Post

1/ "Secondary Sanctions" - What are they, and how do they work? Since Donald Trump is floating them against Russia's trading partners, and with absolutely no expectation he won't change his mind again next week and declare Zelenskyy the real villain, I thought I'd do a (long, sorry) explainer.

2/ First, what are sanctions? Sanctions are rules that make it illegal for my citizens to conduct certain forms of business with whomever the sanctions target. Who they apply to (targets), and what kind of business they cover (scope), can be vary in breadth.

3/ For example in terms of targets the EU sanctions individuals, entities (companies or organizations) and entire regimes. And in terms of scope they might ban travel, freeze assets, restrict sales of certain goods or ban all financial interactions.

4/ Sanctions tend to have a range of objectives: a) Symbolically signalling outrage and punitive intent; b) Denying a state weapons or the inputs it needs to make weapons; c) Applying economic pressure toward policy changes or regime change

6/ Moreover, once you sell a good to a 3rd party it's generally out of your hands. There are limits to how much you can reasonably expect the seller of a microchip to vet a potential client to make sure they're not going to onsell it to someone who onsells it to someone who onsells it to Russia.

7/ A challenge sanctions have is that they're limited by how indispensible you (and those who join you) are to the sanctioned party. If you won't sell Canada AK-47's but the US will sell them M4 Carbines, then your sanctions are an inconvenience but not a true impediment to Ottawa's war machine.

8/ When wealthy Russians found themselves unable to take their mistresses to Milan or Paris, they started flying them to Istanbul and Dubai. When Europe stopped buying Russian gas, they started selling it to China and India.