FACTBOX – 20 years of Western sanctions on Russia
Russia currently faces thousands of sanctions, but various estimates show its economy continues to grow
Moscow, Russia (Photo by Sefa Karacan)
- Russia has adapted to years of sanctions, buoyed by internal reforms and strong domestic demand
MOSCOW
Western sanctions against Russia have reached an all-time high in both scale and scope, yet the country’s economy continues to defy expectations.
On July 18, the EU adopted its toughest sanctions package yet. The new measures impose a lower price cap on Russian oil exports, block EU ports to Russian tankers, and extend restrictions to entities in third countries, including China, linked to Russia’s military-industrial complex.
These steps come amid fresh warnings from US President Donald Trump, who last Friday threatened 100% tariffs on any nation continuing trade with Moscow unless Russia and Ukraine achieve “significant progress” in peace talks within 50 days.
Despite the intensifying pressure, the World Bank and International Monetary Fund now rank Russia as the world’s fourth-largest economy by purchasing power parity – a development that has only deepened the strategic dilemma facing Western leaders.
Russia’s economy, according to various estimates, has proven surprisingly resilient, buoyed by internal reforms and strong domestic demand. Yet its fortunes remain tied to external factors, leaving the outlook unstable and vulnerable to shocks.
While the country has so far absorbed what experts say are thousands of overlapping sanctions, many in the West continue to hope that its economy could be approaching a tipping point.
Long history of pressure
Sanctions targeting Russia have gradually expanded over more than two decades.
Initial restrictions in the late 1990s and early 2000s were often narrow in scope, targeting individuals accused of corruption or human rights abuses. The US Magnitsky Act of 2012 was one such example, imposing personal sanctions after the death of Russian lawyer Sergei Magnitsky in custody.
The sanctions regime escalated dramatically following what Russia calls the “incorporation” of Crimea in 2014, but what the international community, including Western nations, consider illegal annexation. Between 2014 and 2015, the US and EU imposed sweeping restrictions on top Russian officials, politicians and business figures. Their assets were frozen, and property seized in Western jurisdictions.
Several major Russian financial institutions and corporations were excluded from international capital markets, while bans on the transfer of dual-use and high-tech equipment hit the energy and defense sectors particularly hard.
The measures limited foreign investment and curbed growth potential.
Between 2018 and 2020, sanctions deepened. Amendments to US legislation, such as Countering America’s Adversaries Through Sanctions Act (CAATSA), aimed to weaken Russia’s defense capabilities and financial sector.
At the same time, restrictions were introduced on Russian activity in the Arctic and even on space cooperation.
Turning point in 2022
The most sweeping measures were imposed after Russia’s “special military operation” in Ukraine in February 2022.
Key Russian banks were disconnected from the international SWIFT payment system. Major payment processors such as Visa and Maestro pulled out of the country, cutting Russian citizens off from many foreign goods and services.
Western states also froze approximately $300 billion worth of the Central Bank of Russia’s reserves held in their financial systems.
They also imposed sweeping export restrictions on advanced technology, luxury goods, and many other products to Russia, while also enacting bans and limits on Russian energy imports.
Sanctions structure
Generally, sanctions can be divided into several groups. Economic sanctions ban export and import of certain categories of goods and services between Western countries and Russia, including stopping purchases of Russian products like oil and gas, denying access to credits, and investments from Western states.
Western sanctions have targeted the Russian financial system by disconnecting an increasing number of Russian banks from the international SWIFT payment network and freezing the assets of sanctioned companies and state institutions in Europe and the US.
Many foreign banks and financial institutions – including those in countries traditionally aligned with Russia – have also limited or ceased providing banking services to Russian citizens abroad.
Under the threat of secondary sanctions, several Central Asian nations and other Russian allies have restricted or suspended the use of Russia’s MIR payment system and often decline to issue new bank cards to Russian nationals.
Diplomatic sanctions have led to the expulsion of dozens of Russian diplomats across Europe and North America, while ties between foreign ministries have been reduced to minimal levels.
In the defense sector, joint ventures were terminated, and restrictions have been imposed on the export of high-tech military components to Russia. Russian businesses have also been excluded from projects of international space cooperation.
Cultural and sporting sanctions continue to sideline Russia from international events. Athletes often compete only under neutral status, and Russian teams are banned from many competitions.
Access to information has also been curtailed. Russian media outlets have been blocked across social platforms in Europe and North America. Inside Russia, users face restricted access to services such as ChatGPT and Grammarly.
Some countries have also imposed individual sanctions on Russian nationals – including visa bans, asset freezes and even property seizures – though the extent and legality of such actions vary.
2025: Toughest measures yet
The EU’s 18th sanctions package, officially adopted last week after prolonged internal debate, represents the most comprehensive set of restrictions to date. It expands the bloc’s economic pressure campaign with a multi-pronged approach.
The new measures ban the purchase of oil products refined from Russian crude and reduce the price cap on Russian oil exports from $60 to $47.6 per barrel. They also restrict the re-export of Russian oil through third countries, with exceptions granted to Canada, Norway, Switzerland, the UK, and the US.
Financially, the package mandates a complete halt in transactions with Russia’s Direct Investment Fund (RDIF) and extends sanctions to include companies involved in Russia’s military-industrial complex – some of them located in China.
Fourteen individuals and 41 companies were also added to the sanctions list, bringing the total number of designated persons and entities to over 2,500.
In the banking sector, the EU ordered an end to European financial institutions’ involvement in any projects linked to Russian financial organizations. It also increased scrutiny of Russian banking activities, particularly in relation to international payment systems.
Further tightening the screws, EU ports were closed to Russian tankers listed under sanctions, a move expected to severely complicate the shipment of hydrocarbons.
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