Benjamin Hilgenstock: Sanctions, Russia’s Economy, and Energy Strategy

At the 7th Annual International Sanctions Conference “Guarding the Gate: Sanctions, Export Controls & Business Responsibilities”, Benjamin Hilgenstock joined leading economists and policymakers to explore the global impact of sanctions and export controls. The conference, organized by the Financial Intelligence Unit of Latvia (FIU Latvia) on November 6, 2025, highlighted how sanctions enforcement shapes both global security and economic resilience.

Sanctions, Export Controls & Business Responsibilities

The program opened with keynote remarks from Baiba Braže, Latvia’s Minister of Foreign Affairs, and Toms Platacis, Head of FIU Latvia. Their speeches set the stage for discussions on aligning sanctions with strategic goals, improving judicial cooperation, and enhancing compliance.

Moreover, expert panels examined topics such as “Sanctions on Trial: How the Courts Are Shaping Sanctions Policy,” “Following the Money: Risks in the Financial Sector,” and “Sanctions in Practice: Business Responsibility and Compliance.” Each session emphasized practical enforcement and cross-border cooperation.

In the panel “Counting the Global Cost: Sanctions and Economic Consequences,” moderated by Kārlis Bukovskis, the discussion featured Benjamin Hilgenstock of the Kyiv School of Economics and Matīss Mirošņikovs of Latvijas Banka. Together, they analyzed Russia’s wartime fiscal expansion, persistent inflation, and dependence on energy exports, agreeing that stronger sanctions and lower export volumes are essential to restrict Moscow’s war financing.

The conference concluded with the session “Guarding the Gate: Latvia’s Experience.” In it, Paulis Iļjenkovs of FIU Latvia and Uldis Cērps from the Finance Latvia Association reflected on Latvia’s achievements in sanctions coordination and national enforcement. Their discussion underscored how cooperation between institutions strengthens compliance and accountability.

Shift From Price to Volume

Benjamin Hilgenstock, Director of the Center for Geoeconomics and Resilience at the KSE Institute, called for tougher energy sanctions. He stressed that reducing export volumes, rather than only limiting prices, should be the main priority. Price caps, he argued, have limited effectiveness. In contrast, curbing export volumes would cut Russia’s revenues more quickly.

In addition, Hilgenstock urged the use of secondary sanctions to prevent banks and ports from helping Russia evade restrictions. These measures, he noted, would discourage third countries from undermining the global sanctions framework.

The panel also discussed Russia’s growing dependence on China for trade and consumer goods. Hilgenstock described this as a “temporary marriage of convenience,” warning that the relationship offers little long-term stability. He also observed that Western firms still operating in Russia face extended uncertainty. While a sudden collapse of Russia’s economy is unlikely, he added, persistent enforcement will gradually weaken its fiscal stability.

Further Reading

To explore in-depth monitoring of international sanctions against Russia, visit the KSE Institute’s Sanctions Hub. The Hub maintains a consolidated sanctions database and provides detailed reports on the impact of sanctions on Russia’s economy. It also features analyses of sanctions effectiveness, revealing patterns of enforcement and circumvention, as well as position papers and sectoral reports offering expert insights and policy recommendations from KSE researchers.

To gain further insights into sanctions on Russia and its economic retaliation measures, visit the SITE Sanctions Portal. This resource provides a detailed timeline and comprehensive evidence base that combines data, analysis, and expert commentary. It helps researchers, journalists, and policymakers navigate the evolving sanctions landscape. The SITE Sanctions Portal also explores the economic consequences of Western sanctions and Russia’s strategic responses.