Are the latest sanctions big enough and broad enough to inflict pain on Putin?
A MARTÍNEZ, HOST:
Those new sanctions that President Biden and his allies have unleashed on Russia target Moscow's banking, technology and aerospace sectors. The scale of the package marks the most significant deployment of economic penalties against a country with Russia's economic size and influence. However, the U.S. and Europe stopped short of several key steps to target Moscow and Vladimir Putin himself. So will it be enough? For more, we turn now to Paul Massaro. He's a congressional foreign policy adviser who specializes in sanctions, illicit finance and counter-corruption. Paul, the U.S. has levied penalties across industries in Russia from asset freezes for 10 of the largest banks to debt and equity restrictions on critical mining, transportation and logistics firms. Are those sanctions big enough and broad enough to inflict pain on Vladimir Putin?
PAUL MASSARO: So these sanctions are some of the most impressive sanctions that have ever been imposed. One of the most impressive things about these sanctions is the way that they've been coordinated, the multinational - multilateral, rather, nature of these sanctions. They include not only the United States and its close allies, the U.K. and the EU, but also the remaining G-7, Canada and Japan, as well as Australia. And that is very special. I mean, that is something that, you know, both has a really significant pragmatic effect but also is extremely symbolic.
MARTÍNEZ: Does that have more to do with the U.S.' ability to convince these allies to do this or Vladimir Putin's actions and how horrible they seem?
MASSARO: I think it's both. I think it's the approach that has been taken by the United States very purposefully to say that this needs to be the whole democratic world standing up for Ukraine in the face of this naked, unprovoked aggression but also the historic world-changing nature of Putin's war of aggression.
MARTÍNEZ: Now, sanctions regularly levied on oligarchs since 2014 have not made a huge difference to Putin's policies, and Biden admitted it would take some time for new measures to alter his behavior. Is the threat of sanctions, you know, if that hasn't deterred Putin the past, then, Paul, what kind of effect will they have now?
MASSARO: So I guess I want to say at the outset that deterrence is no longer the goal of these sanctions. That time has passed. The time for diplomacy is over. Putin has made the historic decision to go for the jugular here, to, you know, in his words, wipe Ukraine off the face of the Earth. And because of that, the goal now is to isolate Russia. It's to turn Russia into an international pariah on par with other rogue states like Iran or North Korea. Now, sanctions do work, but we also have to note that sanctions up till now have been very sparse, full of holes, very weak.
One of the reasons that Putin has reached the decision that he has is precisely because he's been undermining the West, crossing red lines, attacking the democratic world for over a decade now, beginning with the invasion of Georgia in 2008, the invasion of Ukraine in 2014, the first invasion, assassinations and attempted assassinations in the United Kingdom, abuse of Interpol to harass and pursue and intimidate political opponents and dissidents, cyberattacks, strategic corruption and so much more. And Putin has never suffered much more than a slap on the wrist for these things. And that's why, you know, even this time, he very likely expected, and he seems to have even said it in his very, very strange broadcast to National Security Council session, that he would expect the West to eventually just turn the other cheek.
MARTÍNEZ: Paul, you mentioned how sanctions sometimes can be weak. Sanctions have really been the preferred method of coercion for the West for years. When you look at North Korea, Iran, Cuba, China, Russia, have they really been that effective?
MASSARO: Yeah. So sanctions are one of the really powerful asymmetric tools of the United States, and that's because of the U.S. dollar and U.S. financial hegemony. There is no replacement for the U.S. dollar. Something that I say over and over again is that modern dictatorship relies on access to the West. It's all about the dictator's cronies, the dictator's elites, being able to live in the West and spend in the West and have their money in the West, thereby sort of hedging against the dictator having kind of an independent power base and so on and so forth, which allows these kind of dictatorial regimes to be sustainable. When you take that away, you really are able to attack these regimes. You're able to degrade them. You're able to make them much more harmless, which is now what we intend to do with Russia. And there's just no - there's no replacement for this. People sometimes say, well, China, could China replace it? Could Russia? Sanctions bust? And at the end of the day, these sanctions, the West, the United States, is just too central to the financial system to avoid.
MARTÍNEZ: Because I keep hearing that Vladimir Putin has built up a $640 million piggy bank to be ready for these sanctions, I'm wondering, is the lack of a surprise here one of the reasons why maybe sanctions sometimes don't work? I mean, with military actions, is it through the air? Is it through the ground, north, south, east or west? Do sanctions suffer from the lack of surprise?
MASSARO: Sure. So, look, when it comes to targeted sanctions, when it comes to sanctions on individual oligarchs, which we really hope to see more of in the coming days and weeks, yeah, because an individual that hides their money, uses financial anonymity, shell companies and anonymous trusts and so on and so forth to hide their wealth, may be able to avoid those sanctions. But when you're talking about the massive kind of sanctions we're looking at now, there's just - there's no way to avoid those. At the end of the day, you need that access. So, you know, the element of surprise is much less important.
MARTÍNEZ: Paul Massaro, congressional foreign policy adviser. Paul, thanks a lot.
MASSARO: My pleasure.
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