Russia Has Adapted to US Sanctions, Export Controls, GAO Says
U.S. sanctions and export controls have had only a limited impact on Russia’s ability to raise revenue and obtain technology for its war machine, as Moscow has taken various steps to get around American restrictions, the Government Accountability Office said in a report released Sept. 8.
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Since Russia invaded Ukraine in 2022, the State and Treasury departments have used Russia-related sanctions authorities to designate more than 6,000 entities and individuals, while the Commerce Department has imposed export controls on more than 900 foreign entities that supported the Russian military. But Russia has circumvented some of these measures, evidenced partly by the partial recovery of its economy after an initial slump, the GAO said.
“Russia’s actions before and after the 2022 sanctions appeared to have limited the decline in its economic outcomes,” the report says. “Knowledgeable stakeholders as well as studies we reviewed suggested that Russia’s economy benefited from the actions of its central bank following the invasion and resulting sanctions, such as raising interest rates and imposing capital controls. In addition, knowledgeable stakeholders explained that Russia’s history with sanctions enabled it to prepare for and adapt to the sanctions following the 2022 invasion.”
Russia has deployed a “shadow fleet” of tankers to get around the international price cap on its oil and maintain a key source of revenue. “Russia’s shadow fleet diminished the effectiveness of the oil price cap by shifting oil exports away from providers subject to the cap, making Russia less dependent on Western ships and insurance, according to knowledgeable stakeholders,” the GAO wrote. Although the U.S. and other countries have taken steps to counter the shadow fleet, Russia’s share of the global oil market has remained stable.
U.S. export controls, meanwhile, have “hindered” but “not completely prevented” Russia’s defense industry from obtaining American military technology, the GAO said. “State and Commerce analyses suggest that one reason Russia can still access products subject to export controls is that Russia actively develops procurement networks in third countries,” the report says. “Some of these stakeholders noted that once a company is identified and sanctioned for export controls violations, others take its place.”
Another limitation of export controls is that lower-level technologies tend to have greater foreign availability, making it easier for Russia to obtain them. "This makes it more challenging for Commerce to counter export controls circumvention of those items compared to higher technology items that have lower foreign availability," the GAO wrote.
Making matters even more difficult, U.S. agencies struggle to assess the effectiveness of their sanctions and export controls, the report says. While the agencies have broad goals for their sanctions and export controls, such as depriving Russia of revenue and degrading Moscow’s ability to wage war, the GAO believes they also need to set “measurable outcomes” with specific targets. “This information is crucial for improving current efforts and informing the future use of sanctions and export controls,” the GAO wrote.
Commerce, State and Treasury all generally agreed that establishing “measurable outcomes” could be helpful, but State expressed concern about making them too narrow and inflexible. The GAO insisted that its recommendation is practical. “For example, measurable outcomes of U.S. sanctions and export controls could include a targeted percentage decrease in Russia’s oil revenues or a specific decrease in Russia’s imports of products on Commerce’s Common High Priority List that Russia uses for its war effort,” the report says.
Senate Democrats have argued that the sanctions and export controls have become less effective in recent months because the Trump administration has allowed them to atrophy, such as by issuing no new designations against Russia (see 2508050069). They also have called for Congress to pass legislation imposing new sanctions on Russia, as well as on China, a key supplier of dual-use items to Russia (see 2509020054). Secretary of State Marco Rubio said last month that new Russia sanctions could harm efforts to achieve a peace deal (see 2508180005).
In its report, the GAO also said that Ukraine supplemental appropriations funding the State Department has tapped into to expand its Russia sanctions staff is set to expire Sept. 30. It recommends the department assess how the loss of that funding will affect its activities. State insisted it already has conducted such an assessment and is “exploring sustainable funding options.”