Options for a Peace Settlement for Ukraine: Option Paper XVII – Sanctions Relief and Security Guarantees in the Ukraine Conflict

[Dr Erica Moret is Policy Director at the Swiss Centre for Policy Engagement, Polisync; Senior Researcher at the Centre for Global Governance at the Graduate Institute, Geneva and Senior Fellow on Sanctions and Humanitarian Affairs at the United Nations University Centre for Policy Research (UNU-CPR). She provided input to the 2022 Kyiv Security Compact on the role sanctions could play in an eventual security guarantee for Ukraine. The views expressed in this paper are the author’s alone.]

Summary

This paper lays out potential options available to the conflict parties involved in the war in Ukraine on the triggers, conditions and modalities for the relaxation of sanctions as part of an eventual peace agreement, and for their reimposition in connection with the verification and monitoring of the implementation of the settlement.  It also explores sanctions relief in relation to a possible security guarantee for Ukraine that could be linked to a wider negotiated peace agreement, whereby some sanctions could be reimposed through snap-back provisions in the case of breaches of the peace agreement. In reviewing earlier cases of sanctions easing across a number of jurisdictions, it finds that sanctions relaxation does not form a strategic part of most sanctions planning or execution.  Instead, protracted autonomous (or unilateral) sanctions regimes – imposed outside the UN framework – that are reinforced and broadened over time and imposed by a coalition of states and organisations are becoming the norm rather than the exception. At the same time, there is some useful precedent for sanctions suspensions that policymakers can draw on in the Russia context, should the need arise.  The United States (US), European Union (EU) and United Nations Security Council (UNSC) have all used sanctions relaxation with some degree of success (albeit often temporary in nature) in recent years.  This has taken a wide range of forms and sequences and has been used to fulfil a variety of objectives, including supporting various stages of conflict resolution and peace agreements. Sanctions easing remains unlikely in the Russian context in the immediate future, however, due to the severity of the security threat, lack of political will and absence of trust.  This article concludes that sanctions flexibility could nevertheless play a central role in all phases of an eventual peace agreement as well as in relation to a security guarantee for Ukraine, while outlining a number of key challenges and considerations surrounding implementation and coordination across relevant actors.  Factors such as timing, duration, coordination, communications, sequencing, reversibility, scope and strategic combination with other policy processes are all factors that will play an important role at such a point.

Introduction

A. What role for sanctions relief in the Ukraine conflict? 

A sweeping set of overlapping sanctions regimes have been imposed against Russian and Belarusian targets in response to Russia’s 2022 invasion of Ukraine. Those imposing measures include the US, EU, United Kingdom (UK), Canada, Australia, New Zealand, Australia, Japan, Switzerland and South Korea. In addition, a number of other non-EU European countries have also opted to align with some EU restrictive measures against Russian targets, in line with longer-term patterns of sanctions alignment that mark recent decades. Representing some of the broadest  sanctions adopted against targets under country-based regimes in recent times, the combined set of measures include a broad range of targeted and sectoral restrictions and builds on earlier measures adopted since Russia’s 2014 invasion of Ukraine. 

Most of the focus on sanctions imposed against Russian targets in relation to its 2022 invasion of Ukraine centres on their more punitive economic impacts and how further pressure can be added through additional rounds of new measures. Focus on how they may be used as a tool of leverage, including through a more flexible use of sanctions imposition and easing, is currently absent from most debates on the crisis. This paper draws on earlier research into the role of sanctions relief in ceasing conflicts (and in relation to other international security challenges) and outlines a number modalities for how sanctions easing can take place as part of a negotiated settlement, including in relation to a security guarantee for Ukraine. 

B. Understanding the strategic role played by sanctions easing 

The use of sanctions relief as leverage to reach negotiated settlements of conflicts and other diplomatic crises appears to represent a useful tool, though it remains one that is poorly understood by academic and policy communities, with a few exceptions. Trends in international sanctions practice suggest that protracted sanctions regimes – often spanning more than 10 years– are becoming the norm. Further, their punitive functions have become more prominent, while their role as an instrument of leverage can sometimes be overlooked or under-prioritised. Studies suggest that a balance should be found between the incentivising vs punitive functions of sanctions (“carrots” and “sticks”) and that these should be combined strategically for optimal impact. In practice, this can mean a more flexible and streamlined process of sanctions suspensions and tightening, which can be used to encourage change in the target in question.  

