Mark Dixon: “We must declare the Economic World War on Russia”

Dixon runs a mergers and acquisitions consultancy in London and has owned a home in Lviv since 2009. In 2022, within a week of the full-scale invasion, he founded the Moral Rating Agency (MRA)—a tracker that measures and publicly rates Western companies’ involvement with Russia.

His conclusion today: sanctions have nibbled. Russia is getting richer. And, if President Trump “de-pariah-ises” Russia, some of the companies that left will go back.

Peeter Helme: Tell us about the Moral Rating Agency—how it started, how it works.

Mark Dixon: I started the Moral Rating Agency within one week of the February 2022 invasion. It took a few months to build, because we weren’t just investigating companies operating in Russia—we had to develop a way to measure them against one another across five dimensions of unethical behavior.

Speed was one of them. A lot of people felt that when a company left Russia, it had done a good job. And of course it was good news. But the ones that got out within three months of the invasion did a much better job than the ones that got out three years later.

We also looked at sacrifice. Some companies had a huge percentage of their profits in Russia, so it was obviously more difficult for them to leave. But a very large company with only half a percent of its profits coming from Russia didn’t even have to think—it would have been ridiculous not to leave. Companies that made greater sacrifices earned more points; companies that made no sacrifice earned none.

We also looked at how many activities a company exited and how many it is still in. Right now, the picture is very mixed and complex. There are still Western companies working in Russia or trading with Russia in areas where they’re allowed to, and many that have exited in some ways but not in others.

Peeter: Why was a rating agency even necessary? Were sanctions not enough?

Dixon: From the beginning, what the West should have done is impose a full trade and investment embargo against Russia—not individual sanctions, but a true embargo covering imports, exports, investment in both directions, the whole thing. There would have been no need for the Moral Rating Agency, because any business with Russia would have been illegal.

Our work came about because of the West’s weakness in following through on its threats to Putin. And so we had to prevail on people’s moral conscience—or, in practice, because companies very rarely have a moral bone in their body, we had to embarrass them.

Company executives care about their image not because they’re embarrassed to go home to their wives and husbands, but because it affects their share price, their consumers, their B2B relationships. They only do it for commercial reasons.

But we got to them through naming and shaming. And we’ve been careful to be factually precise—we haven’t been sued by anyone because no one can stop us saying how evil we think a company is so long as we get the facts right.

Peeter: How do you assess the situation now? As we all know, some companies have returned to Russia, and others have no intention of leaving.

Dixon: On a big-picture level, the Western world has been going in the wrong direction over the last year. It’s becoming fragmented, and that fragmentation makes it much harder to economically oppose Russia.

What has always disappointed me is that people in the West simply cannot understand how enormous a threat Russia represents—and even when the West was more cohesive, it was never cohesive enough to do enough about it.

My focus for the MRA right now is to make sure Western companies don’t go back to Russia. People may think that’s a crazy idea, but some have already. And the way Trump is speaking—always trying to make deals, always wanting to reach some kind of compromise—means that many companies will jump right back in if Putin becomes less of a pariah.

Trump is a pathological dealmaker. He will not stand on moral high ground or even strategic high ground and simply damage the enemy. He will make a deal. And we can’t make deals with the enemy.

Peeter: It sounds like you’re moving from moral shaming toward political lobbying?

Dixon: No. The MRA is going to stay focused on companies and what they should not do with Russia. That’s our expertise.

But separately, I’ve also drafted what I’m calling a declaration of the Economic World War—a 10-point plan based on nothing military, though I obviously support that 100%. It’s about making Russia poor.

I believe that if we can launch enough of these tornadoes in Russia’s direction, we can create a perfect storm. Even if not every tornado is fully implemented, if we launch enough of them, I believe we can sink the Russian ship.

The current situation is that we’re nibbling at Russia—nibbling from many directions. It has definitely damaged the Russian economy. But nibbling isn’t enough to hit the threshold where the Russian people rise up against Putin, or where Russia can no longer afford the war.

And with oil prices likely to stay high for a long time, Russia is actually getting richer now. We’ve spent four years trying to make Russia poorer—and now that progress is being reversed by one commodity that makes up such a large share of its economy.

I don’t want to say the Economic World War is the only way, because we can hope for a good surprise. But I believe economic pressure is most likely the only way to end this war quickly. We must make Russia so poor that it can’t afford the war, and so poor that its people won’t allow Putin to continue.

Peeter: Could you walk me through the plan? Where does it start?

Dixon: Oil. We made a mistake when we allowed Russian oil trapped in the world market to be shipped mostly to India, on the argument that it would help reduce the global oil price. But it did nothing to reduce the price—all it did was bring money to Russia and cheap oil to India, a country that has not been helpful. We need to learn from that mistake and not make any more oil exceptions.

