Abstract

We conducted field experiments before and after the invasion of Ukraine to test the effectiveness of sanctions designed to exclude specified Russian government officials from the international financial system. Researchers impersonated sanctioned individuals and made email solicitations to intermediary firms to establish shell companies and set up corporate bank accounts. Results of responses to the sanctioned names are compared to equivalent solicitations from non-sanctioned individuals in an innocuous placebo condition. If sanctions are effective, private-sector intermediaries should be much less willing to do business with the sanctioned names, relative to the low-risk placebo names, and should also conduct stricter due diligence. The first round of the experiment was implemented before the Russian invasion of Ukraine. The second round was in May of 2022, a few months after the invasion. The pre-invasion approaches from sanctioned names could get access to the financial system almost as easily as the low-risk unsanctioned individuals, suggesting sanctions were ineffective. In contrast, in the post-invasion round, solicitations from sanctioned names were far less likely to receive a response than those from low-risk unsanctioned individuals, suggesting that the sanctions had become much more effective, even though the relevant sanctions law had not changed.

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