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Pro-Russian demonstrators in Eastern Ukraine are sponsored by the Kremlin to create chaos and therefore act as a pretext for Russia’s military intervention. With a minimum of 40,000 Russian troops massed on the border threatening to get into the Donetsk, Kharkiv and Luhansk regions in Ukraine, President Barack Obama has alerted of “effects.” The Obama administration can deter Russia’s aggression by articulating certain sanctions on Russia’s banking, mining, and energy sectors.

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Here are some sanctions that provide indicating to “pay a cost.”

– Impose sanctions on Russia’s central bank, Russian industrial banks, and financial services, thus rejecting Russia access to the international dollar-denominated economy.
Punish foreign banks that do company with Russia, blocking them from the U.S. banking system.
Freeze Russian possessions in U.S. and European accounts, triggering rating firms to downgrade Russia’s creditworthiness, precipitating capital air travel from Russian companies, and devaluing Russia’s securities market.

– Target oligarchs in Putin’s inner circle by freezing their abroad possessions. Wealth holders have mostly disregarded Russian regulations disallowing state officials and their families from holding checking account or other monetary possessions abroad.
Guard against money laundering by monetary institutions and affluent people, using cash or rare-earth elements.

– Ban the export of luxury goods from Russia, such as furs and caviar, and the export of luxury goods to Russia, such as high-end autos and “haute couture.”.
Prevent credit card business such as Visa and MasterCard from servicing customers in Russia. Visa and MasterCard have already stopped processing payments to Rossiya Bank, which was sanctioned in March, in addition to SMP bank.

– Black-list Russian banks in Crimea such as Genbank, which opened a branch recently, also Sberbank and VTB, which are considering branches in Crimea.
Need U.S. public funds with investments in Russia to completely disclose holdings and alert investors of danger.

– Suspend Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which handles information flow on financial transactions. SPEEDY shares 15 million deal messages daily in between 9,000 financial institutions in 209 areas and countries.
Other sanctions and export controls might target commodities and the energy sector. Sanctions might limit the transfer of technology along with investments in energy exploration and infrastructure. Measures might likewise be required to avoid U.S. and European insurers from providing marine-cargo insurance coverage for products coming from Russia.

– Critics say that sanctions would damage to the U.S. economy. Russia has restricted trade ties with the United States. Europe, nevertheless, has a lot to lose. The EU accounts for about three-quarters of foreign direct investment in Russia. Europe’s annual trade turnover with Russia is nearly $400 billion.

– The United States can not act alone. To be reliable, sanctions should be multilateral. The Obama administration ought to immediately engage EU Member States on a collaborated technique. Commonalities will be hard to find not only between the U.S. and EU, but in between Europeans. The EU’s 28 Member States have differing exposure to Russia’s economy. Germany and the Baltics states are mostly based on gas supplies from Russia; France will hesitate to give up its arms sales. European nations see sanctions in a different way. Their distinctions aggravate the challenge of trans-Atlantic cooperation.

– Sanctions must not be seen as an instrument to punish Russia. A credible hazard of sanctions can adjust Russia’s approach. Economic and political measures are far more effective to fight that might embroil the area and involve NATO members. Articulating certain “consequences” can assist advance the objective of conflict avoidance.