ED – this article is part of a series on the transactional multipolar world model

Friedrich Nietzsche said: “what doesn’t kill me makes me stronger,” and Russian President Vladimir Putin has repeatedly insisted that Western sanctions have only strengthened Russia’s economy.

His argument is that after Russia was cut off from Western goods and services, it was forced to pivot inwards and diversify. Yet, that doesn’t mean he doesn’t want sanctions to be lifted. Despite Russia’s strong growth – the economy expanded by 4.1% in both of the last two years – sanctions remain a drag on growth, increase costs, lengthen supply chains and stoke inflation. Russia could grow much faster if there were no sanctions.

And US President Donald Trump is willing to give them away. As part of the new Black Sea grain deal agreed between the US and Russia on March 25, Putin demanded that financial sanctions on Russia’s Agricultural Bank, Rosselkhozbank, be lifted along with four other restrictions. According to the White House statement issued the same day, the US appeared to agree, for the first time. Washington committed to “help restore Russia’s access to the world market for agricultural and fertilizer exports.”

Russia said it would only agree to a Black Sea ceasefire if the West lifted sanctions reconnected Rosselkhozbank and other Russian banks involved in the food trade to the SWIFT international payment system. Moscow also demanding the lifting of a whole host of other restrictions and sanctions, including on exporters of food (including fish products) and fertilizers, on the handling of such cargo by international insurance companies and ports, and on supplying agricultural machinery and other goods to Russia needed by the agricultural sector and fertilizer producers.

Dangerous signals

“This kaleidoscope of divergent positions was then completed by Kyiv in its own summary of the negotiations. Ukrainian Defence Minister Rustem Umerov and President Volodymyr Zelenskiy’s comments suggested that Ukraine knew nothing about Russia’s condition that sanctions should be lifted,” said Alexandra Prokopenko, a political economy analyst in a paper for Carnegie Endowment for International Peace. “Accordingly, as far as Kyiv is concerned, the ceasefire in the Black Sea is already in effect and applies not only to ships, but also to ports. The moratorium on strikes against energy facilities, according to the Ukrainian side, has been in effect since March 25, while the Russian version dates it back to March 18.”

Ukrainian President Volodymyr Zelenskiy slammed the "dangerous signals" on the possibility of lifting sanctions on Russia imposed over its invasion of Ukraine.

"The signals that we have heard from Saudi Arabia or from that direction about sanctions, about the possible lifting... These are very dangerous signals," Zelensky said at a press conference after a summit of Kyiv's backers in Paris. The last thing he wants to see is the pressure on Russia eased. The EU’s position is that sanctions will only be withdrawn once the Armed Forces of Russia (AFR) entirely withdraws from Ukraine and promises to pay reparations.

The situation is further confused as SWIFT is based in Belgium and under EU law. At a meeting of the coalition of the willing in Paris on March 27, European leaders said they would not lift any sanctions and indeed, UK Prime Minister Keir Starmer said more sanctions should be applied; the next day the European Commission (EC) announced it was starting work on a seventeenth sanctions package.

Secretary of State Marco Rubio who is leading the US negotiations with Russia is well aware of difficulties of removing the sanctions demanded by Russia.

"We’re sort of going to analyse what they [Russia’s representatives] are raising and sort of study what exactly it is," Rubio said on board the plane en route to the US after visiting Jamaica, Guyana and Suriname. "It’s a host of sanctions, including sanctions that are not American.. so we couldn’t lift them if we wanted to. We’re going to sort of analyse what our team came back [from consultations in Riyadh] with. We’ll present those options to the [US] President. The President will make those decisions. We’re not there yet.”

Putin asked for very similar sanctions relief in the summer of 2023, which were refused that led to the collapse of the Black Sea Grain Initiative that has been brokered by the UN and Turkey a year earlier. However, the sanctions were only partial as there are no formal sanctions against Russian food producers and exporters. Moscow obtained exemptions from the sanctions regime for food and fertilizers back in 2022 and has successfully used them. That makes the banks sanctions key.

In 2023, Russia exported $15.3bn worth of fertilizer, making it one of the world’s biggest fertilizer exporters—including to Western countries. Russian grain exports were also record-breaking, amounting to 71mn tonnes in the 2023/24 season, almost double the 42mn tonnes exported two years earlier, and also worthbns of dollars.

