Author Robert Ayson
A few weeks ago you might not have noticed Nanaia Mahuta’s signal that travel restrictions were on the way for Myanmar military leadership. But any excuse for believing that New Zealand had zero autonomous sanctions options without enabling legislation disappeared on 24 February. That’s when the Foreign Minister joined Jacinda Ardern in announcing a series of measures in response to Russia’s invasion of Ukraine. There were three of these; travel bans on “Russian Government officials and other individuals associated with the invasion of Ukraine,” suspending some of New Zealand’s diplomatic interactions with Russia, and a prohibition on the “the export of all goods intended for use by the Russian military and security forces, including any armed force, paramilitary force, police force, or militia.”
The export controls are the most likely reason why New Zealand appeared on the list of sanctioning allies and partners in a White House Factsheet. That naming sits nicely alongside the government’s suggestions that New Zealand was “very much in line” with and “standing alongside" its partners. But the absence of autonomous sanctions legislation has reduced the range of available levers. Even if it wanted to, New Zealand can’t legally do all the things its partners can, especially when the sanctions don’t limit government to government interactions.
A few weeks ago you might not have noticed Nanaia Mahuta’s signal that travel restrictions were on the way for Myanmar military leadership. But any excuse for believing that New Zealand had zero autonomous sanctions options without enabling legislation disappeared on 24 February. That’s when the Foreign Minister joined Jacinda Ardern in announcing a series of measures in response to Russia’s invasion of Ukraine. There were three of these; travel bans on “Russian Government officials and other individuals associated with the invasion of Ukraine,” suspending some of New Zealand’s diplomatic interactions with Russia, and a prohibition on the “the export of all goods intended for use by the Russian military and security forces, including any armed force, paramilitary force, police force, or militia.”
The export controls are the most likely reason why New Zealand appeared on the list of sanctioning allies and partners in a White House Factsheet. That naming sits nicely alongside the government’s suggestions that New Zealand was “very much in line” with and “standing alongside" its partners. But the absence of autonomous sanctions legislation has reduced the range of available levers. Even if it wanted to, New Zealand can’t legally do all the things its partners can, especially when the sanctions don’t limit government to government interactions.
Those limits have had at least three implications. First, in talking up the strength of New Zealand’s response, Ardern has been drawing particular attention to the intensity of Wellington’s condemnation of Russia’s actions, which has just gone up a notch further with Mahuta’s speech to the UN Human Rights Council. It’s the quality of your condemnation that counts, it would seem, as much as the quantity of your concrete measures. When pressed in an interview about how global the pressure on Russia really had been, Ardern noted how impressed she had been with the international “unity of voice.”
Second, the government is scrambling to see what other sanctions options New Zealand might have at its disposal. These seems likely to include stronger diplomatic restrictions. The expulsion of the Russian Ambassador is unlikely to be the next step in this chain, but sits towards the end of that game plan. More travel restrictions seem almost inevitable. And as the Prime Minister has recently indicated, it means having a look at what might be done if super-rich Russian oligarchs with ties to the Kremlin are found to have money stashed away in New Zealand (although, in cases where they do, in the absence of autonomous sanctions legislation, Wellington’s practical options may be few).
Third, when you don’t have many cards in your hand, the best way to impress others at the sanctions table is to play all of them at once. New Zealand’s partners sat down at that table as soon as Putin recognised the independence claims of the breakaway portions of Eastern Ukraine and indicated that Russia would use force to support them. The first western sanctions tranche was not overwhelming: indeed there were concerns in the US and the UK that Joe Biden’s Administration and Boris Johnson’s government had not gone far enough. But some of the moves were significant. Germany played its biggest sanctions card: halting certification of the Nordsteam 2 natural gas pipeline from Russia. A number of western governments, including the US, Japan and Canada, restricted purchases of Russian sovereign debt. The EU (which became the EU Plus with the involvement of non-members Norway and Iceland) and Canada put much of Russia’s Duma on their sanctions lists. Meanwhile Australia’s initial measures, while not massive, still required the Morrison government to put into effect the recently adopted Magnitsky style legislation.
