Should Ukraine Drop Sanctions against Russian Tech Companies?

Policy Brief

Should Ukraine Drop Sanctions against Russian Tech Companies?

Ukraine fundamentally altered its approach to regulating the internet in 2017 when it introduced economic restrictions (sanctions) against thousands of Russian individuals and legal entities. This brief analyzes the effectiveness of the sanctions in achieving their declared national security aims, as well as the impact these measures have had on the digital rights and freedom of expression of Ukrainian citizens. It concludes with recommendations with the Ukrainian government, civil society and the international community to strike a more appropriate balance between human rights, security, and achieving tangible policy results.

Written by
Olga Kyryliuk, PhD
CEO, The Influencer Platform

EXECUTIVE SUMMARY

  • Ukraine fundamentally altered its approach to regulating the internet in 2017 when it introduced economic restrictions (sanctions) against thousands of Russian individuals and legal entities.
  • The sanctions have significantly infringed on Ukrainians’ digital rights and freedom of expression and damaged the country’s information space and economic interests. At the same time, they did not go far enough in achieving the stated goals of their supporters.
  • The consistency of these sanctions with freedom of expression standards is dubious given the guarantees provided by Ukrainian and international human rights law, as well as rulings that broad sanctions on media platforms are unlawful. The way in which the Ukrainian authorities introduced the sanctions and their accompanying legal framework also raises numerous rule-of-law concerns, further undermining the legitimacy of these measures.
  • Moreover, the sanctions do not seem to have eliminated the threat of Russian propaganda or significantly contributed to building a more secure national information space. It is increasingly clear that the threat of disinformation is not unique to the Russian-controlled platforms that were targeted with sanctions.
  • With major changes in Ukraine’s political leadership, the country has yet another chance to address the dueling challenges of defending freedom and maintaining national security. By strengthening its commitment to human rights and democratic values, Ukraine can build a strong foundation for tackling such challenges in the digital age.

BACKGROUND

The freedom of expression is one of the most crucial human rights in the digital age and is an essential pillar of any democratic governance model. Indeed, the presence of a diverse media and information space is a litmus test for a state’s adherence to the values of the freedom of speech and the rule of law. Yet, as we’ve observed across the world, the more opportunities people have to share information and express their opinions, the greater the scrutiny of their freedom of expression. Online restrictions are often justified by governments with claims that the situation in their jurisdictions is unique and exceptional, necessitating the limitations they impose. Such measures are, in many cases, portrayed as temporary; in reality, they are only the beginning of a cascade of increasing controls. According to the Freedom on the Net 2018 report, dozens of countries approved or proposed laws that would restrict online media in the name of fighting “fake news” and online manipulation in the last year alone.1

Unfortunately, Ukraine – once a country with free and unrestricted internet – began its path towards greater internet restrictions when, in mid-May 2017, then-President Petro Poroshenko approved a decision by the National Security and Defense Council (NSDC) on the application of economic sanctions against nearly two thousand Russian individuals and legal entities. This set of allegedly economic restrictions, in fact, led to major restrictions on online platforms and content and set off a major debate over the freedom of expression in the country for years to come.

In addition to blocking websites, Ukrainian law-enforcement has aggressively used other tools to achieve their goals. According to the SSU,2 in 2018 alone it identified and blocked 360 cyber incidents, convicted 49 administrators of social network groups for “anti-Ukrainian propaganda,” and began proceedings against an additional 29 individuals. The data also show that “preventive measures” were taken against 220 group administrators who were allegedly disseminating information of a destructive nature to over ten million internet users. Through these sanctions and other measures, Ukraine transformed its online regulation paradigm, moving from a hands-off approach to one by which the freedom of expression and national security are viewed as mutually exclusive values in a zero-sum game.

This paradigm shift occurred in an environment in which nationalistic sentiments were on the rise after the 2014 revolution and Russia’s incursion into Ukrainian territory. This environment left little space for considering serious questions about the timeliness, proportionality, and effectiveness of the restrictions, which persist to this day. Several years after their introduction, it is clear that the measures resulted in significant and unanticipated collateral damage to Ukraine’s freedom of expression, informational space, and economic interests; moreover, they did not make meaningful progress in achieving the goals officials offered as their justification.

