How to Sanction Russia

And Why Obama's Current Strategy Won't Work

People attend a rally to support the annexation of Ukraine's Crimea to Russia in Red Square in central Moscow, March 18, 2014. Maxim Shemetov / Courtesy Reuters

After weeks of threatening to do so, on March 17, U.S. President Barack Obama signed an executive order freezing the assets of Russian officials involved in Moscow’s meddling in Ukraine. Economic sanctions and visa bans have been central to the U.S. policy response in Ukraine for two reasons. For one, there aren’t any realistic military options for countering Russian adventurism in the former Soviet sphere. But more important, comprehensive economic sanctions have had remarkable success in recent years, including in Iran. Unfortunately for the United States and its allies, Iran-like sanctions are currently neither feasible nor prudent in dealing with the Russian interference in Crimea.

For many good reasons, no one inside or outside of Washington is seriously proposing a U.S. military response to the situation in Ukraine. But buoyed by Iran’s decision to come to the negotiating table, many have looked to sanctions. Although Iran’s nuclear program unquestionably remains a security threat to the United States and its allies, there is little doubt that the sanctions campaign led by the United States has caused Iran’s near total economic collapse and pushed Tehran to enter into negotiations with the West. That sanctions regime has had three components. First, it included prohibitions on oil, tanker fleets, and the insurance industry, which ground the Iranian oil trade to a halt and cost the country many billions of dollars in export revenue. Second, banking sanctions cut off Iran from the international banking system, making it virtually impossible for the country to engage in any form of international commerce. And third, Obama invoked the U.S. International Emergency Economic Powers Act (IEEPA), which allowed him to block Iranian assets subject to U.S. jurisdiction (such as those belonging to the Iranian Revolutionary Guard Corps and its various commercial and logistical affiliates) and made it illegal for U.S. citizens to do business with designated persons or companies.

There has been talk in the U.S. Congress of targeting

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