Will the Navalny sanctions work?

The Biden administration announced sanctions against Russia involving five hundred new entities and individuals following the death of Russian opposition leader Navalny. The news of Navalny's death (or killing) in prison, coinciding with the second anniversary of the Ukraine war, came at a time when the American Congress failed to pass a $60 billion aid package for Ukraine. President Biden met with Navalny's wife and daughter and harshly criticized Russian President Putin for Navalny's death. Biden had previously threatened repercussions if anything happened to Navalny. While Biden's decision to refrain from seizing Russia's $300 billion in Western banks suggests he's not ready for a full-scale confrontation with Putin, his announcement of new sanctions indicates a path of accountability.

The effectiveness of the new sanctions package, announced amidst increasing political pressure to respond forcefully to Navalny's death, remains to be seen. While previous sanctions have inflicted heavy financial losses on Russia, they have not forced Putin to back down on Ukraine. It's unrealistic to expect different results from the new sanctions. The follow-up and enforcement of sanctions take time and don't mean much for firms and individuals in the West who don't do business with Russia. Although theoretically possible to coerce Moscow through threats and sanctions, it's evident that it's not enough to persuade Putin to end the war in Ukraine. The Biden administration has long been showing the stick without the carrot, but even in wielding the stick, it's not exactly bold.

ENERGY EQUATION

The Biden administration is hesitant to take some critical steps that would truly hurt Russia. Despite effective enforcement of the roughly two thousand sanctions announced so far, Russia, which can continue selling oil to many countries like China and Iran, isn't easily cornered. The European Union and the United States have refrained from buying oil from Russia and instead set a cap of $60 per barrel to compel Russia to sell oil at a price close to its cost, thereby limiting its influence on global energy markets. Otherwise, a global energy crisis could trigger a new global economic crisis. In the midst of an energy crisis driving gasoline prices to record levels, the administration's reluctance to lean on domestic hydrocarbon production is influenced by the opposition to it within the United States. Biden has refrained from issuing new permits for oil production in the context of climate change concerns among Democrats. If the U.S. had removed environmental barriers to oil and gas production as it did during the Trump era, it could have partially averted the global energy crisis. Unable to take this risk, the administration had to allow Russia to stay in energy markets. Moreover, they don't have the power to completely remove Russia from energy markets as countries like China, India, and Iran wouldn't allow Russia to be besieged in this way.

SEIZING $300 BILLION

Biden, who leads Western support to Ukraine with the slogan "aid until the end," has reached a point where the sea seems to have run dry. The Senate approved a new aid package, but Mike Johnson, the Trump-influenced leader of the House of Representatives, is unwilling to consider aid to Ukraine. It seems difficult for Biden to come up with a formula and convince Republicans, as Trump wouldn't want to give him a political victory on this issue. In this equation weakening Biden's hand in pressuring Russia, the issue of seizing Russia's $300 billion in the West may come to the fore. Biden fears that such a step could trigger capital flight and deprive him of another tool to pressure Russia. However, it's clear that it's necessary to go beyond ineffective sanctions to get Moscow's attention.

All this once again demonstrates that the Biden administration lacks a strategy to end the war. Sanctions and efforts to isolate Russia will not yield results without the support of countries like China and India. Seizing Russia's money in the West could further alienate these powers from the West because it would signal that such investments are not safe in the West. Those advocating for using these funds for Ukraine's resistance and reconstruction argue that the legal basis for seizing these funds has been established with Russia's invasion attempt and war. However, the Biden administration doesn't seem close to taking this step. Perhaps it wants to keep this as a card for a later stage or possible negotiations. However, the events of the last two years have shown that without a realistic peace plan, the war cannot be ended by merely pressuring Russia. In this context, it can be said that Biden's Navalny sanctions are designed to convey an increased message of pressure on Russia, but the likelihood of making a critical impact on ending the war is very low.