Beyond the West: Countries Joining Sanctions on Russia

Since the Russian invasion of Ukraine on 24 February, a worldwide coalition of states has joined together to issue an unprecedented level of coordinated sanctions and export controls on Russia. The participation of states that do not traditionally align with Western sanctions underscores the global impact these sanctions will have on Russia.

While the West has been the main driver of these sanctions, sanctions issued by the United States, European Union, United Kingdom, Australia, and Canada are well documented. The broad alignment among third-party countries with the usual sanctioning powers warrants a closer look. It also means industry must further extend its compliance focus beyond traditional jurisdictions.

East Asia

Japan, Taiwan, Singapore, and South Korea have all joined in the wider efforts to coordinate economic statecraft on Russia. China, whose largesse Putin counted on blunting the onslaught of sanctions, has tried to stake out a more ambiguous position. The participation of East Asian states in the Russia sanctions and export control regime is especially notable for its implications for technology control.

As a G7 member, Japan has been most closely aligned with Western sanctions policy, though not usually to this extent. In addition to supporting the strategic removal of certain Russian entities from SWIFT, Japan has issued targeted sanctions reflective of the consensus model. It has also launched export controls for Russian military end-users and on controlled items like semiconductors.

Singapore, Taiwan, and South Korea have likewise taken a more proactive approach, targeting financial transactions with Russia and implementing broad export control prohibitions. Previously, the sanctions and export control measures undertaken by these three countries had been limited in comparison to the West.

Export controls, more so than asset freezes and travel bans, lend outsized weight to East Asian coercion against Russia. With its invasion of Ukraine, Russia has alienated key suppliers of semiconductors and other items critical to the development of high technologies and for military supply. Even China has hesitated at overt support of Russia, reportedly unwilling to supply much-needed aircraft parts nor to offset some of the financial pain Russia is suffering. East Asian states’ pressure on Russia is significant, but for industry only heightens the complexity of compliance.

Norway and Switzerland

While the Swiss have generally preferred to chart a parallel yet independent path with its sanctions, Switzerland surprised many observers with its speedy alignment with EU sanctions on Russia. The Decree on measures related to the situation in Ukraine conjoined Swiss sanctions with those of the EU and prohibited all dual-use exports to Russia, regardless of end-user. Nevertheless, Switzerland’s Federal Council announced these actions are in line with the Swiss principle of neutrality. Norway, the lone Nordic holdout from the EU, will also be backing EU on sanctions.

The Russian invasion of Ukraine has managed to push non-aligned European states into partnership with the EU and the rest of the West.

New Zealand

Unlike Australia which has a dedicated legal basis for autonomous sanctions, New Zealand has had to expand its powers to address the Russian invasion. This began with an export control ban on military and dual-use goods on 25 February. New Zealand took a further step with the passage of the Russia Sanctions Act on 11 March, which the government was careful to stress was “not an autonomous sanctions regime.” This is a matter of interpretation, but nonetheless, Russia’s invasion is causing states previously focused solely on U.N. sanctions implementation to enhance their capabilities.

Notable Abstentions

Industry must also pay attention to which states attempt to stay aloof to the larger sanctions coalition. Holdouts are doing so due to precarious geopolitical balancing, but the pressure will certainly grow to choose sides as the conflict worsens.

Israel relayed intentions not to join the “Western coalition” and impose sanctions against the Russian regime due to Russia’s influence on Iran. However, on 14 March, the Israeli foreign minister made clear that the country will not help actors bypass sanctions put in place against Russia. It remains doubtful that Israel will fully implement equivalent sanctions to the West.

Turkey, too, has taken a more active stance outside of implementing new sanctions and export controls. Unlike other NATO members which actively pursued sanctions, it has pledged to implement wartime powers in the Montreux Convention to limit Russian naval access to the Black Sea. Still, Turkish officials have stressed that it does not plan to sanction Russia.

India, which historically maintained cordial relations with Russia, has been allegedly considered a target for Countering America’s Adversaries Through Sanctions Act (CAATSA) sanctions by the United States for its purchase of the Russian S-400 missile system.

Certain Latin American states like Mexico and Brazil have sought to remain distant from the Western sanctions regime. Mexico had initially drafted regulations to ban exports of dual-use goods to Russia, but officials backed away, saying such a move was “not necessary.” Brazil instead took a harder line by criticizing Western sanctions.

It’s notable that many countries abstaining from outright support of Russia sanctions had long enjoyed cooperative relations with Putin’s Russia. For the entities operating in states outside the Russia sanctions regime, as the international commitment grows to enhance the pressure, the fallout from geopolitical balancing could trickle down to them.

Conclusions

The unified front implementing sanctions and export controls on Russia can arguably be said to exert even more pressure than during the Cold War. This widespread rejection of Russia’s invasion of Ukraine means that jurisdictions that traditionally do not levy strenuous sanctions and export controls must be reassessed in terms of compliance. Uncertainty for industry is only growing as the crisis persists and the leviathan of sanctions and export controls grows more complex.

There arises another issue beyond the tangled web of sanctions and export controls that grows by the day. The abstaining countries that hope to stay both in the good graces of the West and Russia may soon be confronted with choosing sides. The price of keeping ties in place with Russia could mean being ensnared along with it.

Now is the time for industry to ensure understanding of their global compliance responsibilities.

DISCLAIMER

The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials herein are for general informational purposes only.