Implications of EU Economic and Financial Sanctions against Russian Federation

Abstract

In view of the annexation of Crimea by the Russian Federation and the provocation of the conflict in Donbas in 2014, the EU adopted and implemented Council Regulation (EU) No 833/2014 of 31 July 2014 in reaction to Russia’s measures undermining Ukraine’s territorial integrity as well as the sovereignty and independence of the country. This period is characterized by erosion of bilateral trade and economic relations between the EU and Russia. After the beginning of Russia’s war against Ukraine in February 2022, the European Union adopted a new series of economic and financial sanctions towards Russia: restrictions on trade; a SWIFT ban for certain Russian banks; restrictions on Russia’s access to the EU’s capital and financial markets and services; a ban on transactions with the Russian Central Bank and others. In the autumn of 2022 the conflict further escalated with the so-called “partial mobilization” in Russia and the further unlawful referenda for annexation of Ukrainian territories. Two years later (February 2024), the war is still raging and the European Union continues its policy of adopting new packages of sanctions against Russia.

The aim of this paper is to analyze the effects of these sanctions on the Russian Federation as well as the implications of the contra-measures from the Russian Federation towards the European Union.

JEL: F51