Sanctions may work with time — but right now, Ukraine is on its own
Moscow has been hoarding cash — one expert says it may take a year for Putin's circle to feel any pain
The adjectives flew fast and furious on Thursday as Western allies — Canada included — described the latest round of sanctions aimed at Russia for its invasion of Ukraine.
Severe. Harsh. Punishing. Massive.
Each package was delivered with precision and conviction by every nation — despite the growing skepticism among foreign policy experts about their potential in the short term to halt the bloody offensive that began overnight.
The question of how much Russia already has anticipated Western sanctions and insulated itself from their effects is becoming a matter of active debate for those who've followed the conflict from the outset.
Even so, it was a day for tough talk.
"These sanctions are wide-reaching. They will impose severe costs on complicit Russian elites and they will limit President [Vladimir] Putin's ability to continue funding this unjustified invasion," Prime Minister Justin Trudeau said.
The latest round of sanctions announced by Canada targets 62 individuals and organizations, including members of the Russian elite and their family members, major Russian banks and the country's national security council. Effective immediately, the federal government has stopped issuing export permits for Russia-bound products.
Belatedly, Canada has sanctioned the Wagner Group, a notorious Russian paramilitary organization which has been on the United States and European Union sanctions lists for years.
Washington also took aim at Russia's so-called "corrupt billionaires" and slapped export bans on technology to "severely" limit Moscow's ability to service its military and aerospace sector.
In Britain, Russian banks had their assets frozen, 100 individuals close to Putin were sanctioned and Aeroflot, Russia's national airline, was banned from entering the U.K.
'Nothing is off the table'
The longstanding threat to bounce Russia from the SWIFT international payment system — referred to by some analysts as the "nuclear option" of sanctions — remains unfulfilled, but British Prime Minister Boris Johnson insisted that "nothing is off the table."
U.S. President Joe Biden said there was reluctance among European allies to invoke the SWIFT option and he also acknowledged that sanctions take time to be felt. He was asked about the effectiveness of the penalties. "Ask me again in a month," he replied.
Ukraine — which reported the deaths of 137 soldiers after the first day of fighting — might not have that long, said Matthew Schmidt, an associate professor and national security expert at the University of New Haven in Connecticut.
Since being sanctioned for the annexation of Crimea in 2014, Russia has been adapting its economy and living with the penalties, even though they have dramatically lowered living standards in the country.
Russia's massive cash reserves
The process has only accelerated in the last couple of years, to the point where banks and oligarchs now on the list have been squirreling away massive cash reserves, said Schmidt.
Russian ratings agency ACRA reported last December the country imported $5 billion US worth of banknotes in foreign currencies — almost double the amount the year before — and the action was taken in anticipation of sanctions.
Putin's inner circle has also been hoarding cash.
"I would guess it'll be a year before the real pain bites down on them," said Schmidt.
Since it already had declared it would not fight for Ukraine, the West had no choice but to impose sanctions, said Joanna Hosa, a foreign policy analyst who formerly worked as a program co-ordinator for the European Council on Foreign Relations.
She questions how much and how long Russia has been preparing for this moment.
"They knew if they were going to take more territory in Eastern Ukraine ... there would be sanctions, whatever the extent of its actions," Hosa said. "So they were planning for it. They were planning for any sort of confrontation."
The Ukrainian Canadian Congress (UCC), which has been pushing the Liberal government for months to impose stiffer sanctions, greeted the latest round with cautious optimism but said the allies need to go further to relieve immediate suffering.
Ihor Michalchyshyn, the executive director of the UCC, said governments, including Canada, should be shipping more lethal weapons to help the country defend itself.
The UCC also wants the international community to implement a no-fly zone over Ukraine, as NATO did over Bosnia during the Balkans war in the early 1990s.
"That would immediately protect civilians from the kind of bombardment we've seen happening," Michalchyshyn said.
Russia, he said, only pays attention to exercises of strength and hard power.
"Putin doesn't pay heed to what the international community thinks of him and I think we need to be cognizant of that."