Not much attention has so far been devoted to understanding how sanctions relaxation can be used to pursue different policy aims, including negotiated settlements of conflicts or the establishment of security guarantees. Similarly, policymakers acknowledge that sanctions are typically imposed without substantive consideration of how, and under what conditions, the measures will be eased. In parallel, it is rare for sanctioning actors to communicate to the target what they need to do in order for the sanctions to be lifted. A recent exception has been in relation to the South Sudan UN sanctions regime, which includes a set of 34 benchmarks for lifting sanctions, spanning political and governance issues, as well as disarmament and security sector reform (or SSR).

C. Lessons learned on sanctions relaxation and conflict resolution

Earlier cases of sanctions easing provide a number of lessons that can be useful for those engaged in seeking solutions to the war in Ukraine. First, a number of leading sanctioning bodies have employed sanctions easing at various points in recent history relating to a wide variety of objectives. This includes the UNSC (multilateral sanctions), the EU and the US (autonomous or unilateral sanctions that can either supplement UN sanctions or be imposed independently).  Earlier studies suggest heterogenous approaches to using sanctions as leverage, with the EU seemingly more willing to use sanctions relief in diplomatic processes and negotiated settlements as compared to the US.

Second, sanctions easing can be used to address a long list of criteria (that could be expanded further on a context-specific basis). It could be used to: incentivise behaviour change (e.g. cessation of hostilities); encourage adoption of a diplomatic agreement (and disincentivise spoilers); stigmatise individuals or entities for engaging in particular activities (e.g. those that could undermine a peace agreement); wear down support for certain organisations or groups (by lifting targeted sanctions against certain targets and not others); reward actions already taken (in recognition of positive steps taken by the target); signal the end of a given event (such as the end of a war); or improve diplomatic relations (e.g. in order to facilitate a return to negotiations in the absence of talks).

Third, according to one recent study, a broad range of sanctions easing approaches can be used as described below in Box 1.

A combination of the approaches listed above can be adopted in unison. They can also be coordinated among different sanctioning bodies, where multiple sanctions regimes overlap with one another in any given country or context. Sanctions imposed in relation to the war in Ukraine should be assessed on a case-by-case basis, including in relation to motivations and past behaviour of the target in adhering to agreed outcomes. 

Some key conclusions can be drawn regarding sanctions easing: 

• Conditionality: Sanctions lifting can be made conditional on the reaching of certain benchmarks or the cessation of certain behaviours by the target. 
• Coordination: The easing of sanctions can be carried out via a coalition of interested parties (e.g. the US and EU) and this could be planned strategically to serve a variety of objectives, such as in support of peace negotiations or the implementation of a peace settlement. 
• Adaptability: Sanctions can be imposed and suspended in a flexible manner to reflect a changing situation on the ground (even if this is not typically standard behaviour). 
• Calibration: Sanctions easing can be tailored according to any concessions made by the target, including interim progress (e.g. in the implementation of key commitments in a peace settlement). 
• Reversibility: Sanctions relaxation need not imply a loss of leverage over the target as most forms of sanctions relaxation can be reversed if the target resumes behaviour deemed problematic by the sender. The degree of ease with which sanctions measures can be reimposed depends on the administrative and legislative frameworks in question.
• Incentivisation: In certain instances, it might be appropriate for sanctions easing to be used as a way to incentivise certain actions (such as reaching a ceasefire agreement) and at other times it can be used to reward particular behaviours (such as cooperatively implementing a peace agreement over a specified period of time). 

Drawing on earlier cases of sanctions easing, Box 2 summarises ways in which it has been used against different targets in the pursuit of varied objectives, as shown in a recent study.

D. Measuring success in sanctions relaxation in relation to conflict resolution 

Success rates in earlier cases of sanctions easing warrants further research, but examination of some leading examples suggests a number of challenges regarding efficacy. First, success of sanctions easing can be easily reversed. Whereas earlier easing of UN sanctions against members of the Taliban, and the relaxation of EU restrictive measures in relation to targets in Myanmar and Belarus, could be deemed successful at the time (where positive change occurred at the time of the easing), later events led to a return to the behaviours that first sparked the sanctions. 

Second, tentative success of sanctions suspensions can be undone by actions taken by the party imposing sanctions. An example is that of US sanctions against Cuba, where certain measures were relaxed under the Obama presidency, linked to a notable warming in diplomatic relations between Washington DC and Havana. These steps forward were later underdone by policies adopted under the so-called Maximum Pressure campaign of the Trump presidency. Third, certain behaviours may be easier to incite via sanctions easing than others. For example, it may be more straightforward to encourage warring parties to return to peace talks, rather than to actually reach a comprehensive peace agreement. 