The SWIFT sanctions that were imposed only days after Russia’s invasion of Ukraine in 2022 and after Gazprombank was added to the list at the end of last year 85% of Russia’s banking assets are now included in the regime. While that has not prevented Russia from trading, they remain a major inconvenience. After the outgoing Biden administration beefed up US financial sanctions at the end of 2024 they are now cutting into Russia’s trade and current account surplus, as the Kremlin scrambles to find work arounds.

“Since the full-scale invasion of Ukraine, Russians have figured out how to bypass restrictions and obtain microchips, but the workarounds are complicated and expensive,” Kolyandr notes. “Equipment wear and tear and the difficulties of obtaining replacement parts continue to cause serious problems for Russian civil aviation, the transport sector, and manufacturers.”

2014 sanctions deeply engrained

Most of the problems Trump faces in unilaterally lifting sanctions at the moment is the need to coordinate the effort with an intransient EU and UK, which have both made it clear they will not cooperate. However, US sanctions that were first imposed following Russia’s 2014 annexation of the Crimea are much more deeply embedded in the woodwork making it extremely difficult to roll back the regime at home as well.

While Trump has signalled a willingness to lift sanctions, the reality is that his powers to do so are significantly constrained. “The legal framework for most US sanctions is based on two laws: one passed in 1976; the other in 1977,” explains Alexander Kolyandr, an analyst at the Carnegie Endowment for International Peace in another paper. “While the president can issue executive orders, true sanctions relief requires Congressional cooperation.”

There has been a raft of legislation enacted even before the conflict in Ukraine began. The Kremlin well remembers the Jackson-Vanik amendment to the US Trade Act of 1974 that limited economic ties with the Soviet Union that was used by the US to block Russia’s accession  to the WTO, and took decades to repeal. In 2012 the Magnitsky Act was put in place that allows the West to target corrupt officials.

The 1977 law that gave the president the right to impose restrictions in moments of “national emergency,” which needs to be renewed each year in April, which Trump already extended in March as one of his first acts as president.

A second group of US sanctions on Russia falls under the 2017 Countering America’s Adversaries Through Sanctions Act (CAATSA), which codified many Obama-era restrictions by giving them the status of laws rather than just executive orders that are easily rescinded.

These sanctions range from those on dual-use goods, as well as those on individuals deemed responsible for undermining Ukraine’s territorial integrity. The outgoing Biden administration also used CAATSA to sanction major Russian companies, including defence conglomerate Rostec, state-owned banks Sberbank and Gazprombank, ship-builder Zvezda, and the Moscow Exchange.

Kolyandr says that as CAATSA sanctions are laws, not executive orders, if Trump wants to get rid of them, he will have to persuade Congress that the act is no longer in the US national security interest. Many in Congress remain sceptical of his peace process and want more, not less, sanctions.

“All of this means that there are actually only a few sanctions against Russia that Trump could lift on his own… While all the current US sanctions against Russia were imposed via executive orders issued by the president or a federal ministry, Trump cannot lift them unilaterally, even if he wanted to. While the president is responsible for some aspects of US foreign policy, Congress is in charge of regulating foreign commerce, which means that both branches of government have a say over economic sanctions,” says Kolyandr.

Testing the water 

It remains unclear if sanctions on Rosselkhozbank will be lifted, but Prokopenko argues that Putin is testing the water to see how far he can go with demanding sanctions be lifted.

“Washington would have to exert even more pressure on Ukraine, since the current version of the agreements—which does not include a moratorium on attacks on Ukrainian ports—does not give Kyiv anything. Moscow, meanwhile, is only required to make symbolic concessions in exchange for what would be—if implemented—a major compromise by Washington on the sanctions issue,” says Prokopenko. “Putin, for his part, was prepared to keep waging war against Ukraine regardless of who won the US presidential election. As far as he is concerned, therefore, Trump needs a ceasefire more than he does. Moscow’s attitude is: if the Americans need it more, let them put in all the effort.”

When Trump met with Ukrainian President Volodymyr Zelenskiy in a notorious press conference on February 28 that descended into a shouting match, Trump told the Ukrainian president that he had “no cards to play”.

