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October 19, 2022

There is a life-or-death debate going on whether Western sanctions are effective to pressure Russia to stop its offensive in Ukraine. The sanctions imposed are tough, yet there are holes that give Russia breathing room and lessens the economic pain on the Russian government.

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A big question for Americans is whether the current sanctions are effective and if recently announced additional sanctions will have an impact. Some argue that the sanctions have had negligible impact and, in the case of energy, have strengthened the hand of Russia by providing undue leverage to the Kremlin as Europe enters winter. Others argue that the sanctions have crippled segments of the Russian economy and led to some obvious change in behavior, although this view seems short on observable metrics in support.

The concept of sanctions is that they are penalties imposed by one nation or a group of countries against another to prevent further action in violation of economic or humanitarian laws. Right now, the United States and European Union have coordinated tough Russian sanctions while also providing direct aid, both military and humanitarian, to Ukraine. Sanctions are an alternative to armed conflict. Ideally, they must be tough to impose enough pain to change behavior, or even cause regime change.

Sanctions and defensive military aid to Ukraine is undeniably a far better alternative than military action by American citizens against Russia. No rational American wants the United States to engage in a war with Russia over Ukraine — a country that has in the past caused trouble with American interests in terms of political corruption that have yet to be confronted fully.

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Before the recent announced annexation of four territories of Ukraine by Russia, there were a long list of sanctions that had a mixed impact. The BBC reports that high oil and gas prices have helped Russia in one sense, because, as David Fyfe, chief economist at research organization Argus Media, told the BBC, Russia’s crude oil revenues rose 41% over the past year and “make up 40% of Russia’s total exports, and so they are helping greatly to fund the war.” Fyfe cautioned that, on the other hand, sanctions are weaking Russia by “blocking its access to the hi-tech components that its military sector needs.” Sanctions are having an impact, but it seems like a mixed bag. Inflation increases and GDP declines indicate that sanctions are working and should continue.

Since the annexation by Russia of four areas of Ukraine, new sanctions were imposed that include the targeting of Russian politicians and heightened sanctions against those engaging in commerce with Russia. The Department of the Treasury announced on September 30, 2022, the “Office of Foreign Assets Control (OFAC) announced additional “new guidance that warns of the heightened sanctions risk that international actors outside of Russia would face for providing political or economic support to Russia as a result of its illegal attempts to change the status of Ukrainian territory.” One company that is engaging in commerce with Russia, and arguably violating the OFAC directive despite having defense contracts with the U.S. government is the European aerospace giant Airbus.

The question of what Airbus will do when threatened with sanctions is for now rhetorical. Airbus continues to import titanium from Russia, despite the fact that Russia is a distant third or fourth globally in terms of titanium exports. Airbus continues to trade with Russia and finance Russia’s war effort against Ukraine without apology. Bloomberg News reported back in April that Airbus “defended its decision to keep importing Russian titanium, contending sanctions would hurt aerospace manufacturers who depend on the lightweight metal and wouldn’t deter Vladimir Putin after his invasion of Ukraine.” Airbus seems to thumb its nose at the world and says it will continue doing what it has done in the past as regards trade with Russia, taking the position that it gets to decide what is right or wrong.  Airbus is unabashedly acting above the law, taking a page from the cement giant Lafarge SA’s script in Syria. The only difference appears to be that LaFarge has been sanctioned over $770 million dollars by the DoJ because they traded with Middle Eastern terrorists, while Airbus is trading with European war criminals. The norm is that sanctions are ever present if you are dealing with the Middle East and saber-rattling threats are all that you get if your crimes are trading outside that region.

The threat of sanctions will assuredly impact Airbus. The company is trying to secure additional diverse contracts with the Pentagon in many areas. Back in July, Airbus announced that it was participating in a Pentagon program to provide satellite platforms for a space program. The company also is angling to get lucrative defense contracts to provide air-to-air refueling tankers for the Department of Defense. The Pentagon should debar Airbus immediately.

The U.S. government needs to make companies like Airbus examples if they continue to ignore the sanctions. Otherwise, they become mere effete posturing that weakens their ameliorative purposes which may inexorably lead to war.

W. Bruce DelValle is a constitutional law, technology law, and international law litigator. He is a native Texan who grew up on the Gulf Coast of Florida, graduated from Penn State University and worked as a nuclear power engineer prior to graduating cum laude from Washington and Lee University School of Law.