Comment by er4hn
3 days ago
It's clear, from watching Russia fail to be completely sanctioned that this is not watertight. The question I have is: have these sanctions added a money laundering tax to doing business? How much? What is the cost of enforcing the sanctions vs the added cost and is that worth it?
I don't know if this has been explored, bit I think it's an interesting follow on to "all or nothing" watertight sanctions.
Yes, that's pretty much the main goal with sanctions (and things like export controls): no-one expects them to be impossible to work around, but they should impose some (ideally very large) extra costs and limit the scale. For some things this is more or less built into the regulations with de-minimis rules that tacitly cap the cost multiplier at 10x or so.
On a national scale sanctions aren't there to stop a country from doing things or forcing regime change. They're there to cost enough money to circumvent that it robs them of growth over time to make them into a non-threatening poor backwater over a decades long period.
This is basically what the US did to most of its "makes actual stuff" economy over the past 50yr.
When it comes to banking laws and the like it's not about being watertight. It's about holding enough water that what leaks out is small enough you can crush it with the state jackboot without enough collateral damage to really piss people off and that the cost of circumvention is high enough that you can't make "real money" outside the law at scale.