Public Opinion on Sanctions Compliance and Evasion: The 2022–23 Russia Sanctions

• In Event: Empirical Perspectives on the War in Ukraine

Abstract

In the wake of the February 2022 Russian invasion of Ukraine, the EU imposed wide-ranging economic sanctions on Russia. These include economic restrictions on large sectors of the Russian economy as well as prohibitions on the import and export of specific goods and services. To make these sanctions work, sender governments critically depend on private actors severing their business ties with partners in the target state. In 2022, many Western firms announced they were ceasing operations in Russia. Some withdrew due to their activities and transactions now being illegal, while others withdrew even though their business with Russia remained legal. At the same time, many other high- and low-profile German companies continue to operate in Russia. Some of these companies’ activities are generally legal, while others do seem to be engaging in sanctioned activities. Moreover, those companies whose activities are not subject to sanctions and chose to continue business in Russia offer a variety of reasons for doing so, some of which seem more contested than others.

We examine German public opinion on sanctions compliance and evasion with a pre-registered, representative, and large (n = 3.000) survey experiment fielded in early December 2023. As the largest EU economy and due to its previously close economic ties to Russia, Germany is an important player in EU sanctions policy. Furthermore, we study the measures against Russia as a highly salient and economically impactful sanctions regime.

Public opinion is a driver of foreign policy in general and sanctions policy in particular. Public opinion shapes corporate decisions both directly and by affecting the preferences of political elites. We bridge literature on sanctions and public opinion as well as emerging work on economic coercion and firm-level behavior to theorize public perceptions of companies leaving and remaining in Russia, and the justifications for the respective corporate behavior. We propose two mechanisms influencing how people think about firm activities – (1) informational cues conveyed by sanctions and (2) stigma related to corporate human rights obligations. Moreover, we draw on research on public justifications and sanctions’ humanitarian repercussions to hypothesize that companies providing “common good” reasons for remaining on the Russian market will be evaluated more positively and those that foreground profit maximation or provide no justification.

In our analysis, we focus on whether Germans indeed care about firms’ activities in sanctioned countries, and whether they find certain arguments for maintaining legal business in Russia more convincing than others. We address two related research questions. First, does the German public disapprove of German corporations continuing their operations in Russia, and approve of them withdrawing? Second, which corporate reasons for continuing legal business in sanctioned countries does the public support more and less strongly?

First, we find clear approval for firm withdrawals and disapproval for firms remaining on the Russian market. Notably, firm overcompliance garners significant support, while companies that choose to pursue illegal corporate activities garner the highest disapproval. Furthermore, while many Germans have strong opinions on company behavior, a notable share has no strong opinion. This suggests that foreign policy issues beyond the most extreme events, while of interest to many ordinary citizens, are likely of little sustained interest to many others.

Second, we examine a particularly relevant subset of firms: Those who remained on the Russian market to pursue legal business. Here, we polled support for the three most common corporate reasons for remaining on the Russian market, namely the provision of essential goods and services, the well-being of Russian employees, and an obligation to generate profit. We find that the public evaluates the first two reasons more positively, but that none of these justifications result in a positive evaluation, on average.

This study provides detailed experimental evidence on public responsiveness to firm behavior with respect to sanctions compliance and evasion. We show that the public does indeed care both about whether domestic firms engage with sanctioned countries and which reasons they give for doing so. This has important implications for sanctions enforcement and implementation – two critical but understudied components of sanctions policy.

Authors

• Julia Grauvogel, GIGA German Institute of Global and Area Studies

• Hana Attia, University of Salzburg

• Anton Peez, Goethe University Frankfurt