The 2017 economic sanctions led to the blocking of a wide range of Russian-owned web platforms, including social networks VKontakte (VK) and Odnoklassniki (OK), the email service Mail.ru, the search engine Yandex, over 50 online services provided by Yandex Group in Ukraine (including maps and taxi services), and the cybersecurity and anti-virus software developed by Kaspersky Lab and Dr. Web.3 President Poroshenko imposed the sanctions and blocking until mid-May 2020. In March 2019 he signed a new sanctions decree that, inter alia, imposed a new three-year ban on Yandex, even though the 2017 sanctions were still in force for one more year.4

The President and the Security Service of Ukraine (SSU) publicly justified the restrictions with the need to protect national security, restrict “anti-Ukrainian” propaganda, and safeguard Ukrainians’ data. Notably, these particular justifications appear to have little connection with the economic threats that economic sanctions would ordinarily be expected to address. In his last post published on VK on May 16, 2017, former President Poroshenko urged “all compatriots to log out from Russian servers due to security concerns.”5 The former Secretary of the NSDC, Oleksandr Turchynov, claimed that OK and VK were used for “waging information aggression and propaganda against Ukraine,” illegally collecting [Ukrainians’] information, “recruiting a network of agents for Russian intelligence agencies,” and the “distribution of pirated content.”6 In a statement on its website, the SSU encouraged all businesses to execute the restrictions unconditionally, claiming that Russian intelligence services were sharing “anti-Ukrainian calls for radical armed protests” via the online services.7

Despite these dire warnings, support for the restrictions was far from unanimous. Earlier in 2017, then-Minister of Information Policy (MIP), Yuriy Stets, claimed that a ban on Russian social media would lack a legal basis and establish a precedent too enticing for future leaders to resist.8 Yet, after the President introduced sanctions, a MIP official commented that although the Ministry considers the freedom of expression to be a key value, the NSDC decision is consistent with the national interest.9 Around the same time, former Chair of the Parliamentary Committee on the Freedom of Speech, Viktoriia Siumar, said that in order for an internet resource to be blocked, the SSU must provide sufficient evidence of either a human rights violation, a direct incitement to conflict, or war propaganda; in addition to this evidence, a court order is preferred.10 A representative of the Parliamentary Commissioner for Human Rights (Ombudsperson) confirmed this, noting in 2017 that blocking any internet resource requires a court order under Ukrainian law.11

It is unclear how the new Ukrainian political establishment, which came to power after the 2019 presidential and parliamentary elections, will deal with the sanctions introduced by their predecessors. During his campaign, President Volodymyr Zelenskyy compared blocking websites to the state’s lack of control over illegal parking in Kyiv, noting that fines for illegal parking can only be imposed if there is proper infrastructure in place. On social networks, Zelenskyy suggested users be given alternatives prior to considering wholesale blocking, and noted that because the authorities had failed to explain the real rationale behind the sanctions, they had not secured enough public support.12 However, in mid-July 2019, the Zelenskyy-appointed NSDC Secretary Oleksandr Danyliuk reminded “state authorities of the need to ensure rigorous observance of sanctions and monitoring of their efficiency until their expiration or termination.”13

LEGAL FRAMEWORK AND REACTION OF THE INTERNATIONAL COMMUNITY

International human rights law14 and Ukraine’s Constitution (Art. 34) guarantee the right to the freedom of opinion and expression. However, the freedom of expression is not an absolute right and can be limited if the restriction meets the three-part test elaborated by the European Court of Human Rights (ECtHR); in particular, this test dictates that the restriction be necessary for a democratic society, pursue a legitimate aim, and be provided for by law. Failure to meet any of these requirements indicates that the restriction constitutes an illegitimate interference in the freedom of expression. When it comes to the internet, these same rules apply, as does the general requirement that restrictions be specific and avoid generic bans on the operation of entire sites and platforms – an approach which the ECtHR recognized as excessive in other cases.15

