Embargo Research Articles

The impact of U.S. economic sanctions on corporate innovation and fraud

AbstractEconomic sanctions have increasingly become a pivotal tool in modern foreign policy, especially in the context of U.S. international strategy. Despite their growing significance, there is a notable lack of empirical research on how these sanctions affect corporate behavior. This study aims to explore the impact of U.S. economic sanctions on innovation and fraudulent activities within Iranian firms subjected to these measures. Utilizing a difference‐in‐differences approach, the findings reveal a weak and negative relationship between sanctions and innovation, while no significant link is found between sanctions and fraudulent activities. Notably, the study uncovers a substantial divergence in companies' responses to sanctions based on their innovation background. Companies with a strong innovation background experience a significant increase in innovation efforts and a corresponding decline in fraudulent behavior upon facing sanctions. In contrast, companies lacking an established innovation background exhibit a reduction in innovation and, in turn, an escalation in fraudulent practices in response to sanctions. These findings remain robust across various sensitivity analyses. This research contributes to the expanding body of empirical literature on sanction outcomes by highlighting the profound impact of innovation background on the responsible and ethical decisions made by sanctioned companies.

The Impact of the Russia-Ukraine Conflict on Global Economic Stability and Political Security

The conflict between Russia and Ukraine has emerged as a significant geopolitical tension, with far-reaching implications for global stability and security. This paper intends to study the impact of the war on the worlds and regional economic development and political stability, and achieve some findings that may trigger further policy considerations in mitigating challenges and issues imposed by the war. Through literature reviews and comparison analysis, the findings reveal economic, political, and security consequences of the conflict. The disruption of trade flows, economic sanctions, and uncertainty have impacted both Russia and Ukraine, as well as the wider region and the world. Energy security concerns and shifts in military alliances have added to the complexity of the conflict. The expansion of NATO and increased rivalries between Russia and Western countries have further heightened tensions. Based on the findings, the paper concludes that the Russia-Ukraine conflict poses a significant threat to global economic stability and political security. It emphasizes the need for a multilateral approach to address the conflict and promote peace and stability in the region. Ceasefire agreements, humanitarian assistance, and reconstruction efforts are crucial steps towards long-term peace and development. The paper highlights the importance of prioritizing diplomatic solutions over short-term gains from the conflict. In summary, this paper intends to explore the implications of the Russia-Ukraine conflict on global stability and security, with findings that underscore the need for international cooperation and concerted efforts to mitigate the consequences of the conflict and foster a peaceful resolution.

Harnessing network power: Weaponised interdependence in global tax policy

AbstractFor decades, global tax policy has grappled with the challenge of mobile capital, failing to harness the regulatory potential of network power. This oversight has allowed tax havens to flourish, and multinational corporations and wealthy elites to circumvent state authority, undermining national fiscal policies and democratic capacity to meet grand societal challenges, such as climate change and inequality. But recent regulatory innovations pave a different way forward. This article spotlights the dynamics of ‘weaponized interdependence’, suggesting a critical role for strategically targeting global corporate and financial networks in reinvigorating action against tax havens, tax avoidance and tax evasion. Identifying and exploiting network chokepoints – financial institutions, corporate subsidiaries and expert intermediaries – can empower states to reassert their sovereignty and counterbalance the structural advantages of global capital. This approach helps us understand how and why recent regulatory measures have effectively countered financial secrecy, profit shifting and sanctions evasion, repairing public finances and restoring democratic integrity. In an age where weaponised interdependence is predominantly linked to national security, this recasting of global tax policy highlights a progressive path for using network power to develop effective global economic frameworks, strengthen democratic capacity and address contemporary challenges.

The state and prospects of development of insurance for small and medium-sized businesses in Russia

In modern conditions caused by the instability of the national economy, the role of small and medium-sized businesses (SMEs) in the country's economy is increasing many times. Insurance is a reliable tool for protecting entrepreneurs from risks and ensuring the sustainability of their business. The purpose of this article is to study the current problems and prospects for the development of SME insurance in the context of external economic sanctions and market volatility. The object of the study is the SME insurance system in Russia. Scientific work contributes to the theory of insurance, in particular, to substantiate the need for insurance in the development of entrepreneurship and its role for the country's economy. The results of the study can be used to develop measures of state support for SME insurance, as well as to improve insurance products aimed at entrepreneurs.

