'Slow-acting' sanctions yet to turn Russian elites against Putin, security analysts say

Sanctions on Russian elites have yet to turn them against the Kremlin, European policymakers have been told.

The EU's in-house security analysts said the “slow-acting” sanctions had caused an economic downturn but had little political effect so far.

However, the sanctions linked to the war in Ukraine will gradually become more potent and permanently reduce Russia's living standards, they said.

EU countries have passed eight rounds of sanctions since Russia invaded Ukraine, restricting trade and transport, weakening Russian banks and banning the majority of oil imports.

More than 1,200 people are subject to the EU's sanctions, including President Vladimir Putin and other top politicians, as well as relatives, oligarchs, military chiefs and propagandists in the Kremlin's inner circle.

The stated aims are to punish Russia's elites for supporting the war and persuade them to call off the invasion.

However, a briefing by the EU's Institute for Security Studies, which advises European policymakers, said there was little sign of elites demanding a change of course.

There have been no defections from key positions in the government, and the few oligarchs who signalled dissent in the early stages of the war have fallen silent, the analysts said.

Billionaire Oleg Tinkov said he was forced to sell his bank after condemning what he called a massacre. Former Chelsea football owner Roman Abramovich offered to help broker peace talks but was criticised for failing to condemn Mr Putin.

“Among Russia’s top elites, no discernible cleavages or alternative power centres have emerged,” authors Clara Portela and Janis Kluge wrote in the eight-page EU report entitled Slow-Acting Tools.

“As regards the political effects, there are few signs of sanctions-induced contestation of the Kremlin’s policies among key elites or the population at large.”

The analysts did not say sanctions were ineffective. The Russian economy is shrinking, oil and gas revenue has dropped and a swift recovery is unlikely, they said.

“Economic sanctions have caused a severe economic crisis in Russia,” they wrote.

“Sanctions will permanently impair Russia’s economic and technological potential and lead to a long-lasting decline in living standards among the population, while reducing the economic resources available to the elites.”

Ukraine conflict — in pictures

They also suggested that sanctions could be worthwhile to demonstrate the EU's commitment to international norms even if they did not change the Kremlin's mind.

However, policymakers were told that Russia had enjoyed some success since 2014, when it was hit with sanctions over the annexation of Crimea, in building resistance to economic pressure.

Analysts said Russia entered the war in a relatively favourable financial position, meaning a budget crunch is not expected for a year or two. There are alternatives to the Swift payment system that key Russian banks can no longer use.

The general population has felt some effects but the economic downturn “is taking time to affect the average citizen”, the briefing said.

The EU passed its four first waves of sanctions in record time after Russia invaded, but divisions subsequently emerged over whether to hit the Russian energy sector.

But key developments in the war, such as the discovery of civilian deaths in Bucha and the purported annexation of four regions of Ukraine, pushed the EU into tightening sanctions.