Russian Sanctions: How did we get here?
On March 20, President Obama issued Executive Order 13662 authorizing more extensive sanctions against Russian officials and businesses in response to Moscow’s deployment of military forces in Crimea. The move expanded Executive Orders 13660 and 13661 issued earlier in March, which authorized the Secretary of Treasury to impose sanctions on “named officials of the Russian government,” “individual[s] or entit[ies] that operate in the Russian arms industry,” and individuals or entities that support senior Russian government officials. This latest round of sanctions adds Russian President Vladmir Putin’s wealthy inner circle of friends to the list of senior government officials from Russia and Ukraine, who were already subject to financial restrictions under the earlier Executive Orders. Russians considered to have deep enough pockets to make the list include Gennady N. Timchenko, a wealthy Russian investor with links to Putin, and Yuri V. Kovalchuk, reportedly the personal banker to Putin and other Russian leaders.
Source of the Power
Under the International Emergency Economic Powers Act, the President may regulate and prohibit foreign transactions, transfers of credit or payments through banking institutions, and currency and securities imports and exports during specified times of national emergencies. The President may exercise these powers only when an “unusual and extraordinary threat” exists and “the President declares a national emergency with respect to such threat.” The source of the threat, however, must be wholly or substantially outside the United States, with impacts on the national security, foreign policy, or economy of the United States. Congress checked the President’s authority by requiring a new declaration for a new national emergency if the President wished to impose any new sanctions not related to the previously named issue.
An Unusual and Extraordinary Threat
But for a declaration of a national emergency to deal with a specific unusual and extraordinary threat, President Obama could not avail himself of this statutory power granted to him by Congress in response to the crisis in Ukraine. On March 6, he did just that when he declared through Executive Order 13660 that actions by individuals in the Crimean region who asserted “governmental authority” without Ukrainian authorization represented an “unusual and extraordinary threat to the national security and foreign policy” of the U.S.  It was a shot across the bow. The broad language covering “persons” whose “property and interests in property” are in the U.S. or come within the control of a U.S. person or foreign branch could easily be construed to cover Russian officials or citizens. By this stage, Russian forces were already stationed in Crimea, which would be considered an “action or polic[y] that threaten[s] the peace, security, stability, sovereignty, or territorial integrity of Ukraine . . . .”  Conversely, Executive Order 13660 made no mention of Russia or its leaders giving the administration a chance to see Moscow’s reaction without subjecting itself to Russian retaliation for specifically targeting Russian nationals. 
The President expanded the scope of the national emergency and unusual and extraordinary threat first mentioned on March 6, when he issued Executive Orders 13661 and 13662 (a prerequisite to issuing new sanctions). The former specifically noted the “actions and policies of the Government of the Russian Federation with respect to Ukraine – including the recent deployment of . . . military forces in Ukraine,” threaten Ukraine’s democratic processes, peace and stability. Executive Order 13662 pointed to Russia’s “purported annexation of Crimea and its use of force in Ukraine” as the reason for the expanded scope. Both set the stage for the administration to specifically target Russian government leaders, bankers, the arms industry, and specific individuals named in the annex of Executive Order 13661.
While both Executive Orders are strikingly similar, the President was required to issue EO 13661 because of the situational change in the Crimea region. Russia annexed Crimea, which constituted a new threat and a new national emergency. If Russia invades eastern Ukraine, something that has gone from unlikely to possible according to a classified intelligence report, we can expect a new Executive Order since the White House issued 13661 after Russian troop deployments and 13662 following the annexation votes. Until then, Section 1(a)(i) of Executive Order 13662 is broad enough that it will permit the Secretary of Treasury to expand sanctions into more sectors of the Russian economy in order to bring Putin back from the edge.
Will it work?
The administration’s end game with these sanctions appears to be two fold: punish Vladmir Putin and his circle of supporters for violating Ukraine’s sovereignty and threaten the stability of the broader Russian economy just enough so that further incursion into eastern Ukraine is clearly against the national interest. Russia has an estimated 30,000 troops at its border with Ukraine, with some drawing comparisons with this buildup to actions just prior to Russia’s invasion of Georgia and Chechnya. Will these troops actually cross the border is yet to be seen, but with President Obama’s threats to expand sanctions into Russia’s energy sector, there is hope for a peaceful drawdown especially . According to analysts, the “surgical sanctions” thus far have been designed to pressure those closest to Putin to withdrawal support rather than hurt the broader Russian economy.