These early findings suggest that policymakers should not place too much weight on the role that sanctions relaxation could play in ending the war itself (in isolation of other policy tools), but instead see sanctions flexibility as a strategy that might play a valuable role at particular stages of the conflict and its eventual resolution. Sanctions easing could be linked to the accomplishment of these (and/ or other) phases of a settlement implementation, as well as the ‘performance’ in relation to particular actions. Equally it could be linked to decisions made by an implementation body, such as a commission or monitoring body. This could take place at various points of the mediation and peace process, from incentivising negotiations, to reaching a ceasefire, to agreeing a peace agreement and to maintaining the peace agreement over time.

E. Which sanctions could be lifted as part of a negotiated peace settlement? 

For involved parties, calculations on sanctions easing should centre around a number of key areas: 

1. Under what conditions should (or could) some of the sanctions be lifted? 
2. Which sanctions should be lifted and when? 
3. Should sanctions easing be planned, coordinated and monitored across sanctioning powers via a common mechanism or be done by individual actors independently of one another?
4. To what extent should the likelihood of sanctions easing be communicated to the target and how?  
5. Would some or all areas of sanctions lifting be done through close negotiation with the Russian Government, or would suspensions be carried out without consultation?  
6. Under which conditions would the sanctions be reapplied, under what time frame and under whose decision?  
7. Would any legislative changes be required on the part of sender countries to ensure that sanctions lifting (and any eventual reapplication) could be done in a flexible and responsive manner to changes on the ground?  

F. Role of sanctions flexibility in a security guarantee for Ukraine 

Sanctions could play a role in a future security guarantee for Ukraine, used for the purpose of protecting the country from future armed attack or acts of aggression by Russia. There is not much precedent to draw from, given that security guarantees (in the true legal sense of the word) have not been used extensively in recent decades, nor have sanctions played a central role in those that have been deployed. Additional layers of sanctions (that build on the already sweeping set of international measures in place) are unlikely in any notable sense as part of an eventual security guarantee. More feasible, however, is the possibility that some of the current sanctions in place could be suspended temporarily in relation to a larger peace agreement (encompassing multiple agreements and other instruments), with the condition that some measures would be reimposed (most likely through snap back provisions) as part of the security guarantee instrument, in instances of new attacks or aggression by Russia.  

If sanctions are to play a role in a security guarantee, guarantor states should include some of those countries or organisations that would be in a position to raise the price (including through sanctions) for any further aggression employed by Russia against Ukraine. This could include the likes of the US, UK and Canada. While politically challenging, it could also be important to find a way for the EU to participate as a guarantor, otherwise EU member states would not be able to use their own flexibility in EU restrictive measures as part of the deal (given that member states adopt sanctions through consensus via the EU). 

The trigger event for any sanctions imposed (or re-imposed) in relation to the security guarantee should be clearly articulated and specific. In the words of one recent study, they should employ language that is well defined under international law, such as “armed attack” (Article 51 of the UN Charter) and “act of aggression” (GA Resolution 3314, XXIX). This could lead to the guarantor states responding through sanctions reimposition, alongside other political, economic or other measures. Such a response using sanctions could take a number of forms, including re-imposition of a full (or partial) set of autonomous sanctions by some or all parties (e.g. the US, EU, UK, Canada, Switzerland etc.) that may have been lifted during a negotiated settlement. This could be graded according to a catalogue of potential sanctions-based responses.  

On 13 September 2022, a proposal for future security guarantees for Ukraine was published by Office of the President of Ukraine together with the strategic consultancy firm, Rasmussen Global (the Kyiv Security Compact). It proposes that international sanctions should remain in place until a full withdrawal by Russia has been carried out, in addition to the payment of reparations and the receipt of appropriate guarantees from the Kremlin that protects against repetition of aggression. 

Conclusion 

Sanctions easing in the context of the Ukraine crisis looks highly unlikely at the present time. First, as earlier case studies suggest, a protracted set of sanctions regimes – that increase in depth and breadth over time – remains the most likely scenario for the time being. Second, political appetite among sanctioning powers is currently geared towards a more punitive stance towards Russia in light of the severity of the situation and the unpredictability of President Putin’s decision-making. Third, earlier behaviour of the Putin Government has not suggested a positive response regarding the use of sanctions as leverage. As such, mutual trust between relevant parties might not be strong enough to support sustained commitment to any concessions or changes in behaviour that might eventually be tied to sanctions relaxation through a negotiated peace agreement, so that they would not be undone at a later stage. In spite of these considerations, some form of sanctions easing is likely to play a role in an eventual peace settlement, which might also include a security guarantee for Ukraine. At such a point, policymakers will have access to a menu of available options regarding the ways in which sanctions flexibility could be used in parallel with other diplomatic talks and wider policy instruments and processes. Factors such as timing, coordination, communications, sequencing, reversibility, scope and strategic combination with other policy processes are all factors that will play an important role at such a point.