To be sure, while the United States holds a major lever here, the loyal support Ukraine has received from the European Union has helped strengthen Ukrainian morale and muscle on the battlefield. Yet still, much more could be done by the bloc.
Last week in Ankara, NATO leaders gathered for the ritual family photo and once again pledged unwavering support for Ukraine. It was a convergence of principled respect for the survival of a sovereign, peaceful neighboring nation and of mutual self-interest in the face of Putin’s imperial agenda.
Beyond superior military power and a unified diplomatic voice, the West holds overwhelming economic power. The Ankara gathering promoted a comforting fiction of joint action, an exercise in self-congratulation that obscured an uncomfortable truth: the private sector has fought this war with greater consistency and greater courage than many of the governments now praising one another.
That transparency campaign helped catalyze the historic withdrawal of more than 1,200 companies from Russia, the largest voluntary corporate exodus ever recorded. Those firms represented roughly 40% of Russia’s prewar GDP. Their departure erased three decades of foreign investment in months and went far beyond anything sanctions law required. That distinction matters more than many commentators appreciate. Sanctions and corporate withdrawal are complementary but fundamentally different instruments.
These two approaches—government actions and private actions—are designed to function as a one-two punch, much as they did against apartheid South Africa. Sanctions prevent principled firms from being undercut by opportunistic competitors. Corporate withdrawal deprives the Kremlin of what legislation alone cannot reach: technology, capital and legitimacy. For four years, the corporate punch has landed. It is the government punch that has repeatedly been pulled, with western governments repeatedly relaxing sanctions on Russia precisely when they should be tightening them.
Oil and gas revenues had declined to their smallest share of Russia’s budget in two decades. The International Monetary Fund projected growth of just 0.8 percent. Then came the waivers. Russian crude exports climbed from 4.9 million barrels per day in February to six million by May, and the failure to enforce Russian energy sanctions has since allowed Putin to continue reaping windfall profits from elevated oil prices.
How Europe failed Ukraine
France became Europe’s largest importer of Russian LNG by 2024, helping Russia build export facilities it did not previously have, even as President Emmanuel Macron urged greater strategic resolve in standing up to Russia. Le Monde reported that condensate from a Total Energies joint venture had been refined into jet fuel powering Russian aircraft attacking Ukrainian cities. The company denied wrongdoing, sold one affected stake and retained the rest.
Austria’s government has failed to rein in Raiffeisen Bank, which has remained the largest Western bank operating in Russia—at times generating roughly half of the banking group’s profits while paying hundreds of millions of euros annually into the Russian treasury. The French billionaire Mulliez family’s Auchan supermarkets never left Russia, insisting that their mission was simply to feed civilians.
Yet Europe has extended Kyrgyzstan highly favorable trade conditions through the Generalized Scheme of Preferences Plus (GSP+), which allows the country to export more than 6,200 categories of goods to the EU market duty-free. Meanwhile, uncontrolled Greek shipowners have profited by selling dozens of aging tankers into Russia’s shadow fleet, helping sustain sanctions evasion while contributing to mounting environmental risks.
The most significant backsliding has come disproportionately from German, French, Indian, Chinese, and Uzbek firms, all publicly identified and graded in our database. Even Putin has warned that Western companies that “slammed the door” should not expect an easy return. American companies, by and large, kept their word. Too many governments did not.
How to stop the Kremlin from avoiding sanctions
Making it worse, Russia has found increasingly clever ways to evade existing sanctions, and the existing sanctions regime is plainly failing to keep pace. As Alexander Browder has found in his groundbreaking research, the so-called A7 network—a privately owned Russian payments platform that is aligned with the Russian government and faces sanctions—moves an estimated $90 billion annually, more than half of Russia’s entire military budget.
The prescription is straightforward: deploy a far more complete and comprehensive set of economic sanctions against Russia; dismantle its shadow financing network—A7A5 chief among them—by cutting off the enablers operating within Kyrgyzstan and other intermediary countries; sanction the shadow fleet vessel by vessel to stop the illicit flow of Russian oil; impose meaningful secondary tariffs; and stop accommodating European companies—Total Energies, Airbus, and Raiffeisen among them—whose conduct has actively helped Russia rebuild its economic capabilities.
The lesson was clear then and remains clear now: the coordination of the left hand of government with the right hand of business matters profoundly. Researchers studying spinal mechanics have demonstrated that lifting a 50-pound object with two hands is biomechanically and neurologically less taxing than lifting two individual 25-pound weights—each hand working alone strains what both hands together could manage with ease. More than 1,200 companies did their part. They held the line through the grueling years of war, resisting the pull of profits and the pressure of Kremlin retaliation. Now governments must step up and show the same determination and courage in applying more comprehensive sanctions on Russia.
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