Stop the ‘Blood Coal’ That Funds Russia’s Occupation of Ukraine

Moscow is selling Ukrainian coal to subsidize its military operations. Western sanctions must end that.

While the American public is focused on Donald Trump’s Ukraine-centered impeachment trial, Ukrainians are still fighting an armed conflict with Russia. Moscow is funding its military actions and illegal occupation by the illicit “blood coal” trade from the so-called Donetsk and Luhansk People’s Republics. Ukraine needs the international community to sanction the players who facilitate this trade.

A quick reminder: in 2014, the United States, the European Union, Canada, Australia and a variety of other countries imposed sanctions against Russia in response to its illegal actions in Crimea and eastern Ukraine. The U.S. and the EUhave consistently stated that sanctions won’t be lifted unless Moscow complies with the Minsk Agreements, enables the peaceful resolution of the conflict in Donbas, and returns the annexed Crimean Peninsula to Ukraine.

Russia’s illegal presence in Ukraine and the hybrid war tactics it is honing there are serious threats to the wider global security. Moscow used tactics pioneered in Ukraine — cyber theft, spreading disinformation — to interfere in the 2016 U.S. election, and is continuing to do so in advance of this November’s polling. Unless the Kremlin faces stiffer repercussions, it may further violate international law.

Existing sanctions are having some effect, despite Putin’s unaltered foreign policy and continued reluctance to abide by international norms. The Russian economy remains encumbered by them, with foreign investment levels dropping precipitously. There is also one undeniable argument proving that sanctions are far more effective than Moscow lets on – and we just need to push further. In fact, Russia and sanctioned Russians have undertaken major efforts to get them lifted.

But there are flaws in the sanctioning regime. Insufficient coordination between EU and U.S. officials, as well as clear gaps in the sanctions lists, have allowed Russia to escape the full consequences for its actions.

Among the individuals who have so far dodged sanctions, and who play a leading role in the coal trade that finances Moscow’s Ukraine adventurism, is Ruslan Rostovtsev. Through his companies, Rostovtsev transports coal from the Donbas region to Russia, where it’s repackaged and sent to Europe with a Russian label on it. The profits support the pro-Russian militants and bogus embassies of the Donetsk and Luhansk People’s Republics in Marseille and Turin. It’s far from surprising that the separatists have awarded Rostovtsev a series of medals. What is, however, startling, is that neither EU nor U.S. officials have taken notice of such schemes. His activities are destabilizing; they require a firm and urgent response.

U.S. and EU officials must also work together to close the gaps that are preventing existing sanctions from having their full intended effect. Poor coordination to date has fostered a patchwork of sanctions whose inconsistencies allow key people and businesses, such as Rostovtsev and his coal trade, to evade them. A good first step would be for the U.S. State Department to restore the position of a sanctions policy coordinator or create a new post with similar authority. Other helpful suggestions, including specific individuals and companies that should be targeted, appear in the recent report published by the International Centre for Policy Studies with the Ukrainian Institute for the Future and Polish Initiative Sanctions 2020.

Now more than ever, it is critical to renew and revise these sanctioning efforts, which are the diplomatic equivalent of Javelin missiles. Other than armed conflict, sanctions are the only way to improve Ukraine’s negotiating position in its asymmetrical struggle with the Kremlin. They are also crucial to persuading Putin to hew to international law. In a nutshell, Ukraine needs more sanctions — more diplomatic missiles targeting all levels of the syndicates that carry out Putin’s bidding – and we cannot do this without the West’s help. 

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