Economic sanctions aim to exert pressure on a target nation or region to induce policy reforms or regime change. The effectiveness of sanctions depends on whether they inflict economic pain on the target (especially the targeted elite). This, in turn, depends on several factors. For trade sanctions, these factors include how readily a sanctioned nation can obtain substitutes for needed imports, the degree to which countries imposing sanctions rely on trade with a sanctioned partner, and the extent to which either side can rely on intermediary nations outside the sanctioning blockade to evade trade restrictions.

Our research examines how economic incentives and imperatives led to a de facto reversal of Ukraine’s sanctions against Donbas, a region in eastern Ukraine that borders Russia. Donbas contains virtually all of Ukraine’s anthracite coal deposits. In February 2014, following the Maidan Revolution that ousted pro-Russian President Viktor Yanukovych, pro-Russian protests broke out in Donbas. By May, secessionists had seized government buildings and declared independence from Ukraine. The resulting war between Ukraine and the secessionists continued until Russia invaded Ukraine in 2022. Following a failed ceasefire attempt in March 2017, the Ukrainian government banned trade with the landlocked Donbas region.

Several features of this setting make it relatively straightforward to document the impact of this economic blockade. First, and most importantly, because Donbas contains almost all of Ukraine’s anthracite deposits, we can attribute all recorded trade in Ukrainian anthracite to this region. Second, since Donbas is surrounded by Ukraine on one side and Russia—which did not support the blockade—on the other, any trade in Donbas anthracite after the blockade had to go through Russia, making it relatively simple to observe whether Russia acted as an intermediary. Third, Ukraine had relied on Donbas anthracite for much of its energy needs. Thus, while the blockade cut off Donbas from access to markets in Ukraine and beyond, it also meant that Ukraine could no longer purchase domestically the coal that had fueled its power plants, which were designed specifically to burn anthracite.

Our analysis uses United Nations Comtrade data on monthly import-export flows between countries by product. These data enable us to examine the blockade’s consequences by studying trade in anthracite from 2010 until the onset of the Russia-Ukraine conflict in early 2022. Our findings reveal that Ukraine’s reported anthracite exports dropped sharply through the first half of 2014, as secessionists took control of Donbas. During this period, it appears Ukraine either used or stockpiled all production of anthracite. When the blockade shut off the direct flow of anthracite from Donbas to Ukraine in 2017, Russia’s reported imports of Ukrainian anthracite increased threefold. Moreover, there was a commensurate increase in Russia’s reported exports of anthracite to Ukraine (which had previously not imported anthracite from Russia) and the rest of the world. Ukraine, by contrast, reported no anthracite exports to Russia during this period. The divergence between Ukraine’s reported exports to Russia and Russia’s reported imports from Ukraine suggests that Donbas anthracite—no longer controlled by Ukraine—may have been the source of Russia’s imports.

The timing of Russia’s increased imports of anthracite and concurrent exports to Ukraine suggests that Ukraine was purchasing anthracite from Russia that likely originated in Donbas. Additionally, nations that previously imported Ukrainian anthracite increased their imports from Russia after the blockade. Our analysis provides evidence that Russia served as an intermediary for Donbas anthracite, as Russian anthracite exports ended up in Ukraine even though Ukraine had initially imposed a blockade.

Our research also examines the parties that received economic benefits from this arrangement. After the blockade, Donbas anthracite producers could only sell to Russia, which gave Russian buyers significant negotiating leverage. We measured the extent to which Russian buyers benefited by comparing the price at which Donbas sold anthracite to Russia with a world price benchmark. We also compared the price of Russia’s exports to Ukraine with the world price. Our findings show that Donbas’s exports to Russia were significantly underpriced, but Russia’s exports to Ukraine were in line with world prices. These findings suggest that Russian traders exploited their position to profit from trade with blockaded mines. Ukraine could purchase anthracite from other nations, which limited Russian traders’ ability to mark up anthracite prices. However, Donbas could only sell anthracite to Russia, allowing Russian traders to purchase cheaper anthracite and profit by selling it to Ukrainians and others.

Our research highlights the geopolitical challenges of implementing economic sanctions when there is incomplete support for a blockade. Traders can circumvent sanctions when another nation serves as an intermediary. Additionally, the effectiveness of sanctions depends on the type of product being targeted. Ukraine’s dependence on anthracite and its difficulties in finding new suppliers forced the country to effectively undermine its own blockade. Thus, our research demonstrates the importance of broad participation and adequate monitoring to ensure the efficacy of sanctions. Policymakers should consider these lessons when sanctioning Russian oil and gas (ongoing at the time of writing), as these resources are reported to have been purchased in large part by buyers in other parts of the world.

NOTE
This research brief is based on Raymond Fisman et al., “The Undoing of Economic Sanctions: Evidence from the Russia-Ukraine Conflict,” Journal of Public Economics 249 (September 2025).