As Western economic sanctions plague the Russian economy, the Kremlin and its supporters scour the world for jurisdictions to use to evade sanctions. Moscow appears to have set its sights on the Western Balkans, long plagued by Russia’s corruption and malign influence. Washington and its Western allies must work to combat Russia’s illicit financial networks and its wider nefarious influence in the Western Balkans while expanding our own economic ties with the region.

Harnessing corruption in the Western Balkans is central to the Kremlin’s efforts to cultivate its influence in the region. This problem started decades ago. As former Yugoslav states liberalized their economies after the 1990s, rampant corruption revealed openings for Russian manipulation. Under Vladimir Putin, Moscow used the corrupt actors who took advantage of this kleptocracy to exploit the economic, ethnic and religious fissures in Balkan societies, in order to use this instability to challenge the United States and our allies. Western disengagement has compounded the problem, allowing Russia and China to fill the void through corruption and “debt trap” investments in critical areas such as energy and security.

This inattention could ultimately weaken the impact of Western sanctions against Russia. Serbia and Bosnia and Herzegovina, where Russian influence is particularly strong, have refused to sanction Russia. Serbian media reported in early April that nearly 300 Russian people, many in the IT sector, had opened businesses in Serbia since Moscow invaded Ukraine on February 24, likely reflecting an attempt to dodge Western sanctions by re-registering Russian companies in Serbia. And although Albania, Montenegro and others have developed sanctions regimes against Russia in line with EU sanctions, they may not be able or willing to enforce them if Moscow can prevail over their leadership through political pressure or corruption.

For a Biden administration that has declared fighting corruption and circumventing Russian sanctions to be top priorities, this should be a call to action. While the Kremlin has a head start, the West can use a combination of economic incentives and pressure to undermine Russia’s efforts in the Western Balkans. Washington and its European allies should take advantage of existing regional institutions to strengthen their political and economic influence. Together, Western allies should use sanctions to expose and disrupt illicit Russian financial schemes and discourage regional actors from working with Russia.

The new Open Balkan initiative represents the best opportunity for the West to create and effectively use economic leverage in the region. Created by Albania, North Macedonia and Serbia in 2021, the project aims to promote ties between the three countries by eventually creating a single market for goods, services and capital.

The Open Balkan initiative could allow the West to exploit its greatest advantage over Russia in the Western Balkans: economic clout. Europe’s economic ties with the region dwarf those of Russia, which are mainly concentrated in the energy sector. While Russia dominates Serbia’s energy industry, Russia is only Serbia’s fifth largest trading partner, behind Germany, Italy, Bosnia and Herzegovina and Romania. Russian trade with Albania, Bosnia and Herzegovina, North Macedonia, Croatia and Montenegro is also limited. By boosting Western investment in the region, using the Open Balkan initiative as an instrument to induce regional actors to adopt measures against corruption, money laundering and the rule of law, Washington and its allies could try to limit Russia’s influence.

While the concept behind the Open Balkan initiative is sound, the West needs to ensure that this potential asset does not turn into a long-term liability by perversely facilitating Russia and other illicit finance .

Unless properly controlled, a single market in the Western Balkans could create opportunities for Russian sanctions-busting networks and transnational criminal organizations to move Russian capital to and through regional economies. For these reasons, trade liberalization initiatives such as Open Balkan require strong institutions that can track and thwart illicit financial schemes involving Russia or other malign actors.

Western governments should couple the promise of economic opportunity with sustained pressure to strengthen the rule of law and defenses against illicit finance. Washington and its allies should also encourage Western companies to invest in the Western Balkans – but only if regional governments and their private sector counterparts meet both international anti-corruption and anti-money laundering standards and Western sanctions against Russia.

Along with these economic carrots, Washington and its allies should wield the stick. The West should threaten and, if necessary, impose sanctions against regional actors who continue to facilitate Russian illicit financing or other malicious Russian activities in violation of US sanctions against Moscow. Executive Order 14033, signed by President Biden in June 2021, offers an additional tool for the administration to do this, authorizing sanctions against those involved in corruption or undermining security or democracy in the Western Balkans. .

As Russia’s invasion of Ukraine continues, more Western sanctions are expected to follow. Russia’s cultural and political influence and economic presence in the Western Balkans offer the Kremlin a chance to establish one or more sanctions busting jurisdictions in central Europe. With a combination of carrots and sticks, the United States and its allies can foil Russia’s plans.

Ivana Stradner is an advisor to the Foundations for the Defense of Democracies (@FDD) and Matthew Zweig is a senior researcher at the FDD. FDD is a nonpartisan research institute focused on national security and foreign policy. Follow the authors on Twitter @ivanastradner and @MatthieuZweig1.