Based on these standards, the sanctions mechanism invoked to block access to online resources in Ukraine is quite dubious, and raises numerous rule of law and human rights concerns. First and foremost, the sanctions were introduced by a decision of the NSDC that was approved and enacted by a presidential decree. Under human rights law, both the NSDC decision and presidential decree are considered by-laws and thus do not qualify as being “provided by law.”16 Moreover, the United Nations Human Rights Committee has determined that, in order for a norm to be characterized as a “law,” it must be formulated with sufficient precision to enable an individual to regulate their conduct accordingly; “laws” must provide “sufficient guidance to those charged with their execution to enable them to ascertain what sorts of expression are legitimately restricted and what sorts are not.”17 Ukraine’s sanctions do neither.18

As noted above, the provision that a restriction is “provided by law” requires it to be sufficiently precise so as to have foreseeable implications. The Ukrainian authorities’ requirement that internet providers block access to certain online resources does not meet these requirements, as it gives no clarity to providers on when they must comply with the requirement or who should pay for its implementation. While officials repeatedly promised that the SSU was developing instructions for implementing the decree, no apparent guidance has followed. Moreover, the authorities neither established a formal mechanism to monitor compliance with the restrictions nor officially articulated consequences for non-compliance.

The NSDC decision and the President’s decree are inconsistent with existing Ukrainian telecommunications and national security laws, underscoring the poor legal and technical basis for the restrictions. For example, the decree prohibited “internet providers” from providing access to online resources belonging to sanctioned companies; however, the term “internet provider” does not exist in Ukrainian law, as internet services are provided by “operators or providers of telecommunications.” Moreover, the decree contradicts Art. 10 of the Law on the National Security and Defense Council, according to which its decisions are binding only upon state executive authorities, which does not include the internet providers themselves.19 Due to this, there appears to be no formal liability for providers who do not comply with the sanctions. Nonetheless, adding to the legal uncertainty, the National Commission for the State Regulation of Communications and Informatization communicated to “operators and providers of telecommunications”- not to the “internet providers” noted in the decree – that, based on the Law of Ukraine on Telecommunications and licensing agreements, they are obligated to comply with the decree and can be held liable for noncompliance.20 The NSDC decision also runs contrary to previous practice, which limited avenues for restricting content and penalizing offenders by requiring a court order.

Despite the ambiguity of providers’ legal responsibilities to implement the restrictions and the absence of a court order, a majority of them followed the sanctions requirements. According to recent nationwide network testing by Digital Security Lab Ukraine, 50 of the 70 providers tested blocked more than half of the sanctioned online resources.21 The test also showed that the resources blocked by providers varied considerably by region.

While national security arguments for forceful responses to Russian disinformation may be logical in view of Ukraine’s significant security challenges, it is far from clear if the restrictions imposed in Ukraine can be considered legitimate interference in a democratic society according to the aforementioned tests for proportionality and necessity. According to international human rights standards, in order to be considered a legitimate interference in the freedom of expression, the limitation must be the “least intrusive instrument”22 for achieving the relevant purpose. In addition, courts are typically required to assess the context, medium of dissemination, and size of the audience before issuing a content-specific restriction on a publication or media outlet. Whether the NSDC conducted such an assessment or considered other means for achieving the declared goal remains unclear.

The necessity and proportionality of the sanctions were also questioned by the international community, namely the Office of the United Nations High Commissioner for Human Rights (UNHCR) in Ukraine and the Secretary General of the Council of Europe (CoE).23 Several advocacy groups shared this view, such as Reporters Without Borders, which said the ban was neither proportionate nor justified in light of the security challenges faced by Ukraine,24 and ARTICLE 19, which called website blocking a severe form of censorship that will inevitably result in an unnecessary and unjustifiable restriction on the freedom of expression for millions of Ukrainians. The organization also doubted that indiscriminate restriction of access to legitimate content will improve the situation in the country and argued that preventing the free flow of information about issues related to the conflict will, in fact, undermine Ukraine’s democratic development.25 Human Rights Watch was also among the most vocal critics, claiming that the ban was an attempt to control public discourse in Ukraine.26