At that point, New Zealand’s quick response consisted of joining the condemnation of Russia. To the extent that New Zealand was in line with its partners, it was happening by voice rather than concrete action. When New Zealand’s three sanctions measures were unveiled a few days later, they coincided with the second tranche of sanctions from the EU, the US, the UK, Canada, Australia, and Japan. The result of Wellington’s decision was still notable. In the early stages of Russia’s invasion of Ukraine, New Zealand was the world’s only new sanctioner, (a streak that was broken once the Federated States of Micronesia ceased relations with Russia in their entirety). But while now firmly on the sanctions team, New Zealand was still a bit out of step. The Ardern government was talking up its own unity with partners who were moving ahead with a series of much tougher measures.
Those restrictions extended to a much wider range of Russian banks, companies and individuals (including oligarchs with close connections to the Kremlin). Most interesting perhaps, was Washington’s employment of a foreign direct product rule to prohibit Russia from importing goods containing American-made high technology components such as semiconductors. That rule is designed to apply not just to goods sourced from the United States itself, but from other countries too. And some of the latter, including the EU, the UK, Canada, Japan, and Australia, have been willing to adjust their own export control rules to enable a wider application of Washington’s prohibition. That collective move had a quick impact, and was joined by Taiwan, where the world’s biggest semi-conductor foundry is located.
At this point the evolving sanctions picture was already moving so quickly as to be hard to keep track of. But watching that process evolve suggested that there is a difference between New Zealand being in line with its partners at a particular moment and New Zealand staying in line. Which leads one to wonder if there are elements of the second tranche which Wellington might also adopt despite the autonomous sanctions gap. If the sovereign debt question involves Russia’s central bank, (part of the official apparatus) could this be one of those measures? Could New Zealand apply travel sanctions to members of the Duma who voted to recognise Ukraine breakaway republics? And, given that some manufactured goods and supply chains that involve New Zealand firms are likely to include high technology components from the US, could Wellington adjust its export controls to amplify Washington’s prohibition? This is about more than the defence or dual use equipment covered in New Zealand’s own export controls announcement.
More options for Wellington have come into view once a third tranche of western sanctions emerged as Russian forces closed in on Kyiv. Some Russian banks are being excluded from SWIFT, the international financial exchange system. The EU, the US and Canada have announced that they will restrict the Russian Central Bank’s use of hundreds of billions of dollars in reserves. Vladimir Putin and his Foreign Minister Sergei Lavrov have been added to asset freeze lists which are also filling up with other prominent Russian individuals. European air space has been closed to Russian airlines and a growing range of sanctions are also being imposed on Belarus for its active support and enabling of the invasion.
Without any evident graphical skills I have been keeping a chart on who is sanctioning Russia and with what. While the what part of my crude chart has been growing, the who part remains dominated by western democracies, with an especially strong trans-Atlantic representation. There are very few additional sanctioners beyond those I’ve named above. Whether you prefer the Indo-Pacific or Asia-Pacific nomenclature, New Zealand’s wider region has not been prominent in joining in. Some of those absences (especially China’s) are unsurprising. India is also a no. But there has been some recent movement in both Northeast and Southeast Asia. South Korea has joined in on the sanctions regarding high-technology sales to Russia and the use of SWIFT by some Russian banks. Singapore has also been a recent mover, announcing export controls that sound similar to New Zealand's, alongside as yet unspecified restrictions on some financial transactions.
That’s a big deal for two reasons: Singapore’s foreign policy normally has very little appetite for sanctions, and its decision makes it the first of the ASEAN Ten to cross that threshold on this occasion. But I’m yet to notice sanctioners appearing from the Middle East, or Africa, or from the Americas south of the US border. And the only members of the Pacific Islands Forum to announce sanctions appear to be the two parts of Australasia, although there is a growing unity of voice dimension emerging.
