The Crimean Annexation Crisis and Its Economic Consequences: Eu Sanctions, U.S. Sanctions and Impacts on the Russian Economy

Abstract

In March 2014 the Crimean Peninsula -namely the Republic of Crimea and Sevastopol-was annexed from Ukraine, thereby becoming two federal subjects of the Russian Federation. While the Western powers consider the annexation to be illegal, as it breaches the international law and violates territorial sovereignty of Ukraine, the Russian Federation claims that the referendum in which the Crimean population chose to be part of Russia is completely legitimate. Following the annexation of Crimea, the Western powers, including the EU and the U.S. imposed several restrictive measures on Russia in order to influence the Kremlin's foreign policy toward Ukraine. By drawing on the theory of international economic sanctions, this paper seeks to analyse the content and application of sanctions and assesses whether the sanctions succeeded in changing the geopolitical trajectory of the Russian Federation.

The Annexation of Crimea and EU Sanctions: An Ineffective Response

“…The end of the Cold War prompted heated debate between the newly independent Ukraine and the Russian Federation over who would control the peninsula. In 1997, an agreement was reached that allowed Crimea to remain under Ukrainian control while permitting Russia to keep a key division of its navy (the "Black Sea Fleet") stationed in Sevastopol, the largest city in the region (Sivis, 2019). Tensions seemingly cooled until 2014, when domestic upheaval in Ukraine allowed the Kremlin to further pursue its geopolitical interests.…”

“…This goal was reciprocated by the EU, which sought to expand its membership to ensure greater stability in Europe and to encourage democratic developments in the eastern part of the continent (Shyrokykh, 2018). However, in 2004, widespread protests erupted in response to accusations that the presidential election had been rigged for pro-Russia candidate Viktor Yanukovych (Sivis, 2019). This "Orange Revolution" was ultimately quelled with a run-off election, which led to an electoral victory for the pro-Western candidate, Viktor Yushchenko (Sivis, 2019).…”

“…However, in 2004, widespread protests erupted in response to accusations that the presidential election had been rigged for pro-Russia candidate Viktor Yanukovych (Sivis, 2019). This "Orange Revolution" was ultimately quelled with a run-off election, which led to an electoral victory for the pro-Western candidate, Viktor Yushchenko (Sivis, 2019). Tensions once again boiled over in November 2013, when now President Yanukovich, who won the 2010 election, announced that Ukraine would pull out of an association agreement with the EU designed to lessen travel barriers (Silva & Selden, 2019).…”

“…Amidst this chaos, Russia moved troops into Crimea, and justified this military operation under the guise of protecting civilians and de-Nazification (Rywkin, 2015). A referendum was then organized in March 2014, which resulted in 97% voting in favour of Crimea joining the Russian Federation (Sivis, 2019). While widely seen as a violation of international law by the West, Crimea has nonetheless since remained under de facto Russian control (Schmidt-Felzmann 2019).…”

“…While widely seen as a violation of international law by the West, Crimea has nonetheless since remained under de facto Russian control (Schmidt-Felzmann 2019). Moreover, pro-Russia separatist movements supported by the Russian government have also engaged in low-level conflict in the Eastern Ukrainian regions of Donbas and Luhansk since 2014 (Sivis, 2019).…”