According to Castellum.AI, a sanctions tracking platform, there have been 24,311 sanctions imposed on Russia. These include 7,384 by the US, 3,639 by Canada, 3,266 by Switzerland, and 2,482 by the EU. Trump regards all the US sanctions as cards that he can play in his transactional multipolar world model.

And it appears that the has little interest in hanging on to this deck of cards. The Trump administration has reduced its participation in working groups monitoring compliance with sanctions against Russia, Bloomberg reported on March 27, citing EU officials. They complained the US is not responding to request for help or cooperation in ongoing monitoring operators designed to prevent the import of parts and equipment needed for the production of weapons.

US Presidential Special Envoy Steve Witkoff bluntly said that if a ceasefire is agreed upon in Ukraine, sanctions against Russia will be eased on March 19.

Not just Ukraine

Trump has been playing his sanction cards in other disputes in which the US is involved. In the last month, the White House US offered Syria conditions for limited sanctions relief and also sent a letter to Tehran asking for suggestions for an outline to start talks.

While the attention has been focused on the Ukraine ceasefire talks in Riyadh over the last month, the White House is clearly attempting to do a wider deal that includes ending the problems in the Middle East.

Serbia also got another 30-day sanctions waiver from US for the Russian affiliated oil company NIS, Serbian President Aleksandar Vucic said on March 28. 

"We succeeded! We have received a new 30-day postponement of sanctions for NIS," Vucic announced on Instagram.

NIS operates the only oil refinery in Serbia, which has annual capacity of 4.8mn tonnes and covers most of the Balkan country's needs. It was among the companies hit by a broad package of U.S. sanctions against the Russian energy sector introduced in January, as former President Joe Biden was leaving office.

 

NIS  is majority-owned by Russia's Gazprom Neft  and Gazprom but has been hit with sanctions and is the country’s main supplier of oil and oil products. The previous waiver expired at midnight on March 27 and currently the status of the waiver remains uncertain.

Dusan Bajatovic, CEO of Serbia's state-owned gas company Srbijagas, indicated optimism about a last-minute extension, stating that "there will be more delays of sanctions... but we cannot expect more than 30 days."

LNG sanctions on the list

For Putin, rolling back financial sanctions is a top priority but next on the list is LNG sanctions and there is a long list of similar sanctions on a wide variety of sectors that all present Trump with cards he could play. 

Russia aims to boost its LNG production from 34.7mn tonnes in 2024 to 100mn tonnes by 2035 amid the Western countries’ sanctions pressure on the sector, the Russian Energy Minister Sergey Tsivilyov said on March 21.

"Speaking about specific results, the Minister noted that Russia retains goals on boosting the production of liquefied natural gas to 100mn tonnes by 2035, which will enable the country to take up to 20% of global market of this fuel," according to a statement following a meeting of the community council at the ministry.

Growing optimism for a peace deal between Russia and Ukraine has sparked discussions about the potential resumption of Russian gas flows to Europe. While it is not the base case, a partial restart of flows could drastically change the outlook for the European gas market.

With a 25bcm short fall in supply, the EU is worried gas prices will spike over the summer, fuelling speculation that the surviving strand of the Nord Stream gas pipeline will be turned back on. At the same time speculation is mounting that Trump may ease sanctions on the export of specialist LNG production equipment to Russia may be eased as part of Russo-US joint ventures in the Arctic. Trump’s administration has made it very clear it wants to do business with Russia in the oil and gas business. Currently, completion of the second train of the LNG 2 Arctic project has stalled as it is unable to source sanctioned equipment from anywhere else. Without sanctions relief Russia will be unable to meet its production expansion targets giving Trump an ace to play in his negotiations with Putin on Arctic deals.

All-in-all Trump has a lot of cards to play in talks with Putin in many sectors. Secretary of State Marco Rubio suggested that the number of deals that could be discussed are wide ranging, and that Russia has a historic opportunity for economic cooperation with the US if a ceasefire deal in the Ukraine conflict can be reached.

The fly in the ointment is the fact that US sanctions are only part of a broader Western sanctions architecture. The EU, UK, and Switzerland continue to enforce their own regimes, many of which remain linked to Russia’s actions in Ukraine. Without coordinated relief from all parties, the prospect of meaningful sanctions rollback remains elusive.

