Flexible Adaptation:

How Are Russia and Iran Dealing with US Sanctions? (Panel Discussion)
Flexible Adaptation:
December 12, 2021

InterRegional for Strategic Analysis held a panel discussion in November 2021 entitled “The View from Moscow: How Are Russia and Iran Dealing with US Sanctions?” The panel hosted Dr. Violetta Arkhipova, a senior researcher at the Russian Academy of Sciences and the official representative of the Economic Advisor to President Putin on matters of international cooperation, as well as a member of the Eurasian Economic Commission led by the Minister of Integration and Macroeconomics.

The panel centered on three main topics, which were: (1) the features of the sanctions imposed upon Russian and Iran, (2) the effect of these sanctions on both countries, and (3) Moscow and Tehran’s strategies for dealing with these sanctions. The most important points from this panel discussion can be summarized as follows:

Main Features of the Sanctions

The panel discussion affirmed that the main features of the sanctions imposed on Russia and Iran by the US were as follows:

1. Wide Variety of Sanctions Imposed: There have been a wide variety of sanctions imposed on Moscow and Tehran, including sanctions on individuals, organizations, and particular commodities and services. There have also been multilateral and bilateral sanctions. For the most part, sanctions imposed at the collective level have had a greater impact than other kinds of sanctions. There is also a kind of sanctions known as “experimental sanctions,” which aim to test out what the effect of such sanctions would be on a person or entity.

2. Focus on Commercial and Financial Sectors: These sanctions have a negative impact on all parties upon which they are imposed. These negative consequences are most evident in the case of wide-reaching or long-term sanctions. In the case of both Russian and Iran, the commercial and financial sectors are generally hardest hit by sanctions, including experimental sanctions. The US has been the source of the most serious economic sanctions on Moscow and Tehran, followed by the European Union.

3. Ambiguous Reasons for Washington’s Sanctions: Washington’s reasons for imposing sanctions on Russia and Iran have not been openly stated. The US is using these sanctions as a key tool for strengthening its soft power. Even though US sanctions on Moscow and Tehran have not achieved their desired adverse effects, Washington continues to heavily rely on sanctions as a means of punishing individuals or entities, without providing clear reasons for doing so.

Complex Ramifications

The panel discussion emphasized that the main consequences of US sanctions on Russia and Iran were as follows:

1. Limited Impact on Russian Economy: Based on one of the research models used to measure the extent to which sanctions had affected the Russian economy, it appears that the Russian economy has suffered as a result of sanctions, but not to the extent that the countries imposing these sanctions had expected or hoped. The Russian financial sector has been the hardest hit by sanctions. Domestic economic policies in Russia have played a key role in mitigating the severity of these sanctions.

According to the aforementioned study, Russia was subjected to a series of wide-reaching and intensive sanctions between 2014 and 2016. The most important of these was when the EU linked the lifting of sanctions to the full implementation of the Minsk Protocol in 2015. According to this study, the Russian ruble took the most significant hit in 2015. Russia has faced a complex variety of sanctions, and there are ongoing effects to continue to expand their scope.

2. Sanctions Responsible for One-Fifth of Iran’s Economic Challenges: Iran is one of the most interesting cases for researchers studying sanctions, particularly since Tehran has been continually subjected to different kinds of sanctions since the Iranian Revolution in 1979. According to one of the research models that was used to measure the extent of the impact of these sanctions on Iran, 20 percent of the economic challenges that Iran has faced were caused by Western sanctions in general, and US sanctions in particular, while 80 percent of economic difficulties were caused by domestic factors.

3. Sowing Division in the International Order: The consequences of US sanctions on Russia and Iran also have ramifications for the rest of the world—in other words, they produce a snowball effect. Even when the impact of sanctions on Russia and Iran is more limited, these sanctions often cause greater rifts and polarizations between countries, in addition to sending shocks through the international order.

Most importantly, third-party countries and countries that are not directly targeted by sanctions are forced to deal with abnormal circumstances as a result of US sanctions on Tehran and Moscow. These third-party countries are trying to maintain strong relations with the US, as the entity that imposed the sanctions, while at the same time to manage relations with Russia and Iran, the countries targeted by the sanctions.

Strategies of Resistance

The panel discussion observed that Russia and Iran have adopted a series of strategies in order to deal with US sanctions and mitigate their negative impact. These strategies can be summarized as follows:

1. Relying on Economic Reform: Both Russia and Iran realized early on that strengthening their own economic capabilities and strengthening their ability to make use of these capabilities through economic reform programs and creating knowledge- and innovation-based economies would be a crucial mechanism for overcoming the ill effects of Western and US economic sanctions on both countries. Therefore, both countries have relied on building strong domestic economic capabilities in order to strengthen their ability to resist sanctions and neutralize their effects.  

2. Strengthening Economic Relations with the East: Both Russia and Iran have sought alternatives through which to counter US sanctions and reduce the severity of their negative impacts. One of the main solutions that both Moscow and Tehran adopted was strengthening economic relations with the East. For example, Russia and Iran have tried to improve their economic relations with China, and have benefitted greatly from increased economic resilience in the face of sanctions as a result of these ties. Moscow and Tehran have also tried to join certain regional economic blocs in order to create new pathways for economic cooperation and to strengthen solidarity between countries targeted by sanctions. For example, last September Iranian President Ebrahim Raisi announced that the country had obtained full membership in the Shanghai Cooperation Organization, which he proclaimed a significant diplomatic achievement, given the vast economic opportunities it would offer Iran.

3. Strengthening Diplomatic Positions Against Washington:  Russian and Iran have taken various economic measures against US sanctions, whether through bolstering their own economic capabilities or entering into international economic partnerships. However, they have also taken matters further by adopting diplomatic stances in order to demonstrate that they can resist US sanctions and hostile stances. For example, Moscow has repeatedly countered Washington’s diplomatic positions in various international forums and institutions.

In conclusion, the participants in the panel discussion affirmed that the US sanctions imposed on Russia and Iran were notable due to the far-reaching scope of these sanctions, and because of the ways in which Washington has used sanctions as a key mechanism against these two countries. The panel indicated that although Russia and Iran have been subjected to similar kinds of US sanctions, they have responded in different ways, even if their overall approach has been the same.


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