You can play it both ways for what this variegated picture means for New Zealand. The glass half full says however modest Wellington’s sanctions effort might be, the Ardern government still stands out for crossing that rubicon. The half empty vessel says that while New Zealand is inside the tent, it hasn’t bought many provisions. As the other partners reveal the cavernous sanctions sanctions they are diving into, MFAT officials are outside turning over sundry rocks in case a legally deployable sanction lies underneath. And as that small list of extra measures is prepared for the Cabinet’s consideration, only so much more value can be extracted from the moral clarity of New Zealand’s voice. In fact many of the partners are working to offer more direct support to an embattled Ukraine than sanctions on Russia ever will. They are trying to make sure Volodymyr Zelenskyy and his government have additional lethal military capabilities to dent Russia’s advance.
It’s only fair to ask whether New Zealand would be willing to take that qualitatively different plunge. Very like-minded Germany is having a foreign policy change of heart and sending weapons to Ukraine. Ardern has ruled out that option, preferring to focus on humanitarian assistance funding through the Red Cross and United Nations. But as Australia’s decision indicates, there may be financial ways to join the lethal assistance effort via NATO, with whom New Zealand apparently maintains a close partnership. Supporting trans-Atlantic efforts to provide lethal assistance would mean some big soul searching in Wellington. It would also mean finding funds from (or for) the defence budget. And that would mean attracting the attention of New Zealand’s Defence Minister, whose voice, unlike Ardern’s and Mahuta’s, has remained unheard as Europe’s security faces its severest military test in decades.
Second, the government is scrambling to see what other sanctions options New Zealand might have at its disposal. These seems likely to include stronger diplomatic restrictions. The expulsion of the Russian Ambassador is unlikely to be the next step in this chain, but sits towards the end of that game plan. More travel restrictions seem almost inevitable. And as the Prime Minister has recently indicated, it means having a look at what might be done if super-rich Russian oligarchs with ties to the Kremlin are found to have money stashed away in New Zealand (although, in cases where they do, in the absence of autonomous sanctions legislation, Wellington’s practical options may be few).
Third, when you don’t have many cards in your hand, the best way to impress others at the sanctions table is to play all of them at once. New Zealand’s partners sat down at that table as soon as Putin recognised the independence claims of the breakaway portions of Eastern Ukraine and indicated that Russia would use force to support them. The first western sanctions tranche was not overwhelming: indeed there were concerns in the US and the UK that Joe Biden’s Administration and Boris Johnson’s government had not gone far enough. But some of the moves were significant. Germany played its biggest sanctions card: halting certification of the Nordsteam 2 natural gas pipeline from Russia. A number of western governments, including the US, Japan and Canada, restricted purchases of Russian sovereign debt. The EU (which became the EU Plus with the involvement of non-members Norway and Iceland) and Canada put much of Russia’s Duma on their sanctions lists. Meanwhile Australia’s initial measures, while not massive, still required the Morrison government to put into effect the recently adopted Magnitsky style legislation.
At that point, New Zealand’s quick response consisted of joining the condemnation of Russia. To the extent that New Zealand was in line with its partners, it was happening by voice rather than concrete action. When New Zealand’s three sanctions measures were unveiled a few days later, they coincided with the second tranche of sanctions from the EU, the US, the UK, Canada, Australia, and Japan. The result of Wellington’s decision was still notable. In the early stages of Russia’s invasion of Ukraine, New Zealand was the world’s only new sanctioner, (a streak that was broken once the Federated States of Micronesia ceased relations with Russia in their entirety). But while now firmly on the sanctions team, New Zealand was still a bit out of step. The Ardern government was talking up its own unity with partners who were moving ahead with a series of much tougher measures.
Those restrictions extended to a much wider range of Russian banks, companies and individuals (including oligarchs with close connections to the Kremlin). Most interesting perhaps, was Washington’s employment of a foreign direct product rule to prohibit Russia from importing goods containing American-made high technology components such as semiconductors. That rule is designed to apply not just to goods sourced from the United States itself, but from other countries too. And some of the latter, including the EU, the UK, Canada, Japan, and Australia, have been willing to adjust their own export control rules to enable a wider application of Washington’s prohibition. That collective move had a quick impact, and was joined by Taiwan, where the world’s biggest semi-conductor foundry is located.