K

ED – this article is part of a series on the transactional multipolar world model

Friedrich Nietzsche said: “what doesn’t kill me makes me stronger,” and Russian President Vladimir Putin has repeatedly insisted that Western sanctions have only strengthened Russia’s economy.

His argument is that after Russia was cut off from Western goods and services, it was forced to pivot inwards and diversify. Yet that doesn’t mean he doesn’t want sanctions to be lifted. Despite Russia’s strong growth – the economy expanded by 4.1% in both of the last two years – sanctions remain a drag on growth, increase costs, lengthen supply chains and stoke inflation. Russia could grow much faster if there were no sanctions.

And US President Donald Trump is willing to give them away. As part of the new Black Sea grain deal agreed between the US and Russia on March 25, Putin demanded that financial sanctions on Russia’s Agricultural Bank – Rosselkhozbank – be lifted along with four other restrictions. According to the White House statement issued the same day, the US appeared to agree, for the first time. Washington committed to “help restore Russia’s access to the world market for agricultural and fertiliser exports.”

Russia said it would only agree to a Black Sea ceasefire if the West lifted sanctions and reconnected Rosselkhozbank and other Russian banks involved in the food trade to the SWIFT international payment system. Moscow also demanded the lifting of a whole host of other restrictions and sanctions, including on exporters of food (including fish products) and fertilisers, on the handling of such cargo by international insurance companies and ports, and on supplying agricultural machinery and other goods to Russia needed by the agricultural sector and fertiliser producers.

Dangerous signals

“This kaleidoscope of divergent positions was then completed by Kyiv in its own summary of the negotiations. Ukrainian Defence Minister Rustem Umerov and President Volodymyr Zelenskiy’s comments suggested that Ukraine knew nothing about Russia’s condition that sanctions should be lifted,” said Alexandra Prokopenko, a political economy analyst in a paper for Carnegie Endowment for International Peace. “Accordingly, as far as Kyiv is concerned, the ceasefire in the Black Sea is already in effect and applies not only to ships, but also to ports. The moratorium on strikes against energy facilities, according to the Ukrainian side, has been in effect since March 25, while the Russian version dates it back to March 18.”

Ukrainian President Volodymyr Zelenskiy slammed the "dangerous signals" on the possibility of lifting sanctions on Russia imposed over its invasion of Ukraine.

"The signals that we have heard from Saudi Arabia or from that direction about sanctions, about the possible lifting... These are very dangerous signals," Zelenskiy said at a press conference after a summit of Kyiv's backers in Paris. The last thing he wants to see is the pressure on Russia eased. The EU’s position is that sanctions will only be withdrawn once the Armed Forces of Russia (AFR) entirely withdraw from Ukraine and that Moscow promises to pay reparations.

The situation is further confused, as SWIFT is based in Belgium and under EU law. At a meeting of the coalition of the willing in Paris on March 27, European leaders said they would not lift any sanctions and indeed, UK Prime Minister Sir Keir Starmer said more sanctions should be applied; the next day the European Commission announced it was starting work on a seventeenth sanctions package.

Secretary of State Marco Rubio, who is leading the US negotiations with Russia, is well aware of difficulties of removing the sanctions, which is demanded by Russia.

"We’re sort of going to analyse what they [Russia’s representatives] are raising and sort of study what exactly it is," Rubio said on board the plane en route to the US after visiting Jamaica, Guyana and Suriname. "It’s a host of sanctions, including sanctions that are not American.. so we couldn’t lift them if we wanted to. We’re going to sort of analyse what our team came back [from consultations in Riyadh] with. We’ll present those options to the [US] President. The President will make those decisions. We’re not there yet.”

Putin asked for very similar sanctions relief in the summer of 2023, which was refused and led to the collapse of the Black Sea Grain Initiative that had been brokered by the UN and Turkey a year earlier. However, the sanctions were only partial, as there were no formal sanctions against Russian food producers and exporters. Moscow obtained exemptions from the sanctions regime for food and fertilisers back in 2022 and has successfully exploited them. That makes the banks sanctions key.

In 2023, Russia exported $15.3bn worth of fertiliser, making it one of the world’s biggest fertiliser exporters – including to Western countries. Russian grain exports were also record-breaking, amounting to 71mn tonnes in the 2023/24 season, almost double the 42mn tonnes exported two years earlier, and also worth billions of dollars.

