Senior research fellow at the Center for Global Energy Policy at Columbia University, in 2013-2015 Richard Nephew worked with Ambassador Fried as Principal Deputy Coordinator for Sanctions and was directly involved in designing sanction policies against Iran, North Korea, and Russia. In his book Nephew summarizes his experience and offers conceptual and practical approaches to sanctions as a tool of U.S. foreign policy. In the light of the release of the Kremlin report, many talking points of his book appear closely intertwined with the current reality of the sanctions policies against Putin’s Russia.

The key idea of the sanctions policy, according to Nephew, is “causing pain.” But at the same time, sanctions should not just cause pain or damage to the adversary, but focus on furthering the goals and objectives of U.S. foreign policy (e.g. force Iran to end its nuclear program or make Russia withdraw from Donbass). Other levels of the sanctions framework include: a clear understanding of what the target of the sanctions is, what its motivations are, what drives it; accounting for psychological factors (e.g. the ability to resist sanctions); constantly monitoring and calibrating sanctions; having a clear idea of the terms and conditions required for the sanctions to be lifted and the ability to convey this vision to the target. If these principles are not met, sanctions may end up overreaching or underreaching, which in both cases signify their inefficiency.

According to Daniel Fried, Nephew’s book can serve as a practical guide for those who strive to understand how the U.S. sanctions work and how to make this policy instrument more efficient. Based on the framework suggested by The Art of Sanctions, Fried evaluated the efficiency of the U.S. sanctions imposed on Russia after its annexation of Crimea and intervention in Eastern Ukraine. Ambassador Fried concluded that these sanctions achieved two goals out of three: making the Kremlin drop the Novorossia project, and forcing it to agree to negotiate within the Minsk Accords format. However, they failed to make Russia withdraw from Donbass.

Fried argued that the sanctions policies played a crucial part in preventing the Kremlin from further incursion into Ukraine. He emphasized the point that if the West hadn’t coordinated its sanctions policies and taken a unified stance on the Kremlin’s aggression, Putin would have read it as weakness and would have continued with his foreign policy gamble.

Still, Fried contended that, ultimately, U.S. sanctions against Russia underreached. The Obama administration was too restrained and slow to react to the Kremlin’s threats (which is largely explained by the need to coordinate sanctions with its European partners), while the Trump administration seems unwilling to address the Russia issue at all. As a result, the momentum has been lost, and the Russian economy managed to adapt to the sanctions regime. 

As for the Kremlin report released by the U.S. Treasury, Fried argued that it sent the wrong message to both the Kremlin and the EU. It is likely to be perceived by Putin as weakness, which may have negative consequences for all.

In his remarks on the report, Nephew added that, based on his personal experience in the Sanctions Policy Office, it is possible to assume that the Treasury analysts could have done extensive analysis and prepared a serious report, which may have become the classified part. But for some reason, the Trump administration decided to make the unclassified section look like a list from Forbes Russia.

Answering a question from the audience regarding which measures could really deter Russia, Fried said that one needs to go after the Kremlin’s “dark money,” investigate the funding of “troll factories,” investigate Russian-owned real estate in London, New York, Miami. Fried reminded his listeners that the Magnitsky Act and the Panama Papers had hurt Putin the most, which means that investigating his closest friends and “follow[ing] the money” is the way forward. Another measure is combating Russian cyber operations: Fried called the ban on Russian software produced by Kaspersky Lab a successful example. Finally, he suggested that those in the Trump administration dealing with the sanctions policy should be in constant contact with America’s European partners, and should be going to Brussels, Paris, Madrid, and other places affected by the Kremlin’s interference. “If I had my old job, I’d be living in Europe right now,” noted Fried.

* The State Department’s Sanctions Policy Office was shut down in October 2017.