A new investigation by Swedish newspaper Göteborgs-Posten and the International Consortium of Investigative Journalists (ICIJ) has raised questions about the role of corporate sanctions compliance in reducing Russia’s economic capacity to wage war.
The investigation found that global commodities trader Gunvor continued doing business with sanctioned Russian oil and gas producers after Russia’s full-scale invasion of Ukraine, despite publicly stating that it was winding down much of its Russian business. The transactions involved entities connected to Gazprom, Rosneft, Lukoil and Novatek.
According to the investigation, Gunvor maintained that the transactions complied with applicable sanctions and were conducted under licences or other forms of authorisation. ICIJ notes that the transactions identified in the records likely did not violate sanctions laws. In the first quarter of 2024, dealings with sanctioned Russian counterparties represented 0.69 percent of Gunvor’s revenue, estimated by Göteborgs-Posten at approximately $234 million.
Commenting on the findings for Göteborgs-Posten, Maria Perrotta Berlin, Assistant Professor at the Stockholm Institute of Transition Economics (SITE), highlights the distinction between complying with the legal requirements of sanctions and acting in accordance with their broader economic and political objectives.
“There is a difference between following the absolute minimum required by law and trying to act in line with the overall purpose of sanctions, which is to reduce Russia’s revenues and economic capacity to wage war.”
Perrotta Berlin also stresses the importance of transparency. When companies continue substantial trade through exemptions, licences or other legally permitted channels, assessing the overall effectiveness of sanctions becomes more difficult for policymakers and the public.
The case illustrates a broader challenge for sanctions policy. Legal compliance determines whether individual transactions are permitted, while the effectiveness of sanctions ultimately depends on whether economic relations with sanctioned countries are reduced sufficiently to constrain their revenues and economic capacity.
The investigation therefore raises wider questions about corporate due diligence, transparency and the responsibilities of international companies operating in sectors where legally permitted trade with Russia remains possible. Read the full article at Göteborgs-Posten (in Swedish).
Explore Sanctions Compliance with TRACER
How effectively do countries implement and enforce sanctions against Russia? Explore the Trade Redirection and Circumvention Evaluation Ranking (TRACER), which assesses sanctions enforcement capacity and circumvention risks across 38 countries using 85 indicators covering legal frameworks, government enforcement, corporate compliance, and structural constraints. Explore the TRACER Compliance Index.
Further Reading: Sanctions on Rosneft and Lukoil
For more on how energy sanctions can affect Russia’s ability to finance its war, read the FREE Network analysis of U.S. sanctions on Rosneft and Lukoil. KSE Institute economist Benjamin Hilgenstock explains why restrictions targeting Russia’s largest oil producers could increase pressure on the country’s energy revenues and federal budget. Read the FREE Network policy brief on sanctions against Rosneft and Lukoil.
