The stakes around sanctions circumvention have never been higher. The Russian invasion of Ukraine has made sanctions evasion a matter of life or death. Russia continues to use export revenues to fund its war economy, and, despite trade restrictions, Russian factories continue to churn out weapons using imported parts and machinery.

Meanwhile, growing antagonism between China and the United States has spurred Chinese officials to worry about their vulnerability to U.S. financial sanctions and therefore question the dollar’s dominant role in the global economy. China has begun developing an alternative financial infrastructure, which could one day undermine the dollar’s unique role in international trade.

“2022 matters a lot. Right at the start of those sanctions Russia is the 11th largest economy, I believe, and the amount of reserves that were blocked were substantially larger than any previous case,” says Daniel McDowell, associate professor of political science. “So the Russia case further demonstrates to the world that the United States not only has these capabilities and is willing to use them, but it's willing to use them against great powers, if we want to call Russia a great power,” he says.

“So countries like China, that were already taking steps to insulate themselves, they took note of that and they've intensified their efforts to reduce their own vulnerability. China has sped up the pace and they they've done this in part by working with Russia to help Russia evade sanctions,” says McDowell.

Listen or watch the full interview via The Sanctions Age.