Sanctions hit Russia hard, but the Kremlin does not stop: The Commissioner of the President of Ukraine for Sanctions told how Western pressure works
Kyiv • UNN
The European Commission presented the 20th package of sanctions against Russia, including a ban on maritime transportation of Russian oil. The Commissioner of the President of Ukraine for Sanctions, Vladyslav Vlasiuk, spoke about the 24% drop in Russia's oil revenues and the 36% increase in budget expenditures.
The European Commission presented the 20th package of sanctions against Russia, which includes a complete ban on maritime transportation of Russian oil and an expansion of sanctions against the "shadow fleet." The package also provides for restrictions on Russia's banking system and new export-import restrictions.
Sanctions against Russian energy and other sectors remain a serious tool for pressuring the enemy's economy. At the same time, discussions about their real effectiveness continue: is the fall in oil revenues sufficient to seriously undermine Russia's ability to finance the war against Ukraine, and are other restrictions working effectively?
Vladyslav Vlasiuk, the President of Ukraine's Commissioner for Sanctions Policy, told UNN about the state of the Russian economy, the main schemes for circumventing oil sanctions, what is happening with the shadow fleet, and what to expect from the new EU sanctions package.
"Oil revenues have fallen very sharply"
Vladyslav Vlasiuk emphasizes that the fall in Russia's oil revenues already has clear numerical confirmation.
"Indeed, Russia's oil revenues are falling very sharply. In figures, we see a minus of 24% for the previous year compared to 2024. The deterioration is especially noticeable in November, December, and January."
He emphasizes that oil's contribution to Russia's economic growth is virtually non-existent.
"Expenditures are growing, and the economy is sagging everywhere"
In parallel with falling revenues, Russia is sharply increasing expenditures, Vlasiuk notes.
"At the same time, budget expenditures increased by 36%," he said.
According to him, the budget deficit is covered by internal resources.
"They are plugging these holes with internal borrowing, covering them with the National Welfare Fund. But all this is not free. These are funds that could go to other sectors of the economy."
The consequences of this are already visible throughout the Russian economy.
"We see a minus everywhere: in pipe production, cement, housing construction - a significant minus everywhere."
"Russians cut everything but the military-industrial complex"
Vlasiuk notes that even with the deteriorating economic situation, the Kremlin is not ready to cut key items for itself.
"Is this pressure sufficient to force Russia to stop the war? This is a philosophical question. So far, we see that they are continuing the war. War expenditures are not a priority for reduction. We see that regions are facing budget deficits and are forced to look for resources, cutting expenditures in almost all areas. At the same time, funding for the military-industrial complex is not being cut. But sooner or later, they will have to do it. They will not be able to drag this out for so long," says the President of Ukraine's Commissioner for Sanctions Policy.
How Russia circumvents oil sanctions
Speaking about circumventing oil sanctions, Vlasiuk names classic and new schemes.
"First, they continue to transport oil to individual buyers in India and China. There is no need to invent anything here: the same tanker fleet, their own insurance, exporters who are formally not under sanctions. For settlements, they use either non-sanctioned financial institutions or alternative payments," Vlasiuk said.
He emphasizes that this is why Ukraine "advocates" for tougher measures.
"That is why we are so actively insisting on physical countermeasures against the shadow fleet."
"Oil is transported without a recipient"
Among the new schemes, Vlasiuk highlights a practice that emerged after US President Donald Trump's sanctions against Lukoil and Rosneft.
"A new practice has emerged: they began to export oil without specifying a recipient at all or specifying it as transit. This makes it possible to formally not violate sanction restrictions up to a certain stage," he said.
"We see all vessels"
Vlasiuk emphasizes that identifying shadow fleet vessels is not technically a problem.
"Just as there is Flightradar for airplanes, there are MarineTraffic and other systems that monitor the movement of all vessels in the world. Every vessel has a transponder, a GPS beacon - it must always be on. Otherwise, it doesn't happen," says Vladyslav Vlasiuk.
According to him, other data is also available.
"We can reconstruct port calls, cargo, insurers, owners, crew composition. In general, this situation can be monitored very closely. That is why President Zelenskyy is not just talking about 122 tankers that actually transport Russian oil and in most cases are European."
"Europe acts only within the framework of international law"
Commenting on the possibility of physically detaining tankers, Vlasiuk explains the EU's limitations.
"There were no statements about readiness to massively detain vessels. There were statements about readiness to work more intensively to prevent the transportation of Russian oil. The European Union acts exclusively within the framework of international law. It allows certain actions only in coastal waters or with respect to vessels under its own flag."
He adds that work on mechanisms is ongoing.
"They are changing legislation to have grounds for action, including the possibility of at least physically stopping some vessels," he noted.
"The 20th sanctions package is quite solid"
The new EU sanctions package has already been prepared and presented.
European Commission President Ursula von der Leyen called on EU member states to approve a new package of sanctions against Russia as soon as possible. She emphasized that such a decision would be a powerful political signal ahead of the fourth anniversary of the full-scale war and would confirm the European Union's unwavering commitment to a free and sovereign Ukraine, which, she said, is only strengthening every day.
Vladyslav Vlasiuk, the President of Ukraine's Commissioner for Sanctions Policy, considers the package strong.
"In this package, we will see a ban on service and transactional maintenance of the shadow fleet - that is, insurance, financial transactions, all these accompanying services. We will see the first attempts at practical implementation of this instrument, not just on paper. There will also be a complete ban on the export of certain categories of goods to specific countries from which these goods then go for export to Russia. We will see Russian oligarchs, the military-industrial complex, and Russian financial institutions. Overall, this is quite a solid package."
The new sanctions package also plans to expand the sanctions list to include 20 more regional Russian banks. It also provides for the introduction of restrictions against cryptocurrencies, companies that trade them, and platforms that provide cryptocurrency trading, in order to block channels for circumventing sanctions.
"Cryptocurrencies were actually used by Russia to circumvent sanctions: we are talking about systemic financial flows, including for settlements for components and energy carriers. It is difficult to completely close this channel due to the decentralized nature of the crypto market, but restrictions from the EU are the right step that significantly complicates such schemes and narrows the possibilities for circumventing sanctions," said Vladyslav Vlasiuk.
"We need to turn the table"
Speaking about one radical step that could break the Russian military economy, Vlasiuk answers directly.
"I think this is a complete blocking of the financial system. That is, to put all Russian banks on the sanctions lists, to block all transactions. Here we need to turn the table: block all banks, and then manually allow individual transactions," he says.
Vlasiuk believes that the current approach involves a phased inclusion of banks in the sanctions lists, but, in his opinion, such a mechanism does not provide a quick systemic effect.
"Now the EU's logic is this: we take Russian banks and start - one, five, ten. As of today, only 40 out of 300 banks are under European Union sanctions. I propose to change this logic - to block all banks," says the President of Ukraine's Commissioner for Sanctions Policy.
Vladyslav Vlasiuk is also convinced that with real secondary sanctions, Russia will lose even the support of its partners.
"If there is a risk of secondary sanctions, no China will put its banks at risk of interacting with Russia," he concluded.
Recall
US Treasury Secretary Scott Bessent stated that further US sanctions against Russia depend on negotiations to end the war in Ukraine. Washington will consider new sanctions against Russia's shadow fleet if peace talks do not yield results.