CRS Reports on Impact of Russia Economic Sanctions

The Congressional Research Service ("CRS") reviewed the impacts of economic sanctions on Russia since the invasion of Ukraine in February 2022.

In the report, CRS stated that the sanctions on the Russian central bank and the limitation on the participation by Russian banks in SWIFT have had the greatest impact on the Russian economy. The result has been injury to Russian banks, capital flight and depreciation of the ruble. According to the report, these actions compelled the Russian government to close Russia's stock market for a month and limit government borrowing for the remainder of 2022. The sanctions also affected Russia's real economy, with many international companies limiting their business activity due to (i) concerns about potential future sanctions, (ii) threats of asset seizure by the Russian government and (iii) reputational costs of conducting business in Russia.

CRS also examined the impact of Russian sanctions on the global economy. CRS highlighted that the sanctions have (i) exacerbated supply chain disruptions, (ii) led to higher commodity prices (including oil, natural gas, wheat and various metals) and (iii) contributed to a slowdown in global economic growth. The CRS report noted that the sanctions on Russia, while multilateral, are not global, and that Russia may attempt to form stronger ties with countries outside of the sanctions coalition, such as Brazil, China, Mexico, Saudi Arabia and the United Arab Emirates.