As Russia braces for battle, sanctions can still be a deterrent

As U.S. Secretary of State Anthony J. Blinken meets with Russian Foreign Minister Sergey V. Lavrov in Geneva today, uncertainty and pessimism dominate.  

Some believe that the failure of last week’s meetings with the Russians leaves the Biden administration with arming Ukraine — quickly and heavily — as the best option to deter the seemingly inevitable Russian military invasion. In fact, while promising that Russian action would be costly to them, President Biden himself stated that he expected Putin would invade Ukraine.   

But both the pundits and the president may have sold short the power of these promised costs to provide a much-needed eleventh hour deterrent to Russian action. Developed in sync with the White House, these punishments are a devastating sanctions package authored primarily by Sen. Bob Menendez, (D-N.J.) that comes to the Senate floor for a vote today or Monday. These measures are powerful, credible and bite quickly. They may well be sufficient to prompt Putin to hit pause on the military option and engage further with a diplomatic resolution of this crisis.  

The scope, diversity and clarity of these sanctions preview distinctive pain aimed at Russian leadership, in both the political and military sectors, including Putin himself. The U.S. Treasury will be more far-reaching in locking down elite personal assets than earlier sanctions imposed for interference in U.S. elections or cyberattacks.  Similarly, strong asset freezes on banks and financial institutions hit the Russian economy in a very sensitive area and at a particularly bad time in Russian economic performance.    

This straight jacketing of the banking sector will send reverberations through the entire economic sphere, most immediately triggering considerable inflation. These sanctions will deliver a near paralyzing gut punch that has the potential to change the calculus of Russian commitment to invasion.   

An additional cause for optimism comes from how the research on sanctions success correlates well with elements of the Menendez bill. For example, and somewhat ironically, research shows that some of the most substantial concessions from a potential target come when the threat of sanctions has become clear, yet concessions decrease after the sanctions are imposed.   

Additionally, while stronger sanctions at the start improve attaining stated goals, a promise to ratchet up sanctions that are clearly specified combines threat and reality to produce some desired diplomatic outcomes. Senate actions that state any military action against Ukraine will lead to significant sanctions against Russian companies engaged in international financial exchanges comprise such strong, second-stage sanctions.    

The U.S. also appears ready to resort to the very rare action of shutting down Russian access to the SWIFT financial exchange messaging system. Such access is critical to the daily work of credit card companies and banks. In the sanctions world, this measure is called ‘the nuclear option’ thus indicating its power and exceptional character.  

On balance then, Blinken has a stronger bargaining position in his Geneva meeting than meets the public eye. U.S. sanctions are designed to hit broadly and deeply, immediately and convincingly, and the Russians know this. The mobilization of these sanctions as a deterrent to forestall a Russian military attack on Ukraine is both prudent and powerful. And these measures can open more space for a diplomatic resolution of this crisis.  

George A. Lopez is professor emeritus at the Kroc Institute, University of Notre Dame and author/editor of six books and 40 articles on economic sanctions. In 2010-11 he served on the United Nations Panel of Experts for monitoring sanctions on North Korea.