The West got its sanctions on Russia wrong by Arvind Subramanian & Josh Felman

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Russia’s illegal invasion of Ukraine can and must be countered with a principled, effective, just and legal economic response. The West can achieve such a response by replacing its current sanctions with collective restrictions on the export of goods to Russia.

PROVIDENCE – The West has responded to Russia’s invasion of Ukraine with sanctions of unprecedented severity and scope. According to the standard of proportionality, the reaction of the United States, the European Union and their allies seems appropriate. Serious international aggression demands a serious response. But by the standards of consistency, efficiency and fairness, it is far from clear that the West has chosen the right strategy. Governments may need to rethink the design of the sanctions regime.

Western commentary so far has focused on the strength of punitive measures. These have targeted trade, limiting technology exports and imports of Russian oil and gas; finance, by preventing transactions through designated Russian banks; official assets, by freezing a large part of the foreign exchange reserves of the Russian central bank; foreign investment, forcing Western companies to cease their activities in Russia; and personal property, expropriating the property of Russian oligarchs and officials.

Many have argued for even harsher penalties. The EU, for example, is currently trying to reach consensus on phasing out Russian oil imports by the end of 2022, on the grounds that payments for such supplies fund the Kremlin’s war machine. As Russia steps up its attacks on Ukraine, the West is likely to step up its response as well.

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