Vladimir Putin's war in Ukraine comes at the cost of an 11% contraction to his nation's economy, as sanctions bite
New Zealand exports to Russia have dropped by almost 90 percent as sanctions and voluntary action against the country take hold, nearly six months into Vladimir Putin’s invasion of Ukraine.
Foreign affairs officials also say government sanctions have already stopped blacklisted people and organisations from carrying out business in Aotearoa.
In March, Parliament unanimously backed new legislation allowing New Zealand to unilaterally take action against those connected to Russia’s invasion of Ukraine, stopping them from moving assets into the country or using those already here.
Ships, yachts and planes connected to those on sanctions lists are also blocked from moving through New Zealand territory.
“As a small country, New Zealand believes strongly in the international rules-based order and the multilateral system, but this time the United Nations Security Council failed us,” Foreign Affairs Minister Nanaia Mahuta said. She was arguing to set up an autonomous system, given Russia’s veto as one of the security council’s five permanent members.
However, the Government faced criticism for the slow pace of action early on, with National foreign affairs spokesman Gerry Brownlee saying in April the biggest Russian banks and financial service providers were “noticeably absent” from sanctions lists and very few sanctioned individuals had been subjected to asset freezes.
Almost five months after Newsroom asked to speak to the head of the Russia sanctions taskforce in New Zealand, the Ministry of Foreign Affairs and Trade has provided an update on its work in a written statement from a spokesperson.
The spokesperson said the sanctions law “allows Aotearoa New Zealand to join the international community in applying tougher sanctions that will severely limit Russia’s ability to finance and equip its war on Ukraine”.
“It will also influence people with power in Russia to break their support for the war.”
A team of around 20 staff were currently working on the taskforce, with more than 800 individuals and entities sanctioned to date following 10 ‘tranches’ of action.
“Our work is not finished and we are continuing to assess where New Zealand can further support the international effort to sanction Russia for its invasion and actions in Ukraine,” the spokesperson said.
In comparison to New Zealand’s numbers, the United States and United Kingdom had respectively sanctioned about 1300 and 1800 Russian individuals and entities.
The spokesperson said there had been a significant decrease in New Zealand exports to Russia, with exports between April and June down 86 percent compared to the same period last year – dropping from $74.7 million to $9.5 million.
Officials were also aware of people and organisations on the sanctions list who had been “prevented … from carrying out activities in New Zealand”, although the spokesperson did not offer more detail.
“The sanctions also strengthen the international chain of condemnation to ensure that New Zealand does not become a safe haven for Russian assets and funds.”
"Households will be deeply impacted by the crisis, with a projected additional 2.6 million people falling below the national poverty line." – World Bank
The taskforce had worked closely with international partners in developing the sanctions regime, although there were some differences in approaches due to the various legal, governmental and policy frameworks in place.
The spokesperson said the Government had not faced any legal challenges to date from those on its sanctions list, which was just one part of New Zealand’s response to the Ukraine invasion.
Aotearoa had also provided military support, $8 million in humanitarian assistance, and special visa support for citizens and residents with Ukrainian connections to bring family members here temporarily.
Sanctions taken by New Zealand and other nations do appear to be hitting the Russian economy, with the World Bank projecting a contraction of 11.2 percent in 2022 "with little recovery in the ensuring two years".
"Households will be deeply impacted by the crisis, with a projected additional 2.6 million people falling below the national poverty line."
This week, Reuters reported Russian airlines were starting to strip jetliners to secure spare parts they could no longer purchase overseas due to sanctions.
