PILPG Ukraine Drafting Notes: Sanctions

Sanctions

Considering the impact of sanctions on the Russian economy, and the determination of Russian officials to bring an end to sanctions, this topic will likely play be of central importance during peace negotiations.  Several critical issues will need to be considered and specified during negotiations:

• Defining the Scope of Sanctions Relief:  Clearly defining which sanctions will be lifted, retained, or phased out can reduce ambiguity and the likelihood of disputes during implementation.  Categories of sanctions may include financial restrictions, trade embargoes, or technology bans.  Negotiations would need to consider which sanctions are going to be lifted and which will be maintained as deterrents against future violations, if this is the preferred approach.  Tailoring sanctions relief to align with specific peace goals, such as the restoration of Ukraine’s sovereignty and security, can help minimize unintended consequences.

• Timing and Process of Sanctions Removal:  Sanctions can be lifted all at once or in a phased and/or conditional manner.  Establishing a phased and conditional approach to sanctions removal can create incentives for compliance while reducing risks of premature concessions.  The agreement may also define an initial set of sanctions to be lifted upon signing, followed by periodic assessments linked to Russia's adherence to specific commitments, such as troop withdrawals or reparations.  A mechanism for verifying compliance could further ensure that sanctions removal is directly tied to measurable progress, while provisions for reimposing sanctions in case of violations can act as a safeguard.

• Reparations and Economic Accountability:  The integration of sanctions relief with mechanisms for reparations can help ensure Russia contributes to rebuilding Ukraine and addressing war-related damages.  The agreement might specify that access to sanctions relief is contingent on financial contributions to reconstruction efforts or humanitarian assistance.  Provisions could include the use of frozen Russian assets for reparations or the creation of an international fund to manage contributions.  

• Coordination with International Allies:  Ukraine may need to coordinate with its international allies on sanctions removal to ensure a coherent approach and not infringe on any of its allies’ sanctions mechanisms.  Peace agreement provisions may include commitments to coordinate with the EU, US, and other key partners on the timing and scope of sanctions relief.  This alignment can prevent inconsistencies in enforcement and maintain collective leverage.  The agreement could also establish a framework for ongoing consultations with allies to periodically review sanctions policies, ensuring they remain consistent with the broader objectives of the peace process.

Defining the Scope of Sanctions Relief

Clearly establishing the categories and extent of sanctions relief is vital to avoiding disputes and ensuring the agreement’s effectiveness.

• Comprehensive Sanctions Relief:  This option involves lifting all sanctions on trade, financial systems, and energy sectors immediately after the peace agreement is implemented.  This approach could signal commitment to the peace process and support economic recovery.  However, it risks removing all leverage for enforcing long-term compliance and may be seen as overly lenient, potentially causing dissatisfaction among the Ukrainian population. 

• Sector-Specific Relief:  Sanctions targeting non-security-related sectors, such as agricultural or humanitarian goods, could be removed first, with more critical restrictions (e.g., technology and military trade) retained until further compliance is verified.  This approach could balance economic recovery with maintaining strategic pressure and could be seen as fair by both parties.  However, it may slow negotiations if Russia perceives the initial relief as insufficient or symbolic, potentially delaying broader implementation of the peace agreement.

• Retained Core Sanctions:  Some sanctions, particularly those affecting military capabilities, dual-use technologies, and high-revenue energy exports, could be excluded from the relief package entirely to ensure long-term deterrence.  This would protect Ukraine’s security and keep pressure on Russia to fulfill its commitments.  However, it risks making an agreement less attractive to Russia and could prolong conflict if perceived as punitive or unyielding.

Timing and Process of Sanctions Removal

• Immediate Sanctions Relief:  A significant portion of sanctions could be lifted immediately upon signing the agreement to demonstrate goodwill and provide Russia with a tangible incentive to uphold its commitments.  This could help foster trust and stabilize the regional economy.  However, it reduces leverage early in the process, leaving little recourse if Russia fails to follow through with its obligations.

• Phased Removal Tied to Benchmarks:  Sanctions could be lifted incrementally, tied to specific, verifiable actions such as troop withdrawals, reparations payments, or adherence to ceasefire conditions.  This would ensure accountability and allow adjustments if compliance falters, maintaining a level of pressure throughout the process.  However, this approach requires a robust verification mechanism, which could delay relief and create disputes over what constitutes compliance.

• Conditional Reimposition Clauses:  Sanctions could be automatically reimposed if Russia violates the terms of the agreement, ensuring accountability and deterring backtracking.  This safeguards against noncompliance while maintaining flexibility in negotiations.  However, the automatic nature of reimposition could reduce trust and make Russia hesitant to agree if it perceives the clauses as overly punitive.

Reparations and Economic Accountability

Considering the scale of damage inflicted by Russia and the need for reparations, it might be necessary to tie sanctions relief to the payment of reparations. 

• Use of Frozen Assets:  Allocating frozen Russian assets to fund reconstruction or provide reparations could offer an immediate, enforceable mechanism for accountability without relying on Russia’s direct cooperation.  This option is practical and impactful, as many of these assets are already under international control.  However, it may provoke legal disputes or resistance from Russia, complicating its implementation.

• Sanctions Relief Conditional on Payments:  Sanctions relief could be phased based on Russia’s adherence to a structured reparations payment plan, linking economic recovery to accountability.  This ensures direct responsibility and creates an ongoing incentive for compliance.  However, it risks delaying meaningful sanctions relief and could create friction if Russia views the conditions as burdensome or inflexible.

Coordination with International Allies

• Unified Sanctions Framework:  A coordinated agreement with allies (e.g., EU, US, G7) on the scope and timing of sanctions relief would ensure consistency and maintain collective leverage.  This approach strengthens enforcement and prevents gaps that Russia could exploit.  However, achieving consensus among allies with differing economic and political priorities could delay progress and complicate the implementation process.

• Regional Sanctions Cooperation:  Developing a regional framework with Ukraine’s neighbors and key European allies could prioritize immediate security concerns and foster stronger local alignment.  This option ensures that those most directly affected by the conflict have a voice in the process.  However, it may lack the global scope necessary for enforcing broader sanctions relief effectively.

• Periodic Review Mechanism:  Regular consultations with international allies could ensure sanctions policies are reviewed and adapted to evolving conditions, preserving flexibility and cohesion.  This option allows for dynamic responses to compliance or violations but requires a clear and efficient decision-making process to avoid delays or political disagreements among partners.