Sustainability of the real sector of the Russian economy: Economic security and sanctions realities

Aim. To investigate the essence of the real sector of the Russian economy and identify the features of its impact on achieving economic security under sanctions.Objectives. To determine the essence of the real sector of the economy and assess its contribution to the stability of the national economy under sanctions; to identify the stages of development of the real sector of the Russian economy; to form an approach to regulating the real sector in the context of achieving economic security.Methodology. The research uses methods of comparative, structural, functional, and historical (retrospective) analysis, as well as tools of systemic and institutional approaches.Results. The real sector of the economy includes the production of goods and services, its functioning is associated with the creation of new value. This distinguishes it from the virtual and financial sectors where real, tangible goods are not created and where, in fact, the product formed in the real sector is redistributed. In crisis conditions, the developed real sector serves as the basis for the functioning of the economy and the satisfaction of basic economic needs, its stability determines national economic security.Conclusions. In modern conditions, characterized by sanctions pressure on Russia from unfriendly countries, the real sector of the economy plays an important role in ensuring the stability of the country’s economy as a whole. Its dynamics largely determines protection against traditional and new (sanctions-related) threats and risks to economic security. At the same time, there is a need for government support and regulation of the development of the real sector, which is associated with many different difficulties. To increase the effectiveness of this regulation, a permanent search for a balance between the use of planned and market instruments is required, the development of a mixed system of economic regulation that combines the tools of market and planned approaches. This will make it possible for the state to flexibly and adaptively manage the process of ensuring national economic security.

Our Exploration of Countermeasures against the Abuse of Unilateral Sanctions by the United States

Currently, the international landscape is undergoing changes, with unilateralism on the rise. Of which, economic sanctions are the most common form. Due to the lack of effective specialized international rules in the current international rule system, unilateral sanctions are increasingly frequently used by individual countries. The abuse of unilateral sanctions has impacted the normal operation of international mechanisms. Unilateral sanctions were originally used in a country’s domestic law, but now some countries, such as the United States, expand their own laws’ extraterritorial application through the continuous expansion of connection points, thereby giving their sanctions against foreign entities a cloak of legitimacy, which goes against the principles of international law and the basic norms of international relations (Bai, 2018). From a legal perspective, the implementation of illegal unilateral sanctions is achieved through the improper interpretation and application of international treaty exception clauses. From international custom, unilateral sanctions beyond countermeasures refer to those imposed by states other than the injured state, who deliberately legalize countermeasures related to sanctions, which greatly contributes to the abuse of unilateral sanctions. In this context, China should accelerate the construction of its anti-sanctions legal system to effectively counter the threats and damages caused by unilateral sanctions and firmly safeguard its sovereignty, security, and development interests.

Financial Mobilisation for Economic Survival: The Rhodesian Insurance Industry During UDI, 1965–1979

ABSTRACT This paper examines the insurance industry during Rhodesia’s Unilateral Declaration of Independence (UDI, 1965–1979). It demonstrates how the sector was a vehicle for economic survival against sanctions imposed by the United Nations and Britain. It argues that the growth of the insurance industry was key to the financial mobilisation needed in other undercapitalised sectors. The paper builds on earlier scholarship to demonstrate how Rhodesia mobilised its domestic resources. It explains how the Insurance Fund was mobilised to facilitate the development of the Export Credit Insurance Scheme to facilitate international trade. It contend that the insurance industry constituted one of the most important arms of Rhodesia’s financial sector during the UDI period. The paper suggests that without the remodelling of the financial and insurance sector it would have been impossible for Rhodesia to survive economic sanctions. UDI precipitated a transition away from orthodox financial systems to insurance, because sanctions propelled the growth of the industry. This article joins an existing broader historiographical debate that argues sanctions are inefficient in changing states’ behaviour. It draws on primary sources from the National Archives of Zimbabwe and provides a qualitative study on how Rhodesia survived economic sanctions using the insurance industry.

The Infrastructural Power of the Cayman Islands and the US State Power: A Financial Networks Centrality Approach

ABSTRACT This paper explores the symbiotic relationship between the Cayman Islands and the centrality of the United States (US) in global financial networks, using their connection as a test case for a broader theory of how infrastructural power of states is achieved through transnational and networked strategies. The legal and financial infrastructure of the Cayman Islands is extensively used by US financial institutions. This infrastructure supports the development of a significantly US-centric fund industry, facilitating substantial investments into US capital markets. Additionally, it serves as a global conduit, channelling funds from regions such as Asia and Latin America into US markets, streamlining the process by which foreign investors acquire US securities, and supporting the development of complex USD-denominated financial products. This dynamic enhances the depth, liquidity, and complexity of US capital markets, thereby reinforcing US centrality in global financial networks and bolstering its geopolitical power through financial diplomacy, economic sanctions, regulatory influence, and control over critical financial infrastructure. The relationship underscores the infrastructural power of the Cayman Islands, whose financial and legal framework is essential for sustaining and amplifying US centrality. Consequently, this paper aims to integrate the transnational perspective on infrastructural power within the International Political Economy (IPE) and Geopolitics literature, demonstrating how the Cayman Islands function as a multifaceted networked site that strengthens, projects, and sustains US state power on a global scale.

