How Will the West Respond to Navalny’s Prison Sentence?

The sentencing of Alexei Navalny to two years and eight months in a penal colony on what is widely seen as a politically motivated charge has resulted in some of the swiftest and most forceful condemnation of the Kremlin’s behavior since Russia annexed Crimea in 2014.

Western leaders have been near unanimous in calling for Navalny’s “immediate and unconditional release,” as the U.S. State Department said in a statement issued minutes after his sentence was read out in court Tuesday.

Others went further. British Prime Minister Boris Johnson slammed the ruling as “pure cowardice,” while German Chancellor Angela Merkel said it was “far from any rule of law.”

Calls for the West to impose stricter sanctions on the Kremlin — already loud following Navalny’s poisoning last summer and detention on his return to Russia in January — have grown stronger still in recent days.

Navalny’s team has published a list of 35 Russian business and political elites they want the West to target with hard-hitting asset freezes and travel bans. Leonid Volkov, the Kremlin critic’s key aide, based in Lithuania and therefore one of the few members of Navalny’s team not behind bars at the moment, said their key goal is “to increase pressure on Putin from both inside and outside Russia.”

“We will make sure that no world leader talks to Putin about anything other than the release of Navalny,” he said in a Telegram post after Navalny was sentenced.

But experts tracking the West’s relations with Russia doubt that governments will back up their swift condemnations with a tough policy response.

Securocrats and siloviki

“If you look at when Navalny was actually poisoned — which is arguably more serious than his imprisonment — the response was a bit of an anti-climax,” said Philip Worman, managing director of the GPW political risk firm.

“There were some EU sanctions on a few obscure Russian ‘securocrats’ and nothing more. So I don’t see a massive wave of sanctions coming up.”

Hitting more of those ‘securocrats’ — mid-ranking figures in Russia’s security, military and defence apparatus — is likely to be the core of the West’s response this time round as well, analysts expect. That would mean travel bans and asset freezes on those with a narrow, direct connection to Navalny’s arrest and sentencing, such as the judges and prosecutors involved in the trial, said Eurasia Group analyst Jason Bush.

“More of those sanctions are inevitable. And there’s no shortage of people the West could target,” he said, pointing to Russia’s sprawling intelligence services and the names published as part of last year’s investigation into Navalny’s would-be assassins conducted by Bellingcat and independent Russian outlet The Insider.

For the Kremlin, personal sanctions are baked in — a price of doing business with a West it depicts as Russophobic and whose security services it brands as Navalny’s secret puppet masters.

“Of course, the Russian authorities expect sanctions — they’re perfectly aware of this possibility,” said Vladimir Morozov, an expert at the Russian International Affairs Council, a think tank close to the Kremlin.

“But since 2014 they’ve taken great steps to alleviate the most serious negative impacts of both the existing and potential future sanctions. New personal sanctions won’t in any way harm the Russian economy or affect the political structure of the country,” Morozov added.

“The question is how much further are they going to go?” Not much, seems to be the emerging consensus. Though there would be no shortage of options should governments opt for a tougher response.

At the top end is what analysts call the “nuclear option.” That would involve the U.S. prohibiting Western financial outfits trading or holding Russia’s ruble-denominated government bonds (OFZs) — around a quarter of which are currently owned by foreigners.

Movements in financial markets suggest that is unlikely. The ruble is down less than 3% against the dollar compared to where it was trading before Navalny was poisoned — a tiny movement for a typically ultra-volatile currency like Russia’s. In the first 24 hours after his sentencing Tuesday, it even gained in value.

Other measures the U.S. administration could take include restrictions over what goods can be traded with Russia, bans on working with specific Russian firms or investing in entire sections of the economy. 

But Washington may be cautious about taking such drastic steps again after it sent ripples through the global economy in April 2018 by sanctioning Oleg Deripaska’s metals firm Rusal, which accounts for almost 6% of global aluminum production. Since then, the U.S. has not sanctioned a single major Russian company, Worman highlighted.

In Europe, talk of a stronger response centers around the 10-billion-euro Nord Stream 2 pipeline. Despite France joining calls to ditch the project, Germany has already said that while it backs a strong united European response, the idea of scrapping Nord Stream 2 is firmly off the table.

The Biden factor

Two new factors have emerged since the last time the West mulled Russia sanctions.

First, Joe Biden. He has already struck a firm stance against Russia — raising the thorny issues of Navalny, Ukraine and allegations Russia paid bounties to Taliban-linked militia to kill American soldiers in his first call with President Vladimir Putin, according to the official U.S. readout.

But his goal of ensuring the U.S. and EU move in lockstep when it comes to mutual interests is a position that could stand in the way of a strong American response, said Christopher Granville, a managing director at the T.S. Lombard political consultancy and former British diplomat in Moscow.

“While Biden detests Russia and is keen on sanctions in principle, he’s going back to a policy of coordinating with allies. That means laborious discussions with the EU to get all the ducks in a row,” Granville said.

Since all 27 EU members must agree on any new sanctions against Russia, “the result will be the lowest common denominator,” he added

In a bid to force Biden’s hand, a group of bipartisan Russia hawks in the U.S. Senate — led by Marco Rubio with the backing of Mitt Romney — reintroduced a previously-stalled bill to the U.S. Congress on Wednesday which calls for asset freezes and visa revocations of any Russian individual “involved in the poisoning of Alexei Navalny or the subsequent cover-up”. It also demands the president investigate and publish a report on “the personal wealth of Vladimir Putin and his family members.”

It is not expected to be taken up.

Navalny's demands

The second new element is Navalny’s own explicit call for how he wants the West to respond to his poisoning and imprisonment, said Nigel Gould-Davies, senior fellow for Russia and Eurasia at the London-based International Institute for Strategic Studies.

Navalny has been vocal in calling for personal sanctions in the top echelons of Russia’s business and political elite, not just mid-ranking siloviki. His target list includes oligarchs well-known in the West, including Roman Abramovich and Alisher Usmanov, who Navalny says should have their assets frozen, companies blacklisted and residency rights revoked.

“This makes it harder for the West to dodge the question.” said Gould-Davies. “How can governments maintain their position of standing unambiguously in favor of Navalny’s freedom, while ignoring the clear and specific calls that he himself is making for sanctions?”

More than that — the plan could actually help the West boost the effectiveness of sanctions in putting pressure on Putin, he added.

“Navalny understands what discomforts the Kremlin. He’s demonstrated that capacity on many occasions over a long period of time. So we should take his view about what will be effective seriously … There’s every reason to think that he understands what will hurt the system.”