Date of this Version
Cornhusker Economics April 5, 2017
In 2014 the United States, European Union (EU), and several other countries imposed economic sanctions on Russia in response to its annexation of Crimea and support for separatist rebels in eastern Ukraine (Nelson, 2017; Europa, 2017). Prior to the 1990s, the use of economic sanctions to challenge the behavior of foreign governments was fairly rare as the target country could easily turn to the cold-war adversary of the sanctioning country to avoid their effects. With the end of the Cold War, sanctions, usually comprehensive in nature restricting economic relations across the board, became a major foreign policy tool. Because comprehensive sanctions had severe negative impacts on ordinary citizens, the international community has shifted its approach to “targeted” sanctions that penalize specific individuals and organizations as well as non-essential sectors, such as petroleum or financial services as opposed to essential goods such as food and medical supplies (Peterson and Haugen, 2016). The sanctions on Russia follow this pattern freezing assets and restricting transactions of particular individuals, banks, and firms allied with Russian President Vladimir Putin as well as trade in goods related to the petroleum industry and military arms (Nelson, 2017).