The SWIFT sanctions that were imposed only days after Russia’s invasion of Ukraine in 2022 and after Gazprombank was added to the list at the end of last year 85% of Russia’s banking assets are now included in the regime. While that has not prevented Russia from trading, they remain a major inconvenience. After the outgoing Biden administration beefed up US financial sanctions at the end of 2024 they are now cutting into Russia’s trade and current account surplus, as the Kremlin scrambles to find workarounds.

“Since the full-scale invasion of Ukraine, Russians have figured out how to bypass restrictions and obtain microchips, but the workarounds are complicated and expensive,” Kolyandr notes. “Equipment wear and tear and the difficulties of obtaining replacement parts continue to cause serious problems for Russian civil aviation, the transport sector and manufacturers.”

2014 sanctions deeply engrained

Most of the problems Trump faces in unilaterally lifting sanctions at the moment revolve around the need to coordinate the effort with an intransigent EU and UK, which have both made it clear they will not cooperate. However, US sanctions that were first imposed following Russia’s 2014 annexation of Crimea are much more deeply embedded in the woodwork, making it extremely difficult to roll back the regime at home as well.

While Trump has signalled a willingness to lift sanctions, the reality is that his powers to do so are significantly constrained. “The legal framework for most US sanctions is based on two laws: one passed in 1976; the other in 1977,” explains Alexander Kolyandr, an analyst at the Carnegie Endowment for International Peace in another paper. “While the President can issue executive orders, true sanctions relief requires Congressional cooperation.”

There has been a raft of legislation enacted even before the conflict in Ukraine began. The Kremlin well remembers the Jackson-Vanik amendment to the US Trade Act of 1974, which limited economic ties with the Soviet Union, that was used by the US to block Russia’s accession to the WTO, and took decades to repeal. In 2012 the Magnitsky Act was put in place that allows the West to target corrupt officials.

The 1977 law that gave the president the right to impose restrictions in moments of “national emergency” needs to be renewed each year in April, which Trump already extended in March as one of his first acts as president.

A second group of US sanctions on Russia falls under the 2017 Countering America’s Adversaries Through Sanctions Act (CAATSA), which codified many Obama-era restrictions by giving them the status of laws rather than just executive orders that are easily rescinded.

These sanctions range from those on dual-use goods, as well as those on individuals deemed responsible for undermining Ukraine’s territorial integrity. The outgoing Biden administration also used CAATSA to sanction major Russian companies, including defence conglomerate Rostec, state-owned banks Sberbank and Gazprombank, ship-builder Zvezda and the Moscow Stock Exchange.

Kolyandr says that because CAATSA sanctions are laws, not executive orders, if Trump wants to get rid of them, he will have to persuade Congress that the act is no longer in the US national security interest. Many in Congress remain sceptical of his peace process and want more, not fewer, sanctions.

“All of this means that there are actually only a few sanctions against Russia that Trump could lift on his own… While all the current US sanctions against Russia were imposed via executive orders issued by the president or a federal ministry, Trump cannot lift them unilaterally, even if he wanted to. While the President is responsible for some aspects of US foreign policy, Congress is in charge of regulating foreign commerce, which means that both branches of government have a say over economic sanctions,” says Kolyandr.

Testing the water 

It remains unclear if sanctions on Rosselkhozbank will be lifted, but Prokopenko argues that Putin is testing the water to see how far he can go with demanding sanctions be lifted.

“Washington would have to exert even more pressure on Ukraine, since the current version of the agreements – which does not include a moratorium on attacks on Ukrainian ports – does not give Kyiv anything. Moscow, meanwhile, is only required to make symbolic concessions in exchange for what would be – if implemented – a major compromise by Washington on the sanctions issue,” says Prokopenko. “Putin, for his part, was prepared to keep waging war against Ukraine regardless of who won the US presidential election. As far as he is concerned, therefore, Trump needs a ceasefire more than he does. Moscow’s attitude is: if the Americans need it more, let them put in all the effort.”

When Trump met with Ukrainian President Volodymyr Zelenskiy in a notorious press conference on February 28 that descended into a shouting match, Trump told the Ukrainian president that he had “no cards to play”.