The Lessons from Sanctions on Iran and Their Impacts on the Development of Civil Aviation Understanding and Iranian Airlines

After the Islamic Revolution, Iran lived through many hard times not only because of its economic and financial resources such as oil and petroleum but also because of its historical, social, supremacy and leadership of some other Islamic countries and communities. Essentially, it has tried to defend its position for many years without sacrificing its Idiosyncratic Islamic governance structure within the world context or other Islamic countries, for these reasons, it has witnessed a lot of economic and financial sanctions or bans. Although Iran has a lot of highly qualified academicians and a workforce in the science of aviation, its civil aviation management structure and related activities, such as airline management, are very far from the average of the world depending on these financial and economic sanctions and bans by international orders. This situation is subjected to this research as a gap. This paper will analyse the civil aviation and air carrier industry of Iran under the impacts of these economic and financial bans and sanctions regarding four dimensions: Maintenance, Training and licensing, corporal development, and relationships with manufacturers. Essentially, at the beginning of the new age, in terms of international politics and conflicts in every continent of the world, new sanctions and bans are on the trouble agenda of world civil aviation agencies and institutions because of their highly political structure, and these bans and sanctions carry generally economic and financial identities, although they have international policy claims. There are a lot of possibilities on the desks of the civil aviation authorities for the burdens of these sanctions and bans and their sustainability impacts on civil aviation. Moving from the situation of Iran, the correct courses and necessary economic and financial policies will be suggested in this new world context and understanding.

New approaches to the implementation of supervisory powers in capital markets and organized commodity markets

The article analyzes new mechanisms and measures of influence on supervisory entities in capital markets and organized commodity markets. A general positive assessment is given to the innovations related to the introduction of more flexible tools for adjusting the state of stock and organized commodity markets, as well as the expansion of the powers of the National Securities and Stock Market Commission (NSSMC), while simultaneously strengthening the legal guarantees of the rights of supervised entities. Attention is paid to changes regarding the inclusion of individuals as subjects of responsibility under this law, clearer delineation of the scope of supervised entities, and significant expansion of the rights of supervised entities by utilizing the best practices of regulating procedural relations between the supervisory body and the supervised entity. The article also explores the deepening regulation of communicative connections between these entities and the procedures for implementing supervisory measures. Attention is given to preventive measures for violations, such as «recommendations by inspectors» and «requests for the adoption of measures.» The article analyzes new forms of implementing supervisory powers and measures of influence on supervised entities, as well as new mechanisms for their implementation that were not previously known in domestic practice. The legal significance of «public warnings» is highlighted, and a legal evaluation of «settlement agreements regarding the consequences of violating sectoral legislation» is provided as an alternative to administrative enforcement measures. According to the authors, concluding such an agreement cannot be considered as a discretionary power of the NSSMC but rather a right of the supervised entity. Conclusions are made regarding the compliance of the introduction of «controlled services» with the IOSCO principle. Taking into account the guarantees of the rights of supervised entities, as stipulated in Article 35 of the Law of Ukraine «On Amendments to the Law of Ukraine ‘On State Regulation of Capital Markets and Organized Commodity Markets’ and Some Other Legislative Acts of Ukraine on Improving State Regulation and Supervision in Capital Markets and Organized Commodity Markets» of February 22, 2024, No. 3585-IX (hereinafter referred to as Law No. 3585-IX). The article defines the functional purpose of legislative restrictions on financial sanctions against supervised entities - legal entities, which, in the authors’ view, aim to prevent their economic destruction and the disruption of economic ties in the respective market. In conclusion, the changes introduced as a result of the adoption of Law No. 3585-IX are expected to positively impact the relationship between the regulator and market participants. The innovations in the practice of legal regulation of relations between the regulator and supervised entities deserve to be extended to other similar areas of state control and supervision.

