Sanctions are a tool that the European Union uses very carefully. On the one hand, sanctions are being applied very carefully, but on the other hand, there are not enough sanctions. How do you assess the sanctions policy of the western world over the past six years?
Mikhail Maglov 1: First, let’s divide – there are American sanctions, this is a separate block, and there are European sanctions.
Let’s talk about the European ones first.
EU sanctions are adopted by the decision of the Council of Foreign Ministers of all states, that is why even the adoption of the decision itself is difficult. What are sanctions? European sanctions in their current form are, first of all, a political position. This is Europe’s statement about what not to do. You cannot just close the borders in Europe. Or: you cannot kill your citizens and our citizens on our territory using dangerous military substances. Or: you cannot disperse peaceful demonstrations. First of all, this is the position that is declared by the EU foreign policy department.
But even to agree on the lists, the direction of the sanctions, names, company names, etc. it is not easy, although in the European Union they somehow negotiate and apply sanctions.
The problem is that European sanctions remain a political position in terms of the instrument. There are statements, but there are no really working mechanisms, bureaucratic tools to enforce sanctions.
So, the Kremlin has done something, and the European Union has to express its political position again?
Yes, maybe even Brussels doesn’t want it. This is a matter of internal politics. If European politicians do not react, then their voters may start asking questions, and during the next elections they will replace some politicians with others.
The problem is that there is no political will to control the sanctions regime. In the United States, there is a separate institution for this: the Office of Foreign Assets Control (OFAC). This department prepares the entire sanctions policy, and it also controls the situation.
If they see a violation, they investigate the case and take it to the court. If they see that someone is trying to circumvent the sanctions with the help of other companies, they add them to the lists.
And what about the European Union?
In the European Union, the sanctions are adopted by all together, and the obligation to comply lies on each country separately. For example, Lithuania: in the country’s Criminal Code there is even a separate article for violation of international sanctions, up to five years in prison, that is a crime of average gravity. But since 2014, we have not known a single criminal case that would have been brought to court. Although we know dozens of cases of sanctions violations. Here we face the fact that there is a political will, but the mechanisms do not work.
I don’t know. Maybe prosecutors don’t know how to investigate such cases, or maybe they don’t want to? After all, sanctions evasion schemes concern several countries, these are complex cases. We recently published an investigation that we did with LRT (Lithuanian TV and Radio Company): German turbines were installed in Crimea. There was a big scandal with Siemens. The company claimed to have been deceived.
Isn’t it possible to trace the high-precision technological equipment that goes to the Crimea?
You need to understand how a customs officer works. Customs works with customs declarations, the work is based on the fact that the declarations are reliable. Customs officers cannot check all the trucks, it is simply impossible. If they see “bells”, only then they open and check. Tracking the supply of such equipment is a big problem.
What happened with Siemens?
They claimed that they knew nothing, this was stupid and naive. As a result, a criminal case was not opened, although Germany was obliged to investigate this case. There is no water in Crimea, and any power plant is associated with high water consumption, so the developers decided to use a closed turbine cooling cycle – the water had to be purified. We revealed a diagram of how the water purification systems were installed – they were delivered to two Crimean stations. For this, a Russian company was used, a Lithuanian company that was under the control of Russian guys, and a Czech company that was owned by a Lithuanian one. Much of the equipment was bought from the Germans or someone else.
How difficult was this journalistic investigation? Was it hard to establish these facts?
Pretty simple. My colleagues came to me, they paid attention to the supply of this equipment. I am engaged in the subject, we began to investigate together, the whole evidence base was very simple. Customs declarations “leak”, Russian or Ukrainian, these are large amounts of data. The movement of goods can be tracked.
Prosecutors are not stupid. If journalists can do something, I think prosecutors can do the same.
This is not the first time when Lithuanian journalists and I wrote about the violation of the “Crimean” sanctions. It was four years ago, then, after the publication, the Ministry of Foreign Affairs of Lithuania, responsible for the enforcement of the sanctions, filed a complaint with the General Prosecutor’s Office and a criminal case was opened. Two years later, we learned that the case was closed. The prosecutors did not even question the authors of the articles as witnesses.
On what basis the case was closed?
As far as I understand, the reason was the absence of corpus delicti. Our article was based on documents obtained from Rosreestr. As a Russian citizen, I receive them. And the investigator of the Lithuanian Prosecutor General’s Office cannot get these data. And they didn’t even ask what the documents were there.
Your assessment of prosecutors or investigators is a little overstated. The law enforcement agencies that I have encountered in different EU countries are not entirely professional in everything that goes outside their country.
