The government should consider sanctioning Russian sovereign debt if it is serious about forcing the Kremlin to change its behaviour, MPs were told today.
Emile Simpson, a research fellow at the Harvard Society of Fellows, told the Foreign Affairs Select Committee that current sanctions could be circumvented through a number of methods, noting that sectoral sanctions were "severely weakened" by debt issuance.
"If the EU or the US could sanction Russian sovereign debt, it would break that weakness in a sanctions regime and make the sectoral sanctions much more effective overnight and that… would immediately put a lot more pressure on Kremlin to change its behaviour in the Ukraine and Crimea," he said.
Simpson noted it was just one factor to consider, with others such as oil and foreign currency reserves, although it was "a weighty one".
Simpson pointed to a bill that has been introduced in the US Congress to do exactly this in the wake of the Skripal attack.
"There could be opportunity to coordinate with US on that, given that sanctions are more effective when coordinated," he added.
But it also depends what governments are seeking to do. For example, the US' recent punitive sanctions, against oligarchs such as Oleg Deripaska, have damaged President Putin's legacy building. They were "very effective. Oleg Deripaska is basically gone", said Mark Galeotti, senior research fellow at the Institute of International Relations.
"Putin is not in it for the money... he is about power and his historic legacy," Galeotti said. "But on the other hand, the people around him absolutely are in it for the money and that is something we should be considering. Not because they are all going to rebel against him. We are playing two wars: one is to change Russia now, stopping certain behaviours and another one is for the next generation."
Simpson noted that punitive sanctions could make conflict "entrenched", arguing that the EU should not deploy this approach. He also warned against conflating Magnitsky measures with sanctions. "I would be wary of going down the US road where all sanctions are conflated together, and it's very hard to see what links to what.
"Sanctions are effective when linked to clear goals that that a state can take to reverse them and you can't reverse a punitive sanction."
Committee chair Tom Tugendhat, who has raised this matter previously with both the Prime Minister and her foreign secretary Boris Johnson, said he would be sharing this evidence with Nicky Morgan's Treasury Select Committee.
In a subsequent hearing with the same committee, former chess grandmaster and activist Garry Kasparov told MPs that he could not relocate to London because of concerns he had about the number of Russians living in the UK capital, some of whom were attracted by their ability to launder money.
Speaking via video link from New York, he added there was now "some sense of panic" about a crackdown, saying more can be done but noting he "applauds" what has been done already because it means "Putin is no longer seen as the ultimate defender".
The former World Chess Champion also said the Russian President was "no strategic chess player" but rather a poker player with a bad hand, who keeps upping the stakes until others fold.