Many other countries have also directly blocked social media platforms, often with security arguments similar to those made by the Ukrainian authorities. For example, in April and May 2019, Sri Lanka shut down many social media platforms and online services, including Facebook, Facebook Messenger, WhatsApp, Instagram, YouTube, Viber, Snapchat, and Twitter, in response to the wave of Easter bombings targeting hotels and churches across the country. Access to VPN services was also restricted during the April round of shutdowns. Surprisingly, the Sri Lankan government’s reaction received some support27 from the Western world.28 In addition, just a few months earlier, in December 2018, the Sudanese government ordered the blocking of Facebook, Twitter, and WhatsApp in an apparent effort to disrupt protests against the ruling regime.29 Venezuela repeatedly restricted access to multiple online services during anti-government protests in April 2019.30 Other countries are also active in blocking access to internet services, among them are Pakistan, Iraq, Syria, and Turkey.31 Yet these countries, hardly exemplars of good democratic governance, show how blocking is a popular tool among authoritarian-minded leaders rather than those who respect basic human rights standards and democratic principles.

CLAIMED ECONOMIC CONSEQUENCES AND EFFICIENCY

The sanctions do not appear to have achieved their initiators’ desired economic goals. From the very beginning, the authorities have claimed that the sanctions are aimed at dealing a financial blow to Russian companies, and thus to the Russian government’s budget and its military expenditures in Ukraine. Yet this impact is far from clear. For example, the economic impact on one major target of the sanctions, the Mail.ru Group, appears to be relatively minor. According to the company’s financial results for Q2 2017, its VK social network continued to perform strongly with demonstrated growth in engagement.32 The group’s revenues grew 59.1 percent year-over-year to more than three billion rubles (approximately $46 million), with advertising revenues growing the fastest. Despite the blocking of VK in Ukraine and regular seasonal variation, the total number of monthly active users grew in June 2017 to 91 million. While blocking Mail.ru Group services in Ukraine did impact the company’s revenue – resulting in a decrease of 1.5 percent of total revenues in 2017 – the rest of the business continued to perform well according to the company.

In fact, the sanctions may have culminated in decreased tax revenues and investment in Ukraine. According to the director of Yandex’s office in Ukraine at the time, the company was one of Ukraine’s largest corporate taxpayers; between 2013 and 2017, Yandex reinvested Ukraine-based income into the development of its Ukrainian services, among them the launch of Yandex Taxi Ukraine amounting to a seven million dollar investment.33 Furthermore, the restrictions likely negatively affected Ukrainian businesses that used those platforms for advertising their products and services; journalists who gathered information from sources on the platforms, including from parts of Ukraine not under government control, were also negatively impacted.

Next, the sanctions appear to have only moderately decreased – but not prevented – users in Ukraine from accessing the services provided by sanctioned companies. According to data provided by the research network Factum Group Ukraine, as of April 2019, VK and Yandex are still among the top ten domains visited by Ukrainian internet users, while OK and Mail.ru hold the eleventh and seventeenth positions, respectively.34 The analytical company SimilarWeb published similar numbers.35

Research recently published by the NATO Strategic Communications Centre of Excellence shows that VK is only 19 percent less popular in government-controlled areas of Ukraine compared to non-government controlled areas where they are freely accessible.36 Those users who continued using VK after the ban by circumventing it using a VPN or due to uneven implementation by providers consolidated their use by developing stronger connections with other users and consuming more information from a greater number of groups. While the number of users in ideological groups decreased threefold, the number of ideological posts increased by 122 percent after the ban, and “pro-Russian propaganda notably increased, while the share of ’Ukrainian news’ decreased.” The report also finds that the VK audience has become younger.