Putin’s popularity rose with the improvement of the Russian economy from 2000 to 2008. During his first eight years as president, his approval ratings steadily increased fifteen percent from 70% to 80% with the Russian population. He began 2014 at 65% and currently has overwhelming approval from 80% of the population. As Adam Taylor from the Washington Post notes, “Putin’s aggressive, anti-U.S. stance over Crimea is resonating with a lot of ordinary Russians.” From here, Putin has two paths: (1) claim a win with the annexation of Crimea, which the West privately acknowledges is lost , and ride out this popularity while slowly letting the tension over Ukraine dissipate or (2) risk further sanctions and a direct hit to the broader economy, which could directly impact approval ratings and hope that further displays of Russian power and disregard for the West will counterbalance domestic disapproval for any economic hits. Let’s hope for the former…
 See Exec. Order No. 13662, 79 Fed. Reg. 16169 (Mar. 20, 2014); Exec. Order No. 13661, 79 Fed. Reg. 15535 (Mar. 16, 2014). See also Press Release, White House, Fact Sheet: Ukraine Related Sanctions (Mar. 17, 2014) available at http://www.whitehouse.gov/the-press-office/2014/03/17/fact-sheet-ukraine-related-sanctions.
 Fact Sheet: Ukraine Related Sanctions, supra note 1.
 See Mark Landler, Annie Lowrey, and Steven Lee Meyers, Obama Steps Up Russia Sanctions in Ukraine Crisis, N.Y. Times, March 20, 2014, http://www.nytimes.com/2014/03/21/us/politics/us-expanding-sanctions-against-russia-over-ukraine.html?_r=0 (describing Obama’s reasons for going after Putin’s associates as an attempt to prevent Russia from venturing further into the Ukraine); see also The World’s Billionaires – #78 Gennady Timchenko, Forbes, March 20, 2014, http://www.forbes.com/profile/gennady-timchenko/ (listing Timchenko’s net worth at $13.4 billion and his status as #78 on the list of the World’s billionaires).
 50 U.S.C. § 1702(a)(1)(A)(i)-(iii) (2013)
 50 U.S.C. § 1701(a).
 50 U.S.C. § 1701(b).
 Exec. Order No. 13660, 79 Fed. Reg. 13493 (Mar. 6, 2014) (describing the actions as a threat to Ukraine’s territorial integrity).
 Id., Section 1(a)(i)(B).
 Id. (failing to mention Russia or Russian Federation).
 Exec. Order No. 13661
 See Exec. Order 13662, Section 1(a); see also Exec. Order 13661 annex (listing seven individuals including State Duma Deptuties, the Deputy Prime Minister, and a Presidential Advisor).
 Compare Exec. Order 13226, Section 1(a)(i) with Exec. Order 13221, Section 1(a)(ii)(B) (noting EO 13226 uses openended language including “such sectors of the Russian Federation economy,” when EO 13661 limits its focus to the arms sector).
 Peter Baker and Michael D. Shear, U.S. Challenge Now is to Stop Further Putin Moves, N.Y. Times, Mar. 25, 2014, http://www.nytimes.com/2014/03/26/world/europe/us-challenge-now-is-stopping-further-putin-moves.html
 Jeff Mason and Lidia Kelly, U.S., EU to work together on tougher Russia sanctions, Reuters, Mar. 26, 2014, http://www.reuters.com/article/2014/03/26/us-ukraine-crisis-idUSBREA2P0VB20140326
 See Mark Lander, supra note 3 (describing those targeted by the sanctions as really close to Putin and noting sanctions targeting the energy sector would have a real economic effect).
 Chris Arnold, How Russia’s Annexation of Crimea Could Hurt Its Economy, Nat’l Pub. Radio, March 26, 2014, http://www.npr.org/blogs/parallels/2014/03/26/294877200/how-russias-annexation-of-crimea-could-hurt-its-economy (describing Putin’s rise in popularity as correlated to the oil boom and a strong economy in Russia).
 See Adam Taylor, Putin’s approval rating hits 80 percent, Washington Post, March 26, 2014, http://www.washingtonpost.com/blogs/worldviews/wp/2014/03/26/putins-approval-rating-hits-80-percent/ (highlighting that only eighteen percent of Russians appear unhappy with Putin’s leadership).
 See id. (prefacing that polls such as the one discussed have a lot of caveats).
 See Baker, supra note 14 (mentioning the U.S. will not recognize the annexation of Crimea but accepting that it is lost to Russia).
 E.g. Arnold, supra note 17 (discussing Putin’s popularity in the context of Russia’s economic performance and stressing the importance of foreign investment in Russia).