“Smart” sanctions against Russia: how Western partners plan to make war too expensive for the Kremlin

Ukraine’s allies are preparing a new phase of economic pressure on Moscow – so-called “smart” sanctions, which are intended to hit Russian finances simultaneously with Ukrainian attacks on facilities inside Russia. The West is considering the possibility of using frozen Kremlin assets and introducing new financing mechanisms for Kyiv.

This is reported by CNN .

Three and a half years after Russia launched a full-scale invasion of Ukraine, the West is preparing a new approach to economic pressure on the Kremlin. Kiev’s allies intend to impose so-called “smart” sanctions, the aim of which is to make the war so expensive that it forces Moscow to reconsider its aggressive policy.

Despite 18 packages of EU sanctions and numerous restrictions from the US, UK and other partners, the Russian economy is still afloat. However, according to CNN, deep cracks are already visible in its structure: growth rates have fallen to 1%, inflation has reached 7%, and the key rate remains at 17%. At the same time, revenues from oil and gas are decreasing, and the budget deficit is growing.

To keep military spending at four times its pre-war level, the Kremlin is preparing to raise the value-added tax from 20% to 22%. According to Alexandra Prokopenko, an analyst at the Carnegie Center, this indicates Russia’s preparation for a protracted conflict.

Experts suggest moving from quantity to quality — from “more sanctions” to “smarter ones.” Economist Timothy Ash of Chatham House believes it would be appropriate to introduce a 20–30% “secondary tariff” on Russian exports, with the proceeds going directly to aid Ukraine.

In parallel, the European Union is discussing the idea of providing Kyiv with a 140 billion euro loan, which could be secured by frozen Russian assets. According to Ash, “this would be a powerful signal to Moscow that Ukraine is funded and ready to fight for a long time.”

Another expert, Oleksandr Kolyandr of the Center for European Policy Analysis, suggested another way to increase pressure: encouraging the emigration of qualified specialists from Russia. According to him, this would deepen the personnel crisis and create additional problems for the Russian economy.

Despite massive restrictions, Russia continues to use imported components in military production. President Volodymyr Zelensky has repeatedly stressed: “After four years of war, it is surprising to hear that someone still does not know how to stop the flow of critical parts.”

However, analysts say the most powerful factor putting pressure on the Russian economy is not the new sanctions, but Ukrainian drone strikes. According to the Siala agency, attacks on Russian oil refineries have already disabled about 38% of production capacity, causing fuel shortages and a decline in export revenues.

“Ukraine’s drones are a double blow: they create chaos inside Russia and at the same time reduce its foreign exchange earnings,” noted Timothy Ash.

Analysts say it is the Ukrainian attacks, not the next round of sanctions, that could deal the biggest blow to Moscow. Vladimir Putin recently said that the supply of American Tomahawk missiles to Ukraine would “destroy relations between the United States and Russia.”

By the way, the European Union plans to significantly increase pressure on Russia by introducing a new sanctions package that will affect three key areas at once – energy, financial services, and trade.

It was previously reported that Washington is deliberately not imposing new sanctions against Russia so as not to lose the opportunity to act as a mediator in potential peace negotiations.

As a reminder, the European Union may agree on new sanctions against Russia in the coming days . This is the 19th package of restrictions, which is being prepared in response to the war against Ukraine.

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