This data shows that the sanctions do not appear to have led to major changes in the use of the services provided by the Russian companies. What is more, they do not seem to have eliminated the threat of Russian propaganda or significantly contributed to building a more secure national information space as the Ukrainian authorities claimed it would. By banning VK, which policymakers perceived as the nexus of “anti-Ukrainian” propaganda online, Ukrainian authorities forced users onto other platforms, losing some ability to monitor and influence what people consume on VK, while also having little effect on the ongoing functioning of the VK platform itself. Moreover, the sanctions have polarized Ukrainian society even more by forcing a somewhat smaller number of users deeper into a problematic echo chamber. The sanctions have also introduced new security and privacy challenges for users; by forcing some users to access blocked online resources using VPN services, many of which do not offer robust data protection. In this way, the ban is actually exacerbating rather than addressing one of the problems it was intended to address.

In addition to pushing some users to consume and share more problematic content, government policy, largely limited to blocking access, did not include significant efforts to produce and encourage high-quality content in Ukrainian and Russian on political and non-political topics. By simply blocking access without creating or supporting viable alternatives, policymakers may have, in fact, undermined their stated goals for introducing sanctions in the first place.

While targeting Russian-owned platforms may have been logical in 2017 due to the conflict between the two countries, recent developments suggest a growing realization among policymakers that the threat of disinformation is not unique to platforms provided by Russian companies. Top officials at the SSU have begun to focus their attention on Facebook and Twitter, claiming that Russia is using these platforms to continue its information warfare against Ukraine.37 This new focus on non-Russian platforms lends credence to arguments that the sanctions have not achieved their goal of combating Russian propaganda – if that was indeed the goal at all.

RECOMMENDATIONS

In times of armed conflict, national security becomes an increasingly influential factor in determining a broad array of government policies and priorities, including those relating to the freedom of expression and belief. Yet, experience in Ukraine and many other countries shows that reactively blocking access to information is shortsighted and unlikely to be a successful long-term strategy for thwarting threats in the digital era, as there will always be new technologies and tools enabling the circumvention of any restrictions put in place. Blocking access to information is also in tension with the freedom of expression, which, while not an absolute right, should be restricted only as a measure of last resort, in the absence of less severe alternatives, and in a strictly limited and targeted fashion. The importance of freedom of expression is particularly apparent and critical in times of conflict when access to territory and information is limited. Based on these values and our assessment of the sanctions in Ukraine, we make the following recommendations to the Ukrainian government, civil society, and international community, which, in our view, would more appropriately balance human rights and security while achieving more tangible policy results than those achieved by the sanctions:

  • Produce high quality, multilingual, objective, and trustworthy Ukraine-focused content and increase the number of platforms involved in its dissemination both inside the country – including non-government-controlled territories – and outside it.
  • Create a strong fact-checking network, especially focusing on fact-checking information related to the conflict.
  • Hold multi-stakeholder consultations and request expert assessments of viability, effectiveness, and cost-benefit analysis before applying any restrictions or adopting policies regarding information and communication technologies, internet access, or digital rights.
  • Articulate clear justifications to the public for any restrictions and their methods of implementation, including how they address the underlying problem while maintaining respect for human rights.
  • Evaluate any proposals aimed at the regulation of social media through the lens of their potential impact on the freedom of expression.
  • Strictly comply with international human rights standards and best practices for protecting freedom of expression online that have been developed by international institutions, including by the United Nations, the European Court of Human Rights, and democratic countries around the globe (e.g., Freedom Online Coalition).
  • Refrain from blanket prohibitions on access to resources and ensure that the only legal grounds for removal of content or access is a court decision that follows a thorough and fair investigation of each case, provided that such a measure is necessary and proportionate to the pursued aim as required by international law.
  • If the authorities determine that limitations are absolutely necessary, formulate any limitations in a clear and precise manner, establish a realistic mechanism for their implementation, and strictly limit their duration.
  • Acknowledge the right of internet providers to refuse to comply with blocking requests when they are not in compliance with the state’s obligations under international human rights law and are disproportionate to the pursued aim unless otherwise required by a court decision. Organize nationwide awareness-raising campaigns aimed at improving internet users’ knowledge of digital rights, internet hygiene, harmful content, privacy, data protection, etc. Conduct periodic (for example, biannual or quarterly) transparency reporting on measures undertaken by the state to protect and safeguard the freedom of expression in times of conflict, especially if any restrictions have been imposed as part of those efforts.