of 20 May 2006, as amended).
Act of 13 April 2022 on special solutions to prevent support for aggression against Ukraine and to protect national security (consolidated text of Journal of Laws 2023, item 1497, as amended).
Act of 6 March 2018 - Entrepreneurs’ Law (consolidated text of Journal of Laws 2023, item 221, as amended).
Act of 1 March 2018 on the prevention of money laundering and terrorist financing (consolidated text of Journal of Laws 2023, item 1124, as amended).
Act of 19 August 2011 on payment services (consolidated text of Journal of Laws 2022, item 2360, as amended).
Act of 21 July 2006 on financial market supervision (consolidated text of Journal of Laws 2023, item 753, as amended).
Act of 23 April 1964 - Civil Code (consolidated text of Journal of Laws 2023, item 1610, as amended).
Федеральный закон от 31.07.2020 N 259-ФЗ “О цифровых финансовых активах, цифровой валюте и о внесении изменений в отдельные законодательные акты Российской Федерации”, Kremlin.ru, http://www.kremlin.ru/acts/bank/45766/page/1 [accessed: 5 III 2024].
Федеральный закон от 14.07.2022 № 331-ФЗ “О внесении изменений в отдельные законодательные акты Российской Федерации и о приостановлении действия отдельных положений статьи 5.1 Федерального закона «О банках и банковской деятельности»”, http://publication.pravo.gov.ru/Document/View/0001202207140083?index=1 [accessed: 5 III 2024].
Федеральный закон от 24.07.2023 № 339-ФЗ “О внесении изменений в статьи 128 и 140 части первой, часть вторую и статьи 1128 и 1174 части третьей Гражданского кодекса Российской Федерации”, http://publication.pravo.gov.ru/document/0001202307240009 [accessed: 5 III 2024].
Федеральный закон от 24.07.2023 № 340-ФЗ “О внесении изменений в отдельные законодательные акты Российской Федерации”, http://publication.pravo.gov.ru/Document/View/0001202307240024 [accessed: 5 III 2024].
Information: Internal Security Review, 2024, Issue 30 (16), pp. 353 - 383
Article type: Original article
Titles:
Published at: 26.04.2024
Article status: Open
Licence: CC-BY-NC-SA
Copyrights:
Percentage share of authors:
Article corrections:
-Publication languages:
EnglishView count: 122
Number of downloads: 157