According to Castellum.AI, a sanctions tracking platform, there have been 24,311 sanctions imposed on Russia. These include 7,384 by the US, 3,639 by Canada, 3,266 by Switzerland, and 2,482 by the EU. Trump regards all the US sanctions as cards that he can play in his transactional multipolar world model.

And it appears that he has little interest in hanging on to this deck of cards. The Trump administration has reduced its participation in working groups monitoring compliance with sanctions against Russia, Bloomberg reported on March 27, citing EU officials. They complained the US is not responding to request for help or cooperation in ongoing monitoring operators designed to prevent the import of parts and equipment needed for the production of weapons.

US Presidential Special Envoy Steve Witkoff bluntly said that if a ceasefire is agreed upon in Ukraine, sanctions against Russia will be eased on March 19.

Not just Ukraine

Trump has been playing his sanction cards in other disputes in which the US is involved. In the last month, the White House US offered Syria conditions for limited sanctions relief and also sent a letter to Tehran asking for suggestions for an outline to start talks.

While the attention has been focused on the Ukraine ceasefire talks in Riyadh during the last month, the White House is clearly attempting to do a wider deal that includes ending the problems in the Middle East.

Serbia has also obtained another 30-day sanctions waiver from US for the Russian affiliated oil company NIS, Serbian President Aleksandar Vucic said on March 28. 

"We succeeded! We have received a new 30-day postponement of sanctions for NIS," Vucic announced on Instagram.

NIS operates the only oil refinery in Serbia, which has annual capacity of 4.8mn tonnes and covers most of the Balkan country's needs. It was among the companies hit by a broad package of US sanctions against the Russian energy sector introduced in January, as former president Joe Biden was leaving office.

NIS  is majority-owned by Russia's Gazprom Neft  and Gazprom but has been hit with sanctions and is the country’s main supplier of oil and oil products. The previous waiver expired at midnight on March 27 and its status currently remains uncertain.

Dusan Bajatovic, CEO of Serbia's state-owned gas company Srbijagas, indicated optimism about a last-minute extension, stating that "there will be more delays of sanctions... but we cannot expect more than 30 days."

LNG sanctions on the list

For Putin, rolling back financial sanctions is a top priority but next on the list is LNG sanctions and there is a long list of similar sanctions on a wide variety of sectors that all present Trump with cards he could play. 

Russia aims to boost its LNG production from 34.7mn tonnes in 2024 to 100mn tonnes by 2035 amid the Western countries’ sanctions pressure on the sector, the Russian Energy Minister Sergey Tsivilyov said on March 21.

"Speaking about specific results, the minister noted that Russia retains goals on boosting the production of liquefied natural gas to 100mn tonnes by 2035, which will enable the country to take up to 20% of global market of this fuel," according to a statement following a meeting of the community council at the ministry.

Growing optimism for a peace deal between Russia and Ukraine has sparked discussions about the potential resumption of Russian gas flows to Europe. While it is not the base case, a partial restart of flows could drastically change the outlook for the European gas market.

With a 25bn cubic metre shortfall in supply, the EU is worried gas prices will spike over the summer, fuelling speculation that the surviving strand of the Nord Stream gas pipeline will be turned back on. At the same time, speculation is mounting that Trump may ease sanctions on the export of specialist LNG production equipment to Russia as part of Russo-US joint ventures in the Arctic. Trump’s administration has made it very clear it wants to do business with Russia in the oil and gas business. Currently, completion of the second train of the LNG 2 Arctic project has stalled, as it is unable to source sanctioned equipment from anywhere else. Without sanctions relief Russia will be unable to meet its production expansion targets, giving Trump an ace to play in his negotiations with Putin on Arctic deals.

All in all, Trump has a lot of cards to play in talks with Putin in many sectors. Secretary of State Marco Rubio suggested that the number of deals that could be discussed are wide-ranging, and that Russia has a historic opportunity for economic cooperation with the US if a ceasefire deal in the Ukraine conflict can be reached.

The fly in the ointment is the fact that US sanctions are only part of a broader Western sanctions architecture. The EU, UK and Switzerland continue to enforce their own regimes, many of which remain linked to Russia’s actions in Ukraine. Without coordinated relief from all parties, the prospect of meaningful sanctions rollback remains elusive.

Key US & EU sanctions imposed on Russia