Sanctions against Russia worked… sort of

In the wake of Russia’s invasion of Ukraine, many countries imposed strict sanctions against Russia, while countries friendly to Russia continued to trade. Ever since, there has been a discussion about whether these sanctions have been effective. Turns out the answer is an emphatic ‘partially’.

Konstantin Egorov and his collaborators collected a patchwork of data from customs data to company balance sheets and earnings reports, and even railway shipments in Russia, to analyse if Russia’s imports of manufactured goods, food, etc., really declined after the sanctions were imposed in 2022. Note that we do not talk here about sanctions against Russian exports, which are a different matter, but only about sanctions against exports to Russia.

The typical response to the question, if sanctions against exports to Russia are effective is to look at the number of brand new Range Rovers on Moscow’s streets. Wealthy Russians can always get a new car, but they now have to buy them from intermediaries in Kazakhstan, Uzbekistan and other friendly countries. But they can get what they want.

And apparently, this is true on a broader scale. The chart below shows the decline of Russian imports after Western sanctions were imposed on the country. Clearly, official Russian import statistics show a large drop in imports.

Russian import volume declined after sanctions were imposed

Source Egorov et al. (2025)

However, this is obviously not the whole story. The second chart shows the increase in imports from friendly countries that did not impose sanctions against Russia, along with the decline in imports from countries that did impose sanctions.

Large-scale import substitution from friendly countries

Source Egorov et al. (2025)

What makes the analysis of Egorov and his colleagues so fascinating is that they were able to split this import substitution into three components. The imports of products manufactured in enemy countries that imposed sanctions (your Range Rover imported via Kazakhstan), the imports of products from other countries, and those imported from and produced in friendly countries (your BYD imported from China).

As you can see, substitution with products manufactured in friendly countries played hardly any role. Instead, about two-thirds of the import substitution was simply a re-routing of products from enemy countries via friendly neighbours, and another third was the substitution of sanctioned products with third-party products.

Decomposing substitution vs. re-routing

Source Egorov et al. (2025)

If you net it all out, the study finds that much of the import sanctions were circumvented, but not all. In particular, the science and technology sector was unable to get its hands on re-routed or substituted imports and suffered large reductions (c.30%) in access to inputs. Manufacturing was also hit significantly, though the decline in import volumes was more moderate at c.10%.

Sanctions against Russia then did work, but the impact was smaller than many people think.