The State and Trends of Crime in the Territory of the Member States of the Commonwealth of Independent States in 2023

Introduction. The article provides an analysis of the state of crime in the member states of the Commonwealth of Independent States in 2023. The analysis is based on statistical data on the state of crime in the Commonwealth over the past five years.After Russia launched a special military operation in 2022 to denazify and demilitarize Ukraine, a situation is developing in the world in which the countries of the collective West are trying to damage our country through economic sanctions, as well as actually waging a proxy war against Russia. Unfriendly countries, led by the United States, are trying to use the member states of the Commonwealth as a tool in the fight against Russia, through unequal cooperation to introduce differences in the CIS, and use information security technologies for their own purposes.To determine the degree of influence of current world events on the criminal situation in the post-Soviet space, an analysis of the state of crime in the CIS countries was carried out.The given statistical data on crime in the Commonwealth countries demonstrate the dynamics of the criminal situation in the countries under consideration, depending primarily on internal criminogenic factors. Such factors exist and develop under the influence of criminal elements and the existing criminal environment.The analysis of the dynamics of the criminal situation for 2019-2023 was aimed at determining the trends of its development in the light of the impact of external and internal processes that have arisen in recent years, to identify the causes affecting the dynamics of certain types of crime and to make a forecast of the possible development of the criminal situation for the next 1-2 years.To predict the dynamics of the criminal situation in the CIS countries, the expotential smoothing method was used, which is illustrated by the graphs given in the article.Materials and methods. The theoretical basis of the research is based on the conclusions and achievements of criminology, scientific research on crime as a social phenomenon. The reasons and events influencing the dynamics of crime are taken into account. General scientific and private scientific research methods (synthesis, deduction, analysis, generalization, observation, etc.) were used in the work. The methodological basis of the study was a systematic approach, comparative and problem-based approaches.The results of the study. As a result of the analysis of the criminal situation at the transport facilities of the Russian Federation, it was found that, starting in 2020, new factors influenced the quantitative indicators of crime in transport. The introduction of restrictive measures related to the spread of coronavirus infection, their subsequent cancellation, the beginning of the geopolitical crisis in the world, provoked by the imposition of sanctions by Western countries against Russia, restrictions on international communications. closure of airports, borders, etc. they affected the directions of preventive activities of the internal affairs bodies in transport. The conclusions and forecasts made in the article determine the trends in the development of the criminal situation in transport in 2023 and allow us to determine the most important vectors of the direction of preventive activities of internal affairs bodies.Discussion and conclusion. The article identifies and substantiates the priority areas of activity of the internal affairs bodies of Russia in transport for the most effective organization of preventive activities and combating crime.

Potential for Cooperation between Russia and MERCOSUR under Sanctions

Under the pressure of the unprecedented economic sanctions, the Russian Federation faces the tasks of reformatting its foreign economic strategy, transforming its trade policy, changing supply chains, and expanding cooperation with the partners that maintain economic neutrality, particularly with the countries in Latin America, the Asia-Pacific region, and the Middle East. The purpose of this research is to determine to what extent economic sanctions can serve as a factor for activating trade and economic relations between Russia and the countries of MERCOSUR as the most significant potential partners from the Latin American region. The research question of the article is to what extent it is possible to sooth the impact of sanctions on the Russian economy by stimulating trade links with MERCOSUR countries. The article attempts to compare the relative significance of Brazil, Argentina, Uruguay, and Paraguay as trade and economic partners for Russia at the time of sanctions. The article identifies factors contributing to the growth of potential of mutual trade and economic cooperation and those constraining it; provides an assessment of the current development of trade and investment relations between the parties; calculates indicators to determine the possibility of substituting the lost markets for export-import operations by the new ones.

International trade sanctions imposed due to the Russia-Ukraine war may cause unequal distribution of environmental and health impacts

The geopolitical conflict between Russia and Ukraine has escalated into international trade sanctions targeting Russia’s energy-related products. Here we combine a global general equilibrium model and an atmospheric source-receptor model to explore the environmental, economic, and public-health effects of varying intensities of trade sanction measures. Our results indicate that the trade-offs between economic development and environmental pressure might not be directly proportional, where one-fifth of global regions (e.g., Russia, China, and Central America) would experience a co-harm situation (e.g., decreased GDP and increased emissions and health risks). Intensifying trade sanction measures would reallocate the burdens of energy production and export to less-developed regions (e.g., Europe and Central Asia), thereby exacerbating the uneven distribution of environmental and health outcomes among regions. The global repercussions of the trade sanctions highlight the necessity of considering the consequences on regions beyond the conflict to formulate desired global initiatives for impact mitigation/adaptation and post-conflict restoration.