Political will probably ends at the level of the Ministry of Foreign Affairs. Together with the “Nastoyaschee Vremya” TV channel, we made an investigation about Crimea, we had more than a hundred European companies, primarily from Cyprus. And there were no investigations either, although we have been dealing with this topic for 5 years. From time to time we see some messages from Ukraine when the prosecutor’s office announces the initiation of a criminal case, but this is from the area of political will, because we also do not see any real continuation of investigations in Ukraine, everything rather remains at the level of statements. Kiev does not have the ability to actually conduct such business, because we are talking about Russian businessmen and European companies. And why the cases in the EU are not being investigated – I do not know. Sanctions are certainly not beneficial to anyone, because it is a matter of money. For everyone, this is a mutually unpleasant thing.
We see a difference in the actions of the US and the EU in relation to sanctions. It is one thing that the United States is a single state, and the EU is an alliance of different countries. What are the other differences?
Indeed, there is a federal structure of the United States and the federal government accepts the sanctions. In the EU, we have a situation where everyone gets together and makes a decision. It should be understood that a third of European states build their policy of relations with the Kremlin, first of all, on a personal level, through some kind of individual relations. Moreover, the control system simply does not exist in Europe. When it lies at the level of each nation-state, it means that no one is in control.
In this situation, the solution may be to create a pan-European agency similar to the American OFAC. After all, in recent months they have created a pan-European prosecutor’s office! It seems logical to me to establish a certain body in Brussels to coordinate this work and identify schemes, and most importantly, seeking to initiate criminal cases, even at the national level.
Today the story with European sanctions looks like this: if you are a responsible businessman and do not want to violate the sanctions, then you will not. If you need to break them, you will find a thousand ways. This carries additional risks, but businessmen obviously include these risks, adding the value to their contracts.
We hear a lot about sanctions being applied in such a way to not hit hard. Do you agree with this thesis, and if so, what sanctions could affect the Lukashenka regime?
This is the logic, first of all, how to hit yourself hard. In this sense, it is easier for the Americans, the relationship between the American and Russian economies is rather low. The EU and Russia are very tightly connected – energy, logistics, fertilizers, etc. When sectoral sanctions are adopted in Europe, they calculate how much damage this will cause to Europe itself. When we talk about personal sanctions, there is another problem – some of the people who politically should fall under the sanctions have citizenship of European countries. The most striking example is Arkady Rotenberg, Putin’s closest ally, who came under European sanctions. But his brother Boris – no, even though a lot of things have been issued for him. He has Finnish citizenship.
This is the whole problem. It is difficult for France to impose sanctions against, for example, Yakunin, a Knight of the Legion of Honor. These states have handed out and sold citizenships, they are in no hurry to introduce personal sanctions.
As for Lukashenko, the sanctions that have been introduced recently, I think, will have a rather big effect. European sanctions were imposed on petroleum products, on fertilizers, although not all. And here is an important detail: in the range of fertilizers there are those that are the most popular in Europe. They were not sanctioned. There are not many large players on the fertilizer market – mainly in Russia and Belarus. If fertilizers do not come from Belarus, then the Russians raise prices. And in Europe there are countries that are tied economically to the agricultural sector.
Another aspect with Lukashenko is that the stoppage of Belarusian exports immediately blocks the activity of the Lithuanian railways, where a huge percentage of traffic goes from Belarus to the port of Klaipeda. Which, in turn, is the largest port and the largest taxpayer.
In general, the policy of sanctions is a difficult process. It is impossible not to impose sanctions, but somewhere it is impossible to impose.
Do you see an opportunity to build through sanctions a policy of influencing the regimes in the world today? Or will this only lead to the fact that the sanctions will only help dictators to boast people, asserting anti-Western rhetoric?
Sanctions are no longer a policy of influence. This was possible in the 1960s and 1980s, when the sanctions policy was being created. Now it is rather proceeding from a different logic: “we cannot afford to have business with these guys”. That is, we have to react somehow. Today, sanctions are primarily aimed at domestic consumption, if you are going down the street and you see a bandit, you don’t go to help him. Today, sanctions are more of a denial of complicity. It is difficult to explain to our voters why we supply equipment to Lukashenko, who has established an absolute dictatorship and totalitarianism, persecutes and beat people. If earlier we saw these events only through the prism of professional journalists, today all of Europe saw terrible footage from Belarus live. This greatly affects the perception of ordinary residents.
So sanctions today are a matter of their own hygiene for the countries that introduce them. And yet, in the end: is there a measure to which we can increase today’s sanctions so that the Putin regime will stop to exist economically in the foreseeable future?
No. This is impossible. The cost is growing, you can feel it, but you should not expect such a result. The Putin regime will end when Putin is over. Physically.
Interviewed by Igor Isayev