The second point is the price cap, which is a feeble sanction approach. The West tried to cap Russian oil at $60. But if the market price for Russian black-market oil is already below $60, you’re capping something above the market price—it has no effect at all.

You should stop the oil, not cap it. Oil should not be able to travel through ports that the West controls. It should be an embargo, not a cap.

And that embargo needs real secondary enforcement. Trump tried to use trade pressure on India to get it to impose secondary sanctions on Russian oil, but it didn’t work.

India changed its mind, and there has been no follow-through. Even the secondary sanctions that were attempted—insufficient and only from America, not from the whole West—haven’t been enforced.

Peeter: And then there’s the shadow fleet.

Dixon: If we get serious about oil sanctions, the shadow fleet becomes Russia’s only remaining route to move oil, apart from pipelines, and it will grow. But that’s actually fine—the shadow fleet is very inefficient.

We can require proof of insurance in every port, sanction insurers that cover vessels carrying Russian oil, and punish ports that let these ships in without reporting them. And if that doesn’t work, there are over a thousand of these ships on the seas—they could all be stopped by Western navies if we wanted to.

There will always be some Russian oil being sold to China. But the more oil Russia is left with, and the fewer buyers it has, the more deeply it will have to discount. The goal isn’t to stop every barrel—it’s to reduce Russia’s profit per barrel so deeply that the war becomes unaffordable.

Peeter: Beyond oil, what else is in the plan?

Dixon: Exports. There are enormous loopholes in what gets exported to Russia from the West. Enterprise software, IT infrastructure—SAP, the dominant business management software used by companies and governments across the world, and systems like it could be switched off, and by law should be.

We should not be supporting the infrastructure of the enemy. There is no logic in spending Western money to help Ukraine fight this war while simultaneously helping Russia build the economy that pays for it.

I call this the “duty to damage.” Just as American companies have a duty under the Foreign Corrupt Practices Act to ensure that employees and entities they control are not engaged in bribery, Western companies should have a duty to switch off their software in Russia.

Western governments should indemnify them for any legal risk. Remove their excuse entirely—if they’re told they’re covered, there’s no reason not to pull the plug.

Peeter: Okay. But what else could the West do?

Dixon: We should actively encourage the brain drain from Russia. Welcome qualified Russians who have no association with the regime and who want to live in a democratic country, not as a passive immigration policy—as an active economic destruction strategy.

Give them fast-track working visas. An economy needs clever people, and the fewer clever people in Russia, the better. It’s one more tornado in the perfect storm.

Peeter: Is there something Ukraine itself could or should do?

Dixon: Ukraine can make itself an investment hotspot. Western companies that have stayed out of Russia should get tax benefits to invest here, ideally matched by Western governments, so Ukraine doesn’t have to foot the bill.

And Ukraine should consider sanctioning—or, in the worst cases, expropriating—the assets of Western companies that are still operating in Russia while also doing business in Ukraine. You cannot call a company a sponsor of terrorism and then let it continue operating in your country. That makes no sense.

The frozen Russian assets—$300 billion held across Western jurisdictions, the largest chunk of it in Belgium—should obviously benefit Ukraine. That wouldn’t harm Russia directly right now, since Russia can’t access that money anyway. But that money in Ukraine’s hands, against a Russian economy that is struggling to finance the war? The indirect effect would be enormous.

Peeter: What about companies from other parts of the world—Japan, Türkiye, South America?

Dixon: India, Türkiye, and others have mostly stayed in. It’s talking to people with their ears closed—a very low return on effort.

We’ve focused on the largest companies in the world, the Fortune 200, because that’s the lowest-hanging fruit. From most of these countries, there are only one or two Fortune 200 companies, so the real challenge is the middle market, which is much harder to embarrass and investigate.

With Türkiye, it’s a case of attacking the trunk of the tree, not the leaves. Türkiye is a NATO member that is helping Russia while Russia threatens NATO. Until there are serious secondary sanctions against Türkiye at the government level that force it to decide which side it’s on, we’re never going to get Turkish middle-market companies out of Russia.

On Japan—the situation is complicated. Japan is the only G7 member that has not committed to a timeline to end Russian energy imports. The Sakhalin-2 LNG project alone supplies roughly 10% of Japan’s total gas imports, and some purchase agreements run into the 2030s. Tokyo says it wants to reduce dependence, but not immediately. Outside energy, though, Japan’s behavior has not been as bad.

Peeter: What about Belarus? Trump has been easing some sanctions, and since Belarus and Russia are in a customs union, that opens up access to Russia, too.

Dixon: I haven’t looked at it deeply, but in principle I’m against any relief for Belarus. It’s an evil regime and should be treated as such. And the broader point stands—we have to know who the enemy is and make their economies as weak as possible.

Trump likes to make deals. He learned it from real estate: you go in, you refuse, you walk out, and eventually you buy the building for 7% less than its value rather than 7% more. The problem is we shouldn’t be buying buildings from the wrong people at all.