Multipolar World

From the extraterritoriality of sanctions to the power of European citizens

Jorge Costa Oliveira

One aspect that will differentiate the Russian war in Ukraine from previous wars will be the sanctions and their nature. The EU applies sanctions to implement UN Security Council resolutions or to further the objectives of the Common Foreign and Security Policy (CFSP) (the promotion of international peace and security, the prevention of conflicts, support for democracy, the rule of law and human rights and the defense of the principles of international law). In the EU, there is a legal framework to apply various types of sanctions targeting members of government bodies, companies, groups, organizations or individuals from countries that violate international law. In the case of the EU, sanctions have been the usual ones: (i) arms embargoes; (ii) admission restrictions (travel bans); (iii) asset freezing; (iv) other economic measures, such as restrictions on imports and exports. Following the Russian Federation’s intervention in Ukraine in 2014, the EU has applied several sanctions on Russia.

The US also applies (since 2017 at least) relevant sanctions on Russia based on the “Countering America’s Adversaries Through Sanctions Act” (Public Law 115-44) (CAATSA). The main difference with the US sanctions is that many of them have an extraterritorial effect, which means that secondary sanctions may be imposed on non-US persons who facilitate payments / breach of embargoes / access to assets to a blocked entity. The extraterritorial effect of US sanctions has, moreover, led the EU to take measures to avoid them, considering them illegal and unilaterally imposed.

The Russian invasion of Ukraine will lead to a change in Europeans’ stance in this domain. European public opinion is afire and deeply outraged by the daily images of Russian bombings of civilians. Pressure on European policymakers will quickly produce two results: on the one hand it will create an extension to the scope of sanctions (and the train has yet to leave the station); on the other hand, it will lead them to attribute extraterritorial effects to EU sanctions on Russia.

European public opinion finds it unacceptable that Russian oligarchs are able to continue operating from countries that are largely dependent on the EU (Switzerland quickly realized this). Or that Russian banks excluded from the SWIFT system can overcome this sanction by triangulating operations with the connivance of third-country banks (some Chinese banksseem to have already realized this). On the other hand, people fired up by what they consider morally unacceptable, quickly become Manicheans – either with us or against us. Countries that think it’s possible to have a neutral stance and the best of both worlds – to maintain access to cheap Russian raw materials (oil, gas, nickel, copper) while maintaining access to European and American consumer markets – will find that the power of European and American citizens is exercised more quickly than that of their governments, with boycotts of products from these countries. But many people, including decision makers, in Turkey, India and China don’t seem to have realized what may be on its way. / jorgecostaoliveira 

Categories Multipolar World Opinion