How Significant Is New Zealand’s New Russia Sanctions Law?

New Zealand’s Parliament unanimously passed the Russia Sanctions Act on March 9. The new law marks a turning point in the country’s foreign policy.

The debate in Parliament underscored just how much Russia’s invasion of Ukraine has transformed the government’s position when it comes to sanctions. On the one hand, Foreign Minister Nanaia Mahuta and other Labor MPs were keen to emphasize the Russia-specific nature of the legislation – with repeated references to it being “targeted” in their speeches on the bill.

Yet on the other hand, they did not completely ring-fence the debate to Russia either – and were surprisingly candid when it came to the question of making much bigger changes down the track. Several senior Labor MPs, including Deputy Prime Minister Grant Robertson and Mahuta herself, conceded at least the principle that a more comprehensive autonomous sanctions regime that could be applied to any country was needed.

Both Mahuta and Prime Minister Jacinda Ardern signaled that the government was now working on such a proposal, with Mahuta to bring a paper to Cabinet in the coming weeks. Comments from Mahuta during the debate in Parliament on March 9 seemed to imply that we can probably expect this more generic autonomous sanctions legislation to be introduced to Parliament during the current Parliamentary term, which ends in late 2023.

This is a major shift in New Zealand’s foreign policy.

Despite the “autonomous” nomenclature, the introduction of a wider sanctions regime will probably see New Zealand foreign policy lose at least some of its independent streak. To understand why, consider speeches on the Russia bill last night from two different opposition MPs.

The Act Party’s foreign affairs spokesperson, Brooke van Velden, argued that other “authoritarian states” could follow Russia’s invasion playbook: “it could be Ukraine today, and Taiwan tomorrow.”

If these remarks still contained at least a modicum of ambiguity, van Velden later made her position crystal clear: “We need to make sure that, if another country does this in the future, like China to Taiwan, they know that we will have their back too, that this will not just be the end, it won’t just be Russia.”

National MP Simon O’Connor – the party’s associate foreign affairs spokesperson – also openly referred to China in his remarks on the Russia bill. O’Connor told his colleagues that “another democracy, that of Hong Kong, was crushed by the Chinese Communist Party” and that MPs needed to find the “courage” to introduce more comprehensive autonomous sanctions legislation once the Russia legislation had been passed.

In other words, the new Russia Sanctions Act could very much be the thin end of the wedge. The inevitable pressure to use new sanctions powers will probably cause New Zealand to gradually drift closer to Western partners – as it has done over Russia in the past fortnight.

A look back over recent weeks shows how dramatic the change in New Zealand’s positioning has been.

Just a few short weeks ago, Labor appeared to be content with its repeated past vetoing of an autonomous sanctions regime. Speaking just prior to Russia’s invasion of Ukraine last month, Mahuta largely sidestepped questions about whether New Zealand would impose sanctions on Russia in the event of war – instead heavily emphasizing the need for diplomatic efforts.

In their remarks immediately after the February 24 invasion, both Mahuta and Ardern initially endeavored to avoid contemplating formal sanctions.

A joint statement from Ardern and Mahuta issued on the evening of the invasion studiously avoided the word “sanctions” – but did promise New Zealand’s usual package of lower-level retaliation measures that include travel bans, export controls, and diplomatic downgrades.

When quizzed at a press conference on February 25, Ardern largely held firm on this approach and generally played down the idea of introducing sanctions – calling it “just one lever of many that New Zealand can pull.”

By February 28 – clearly feeling the heat from Western partners to do more – Ardern began talking about making changes to the Overseas Investment Act as an option for penalizing Russia further.

By March 1, this had turned into a pledge to introduce a “targeted legislative response” – which became the Russia Sanctions Bill that was passed under urgency on March 9.

The breakneck speed at which core elements of New Zealand’s own foreign policy are being rewritten is an echo of equally dramatic changes internationally.

Commentators and policymakers alike underestimated the likelihood that the Kremlin would decide to mount a full invasion of Ukraine. Those getting it wrong included everyone from the head of German intelligence, Bruno Kahl – who was in Ukraine when Russia invaded and had to be rescued by special forces – to prominent foreign affairs commentator Gwynne Dyer, who wrote in December: “There may be all kinds of threatening gestures, but Russia will not invade Ukraine.”

Geopolitical predictions are a tricky business.

Perhaps one of the most remarkable stories since the invasion – and a development not foreseen even just a couple of weeks ago – has been the extent to which private companies have sought to punish Russia, even without any legal compulsion to do so. Of particular significance was McDonald’s decision to close all 850 of its stores in Russia, adding to an ever-growing list of companies joining an effective trade boycott.

In New Zealand’s case, the example is dairy giant Fonterra, which suspended all exports to Russia not long after the invasion began.

Against the backdrop of overwhelming global solidarity with Ukraine, the pressure on New Zealand to fall into line with virtually every other Western country on sanctions was overwhelming.

By passing only bespoke sanctions legislation that targets Russia, the government has bought itself some time to deal with the wider autonomous sanctions question. But the new Russia Sanctions Act has now set a precedent, and the genie is clearly out of the bottle.