At this point the evolving sanctions picture was already moving so quickly as to be hard to keep track of. But watching that process evolve suggested that there is a difference between New Zealand being in line with its partners at a particular moment and New Zealand staying in line. Which leads one to wonder if there are elements of the second tranche which Wellington might also adopt despite the autonomous sanctions gap. If the sovereign debt question involves Russia’s central bank, (part of the official apparatus) could this be one of those measures? Could New Zealand apply travel sanctions to members of the Duma who voted to recognise Ukraine breakaway republics? And, given that some manufactured goods and supply chains that involve New Zealand firms are likely to include high technology components from the US, could Wellington adjust its export controls to amplify Washington’s prohibition? This is about more than the defence or dual use equipment covered in New Zealand’s own export controls announcement.
More options for Wellington have come into view once a third tranche of western sanctions emerged as Russian forces closed in on Kyiv. Some Russian banks are being excluded from SWIFT, the international financial exchange system. The EU, the US and Canada have announced that they will restrict the Russian Central Bank’s use of hundreds of billions of dollars in reserves. Vladimir Putin and his Foreign Minister Sergei Lavrov have been added to asset freeze lists which are also filling up with other prominent Russian individuals. European air space has been closed to Russian airlines and a growing range of sanctions are also being imposed on Belarus for its active support and enabling of the invasion.
Without any evident graphical skills I have been keeping a chart on who is sanctioning Russia and with what. While the what part of my crude chart has been growing, the who part remains dominated by western democracies, with an especially strong trans-Atlantic representation. There are very few additional sanctioners beyond those I’ve named above. Whether you prefer the Indo-Pacific or Asia-Pacific nomenclature, New Zealand’s wider region has not been prominent in joining in. Some of those absences (especially China’s) are unsurprising. India is also a no. But there has been some recent movement in both Northeast and Southeast Asia. South Korea has joined in on the sanctions regarding high-technology sales to Russia and the use of SWIFT by some Russian banks. Singapore has also been a recent mover, announcing export controls that sound similar to New Zealand's, alongside as yet unspecified restrictions on some financial transactions.
That’s a big deal for two reasons: Singapore’s foreign policy normally has very little appetite for sanctions, and its decision makes it the first of the ASEAN Ten to cross that threshold on this occasion. But I’m yet to notice sanctioners appearing from the Middle East, or Africa, or from the Americas south of the US border. And the only members of the Pacific Islands Forum to announce sanctions appear to be the two parts of Australasia, although there is a growing unity of voice dimension emerging.
You can play it both ways for what this variegated picture means for New Zealand. The glass half full says however modest Wellington’s sanctions effort might be, the Ardern government still stands out for crossing that rubicon. The half empty vessel says that while New Zealand is inside the tent, it hasn’t bought many provisions. As the other partners reveal the cavernous sanctions sanctions they are diving into, MFAT officials are outside turning over sundry rocks in case a legally deployable sanction lies underneath. And as that small list of extra measures is prepared for the Cabinet’s consideration, only so much more value can be extracted from the moral clarity of New Zealand’s voice. In fact many of the partners are working to offer more direct support to an embattled Ukraine than sanctions on Russia ever will. They are trying to make sure Volodymyr Zelenskyy and his government have additional lethal military capabilities to dent Russia’s advance.
It’s only fair to ask whether New Zealand would be willing to take that qualitatively different plunge. Very like-minded Germany is having a foreign policy change of heart and sending weapons to Ukraine. Ardern has ruled out that option, preferring to focus on humanitarian assistance funding through the Red Cross and United Nations. But as Australia’s decision indicates, there may be financial ways to join the lethal assistance effort via NATO, with whom New Zealand apparently maintains a close partnership. Supporting trans-Atlantic efforts to provide lethal assistance would mean some big soul searching in Wellington. It would also mean finding funds from (or for) the defence budget. And that would mean attracting the attention of New Zealand’s Defence Minister, whose voice, unlike Ardern’s and Mahuta’s, has remained unheard as Europe’s security faces its severest military test in decades.
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