Development of the Russian petrochemical industry in the context of tightening economic sanctions

Development of the Russian petrochemical industry in the context of tightening economic sanctions

Gaza War: New Opportunities and Challenges for Iran

The Iranian decision not to immediately retaliate against Israel for the assassination of Hamas political leader Ismail Haniyeh in Tehran on July 31, 2024, in part reflects a concerted effort by regional, Chinese, Russian, and Western diplomats to convince Iran that de-escalation and diplomacy was the wiser course. It also reflects recognition by the new administration of President Masoud Pezeshkian –whose inauguration preceded the Haniyeh killing by only a few hours– that such a military retaliation would likely provoke a massive Israeli response backed by the U.S. and other Western allies that would doom Iran’s chances of re-engaging with the West and relieving onerous economic sanctions. A wider conflict between Israel and Hezbollah across the Israel-Lebanon border does not appear to have changed this calculus for Iran, which is confronting severe domestic economic problems and a growing gap between the regime and society. Still, any progress in improving U.S.-Iran relations will have to await the results of U.S. presidential elections.

Economic sanctions and trade dynamics: Analyzing U.S. unilateral and EU autonomous economic sanctions (1950–2019)

This study investigates the role of economic sanctions within contemporary national security strategies, focusing on their impact, motivations, and implications for sender states. Utilizing a mixed-methods approach, the research combines qualitative and quantitative methodologies to comprehensively analyze unilateral and autonomous economic sanctions imposed by the U.S. and the EC/EU between 1950 and 2019. The comparative and descriptive analysis examines 97 sanctions episodes, including 60 unilateral U.S. sanctions and an original dataset of 37 EC/EU autonomous economic sanctions episodes. The findings reveal that economic sanctions imposed by both entities generally yield positive economic outcomes for sender states. Endogenous motivations such as economic security concerns, geopolitical interests, and domestic political considerations emerge as significant drivers behind the deployment of sanctions. Economic sanctions are perceived as a strategic tool serving political objectives while enhancing economic security of sender states. Tangible benefits, including strengthened negotiating positions and domestic support, underscore the instrumental role of sanctions in advancing sender states’ interests globally. In summary, this research contributes valuable­ insights into the complex dynamics of economic sanctions and their implications for sender states. The study offers pertinent guidance for policymakers­, scholars, and practitioners navigating global security and economic governance challenges by examining economic sanctions’ motivations, impacts, and implications within contempo­rary national security strategies.

Актуальные проблемы применения антидемпинговых мер в системе государственных (муниципальных) закупок

At present, in the context of a difficult geopolitical situation, the application of an unprecedented number of economic sanctions against Russia, the task of targeted and at the same time effective spending of budgetary funds is urgent. In this regard, the forms of administrative management and control of the system of state and municipal procurement considered in the article, in particular, anti-dumping regulation carried out in order to protect public interest, are of particular practical interest. The article presents an analysis and assessment of the applied anti-dumping measures in the Russian contract system, which made it possible to identify the problems of applying anti-dumping measures in the system of state (municipal) procurement.

Stock market responses to economic sanctions: Evaluating the roles of national reserves and financial market access

Economic sanctions significantly influence stock market capitalization and have critical implications for the national economy. This study investigates the impact of economic sanctions on stock market capitalization, focusing on the roles of national reserves and financial market access in mitigating these effects, utilizing a sample of 87 countries from 2000 to 2021 and employing a two-step system generalized method of moments (GMM) approach to analyze panel data. The findings reveal that economic sanctions, including trade and financial sanctions, significantly reduce stock market capitalization. However, this negative impact diminishes over time as markets adapt. Moreover, higher national reserves and enhanced financial market accessibility can mitigate the adverse effects of sanctions. Case studies in Russia, Iran, China, and Ukraine further validate these results. This study refines economic models, such as the capital asset pricing model (CAPM) and country risk model (CRM), by including sanction intensity, national reserves, and financial market accessibility, offering valuable insights for policymakers and investors dealing with international sanctions.

Russian counter-sanctions and smuggling: Forensics with structural gravity estimation

Trade and other economic sanctions are a common foreign policy instrument, but their imposition may induce smuggling. We develop and implement procedures to study smuggling after the food embargo imposed by Russia on Western countries after the annexation of Crimea in 2014. We construct predicted trade flows for the post-sanctions period using an estimated structural general equilibrium gravity model with many industry sectors and compare those predictions with actual trade flows. We identify a substantial value of suspicious trade flows which we associate with smuggling; especially importing banned goods through third countries such as Belarus. The structural gravity model systematically under-predicts trade volumes for country-product combinations used as channels for smuggling of the banned goods. We identify a quantity of smuggling equivalent to approximately 11 to 17 percent of the pre-embargo trade flows.

WHO EMRO's initiative on economic sanctions: delayed but promising

WHO EMRO's initiative on economic sanctions: delayed but promising