Economy & Business, Volume 12, 2018

Abstract: The sanction regime is a part of foreign policy toolbox, used when diplomacy fails and military options look too drastic. Policymakers have to consider very carefully its implementation as it can course economic damages for target economy and sanctioning one as well. The aim of the paper is to evaluate the impact of the Russian food ban and sanctions of the European Union on the agrarian sector and foreign trade of the Russian Federation and selected countries including different levels (local and regional) and viewpoint (trade flows, firms, and consumer attitudes). To process the paper we used secondary data from the European Statistical Office – EUROSTAT, the Russian Statistical Office – ROSSTAT and primary data based on interviewing managers of selected companies and consumers. We analyze the import and export between selected economies (Russian Federation, Visegrad countries with special focus on Slovak republic and some other European countries), and the impact of the imposition of sanctions or food embargo on business entities and consumer attitudes. However, we try to show both sides of food embargo and sanctions including positive impact on local development or trade creation in a newly formed regional group of countries benefiting from the situation. Since sanctions and embargoes also affect the end-user the part of the paper describes also questionnaire survey related to public opinion. Slovakia is a big critic of sanctions because in the period before the imposition of sanctions, the Russian Federation was one of Slovakia's largest trading partners outside the European Union. The total volume of exports from Slovakia to the Russian Federation had an impact on the overall state of the Slovak economy, which is reflected in the gross domestic product. In the paper we show also impact on individual businesses in Slovakia and other Visegrad countries, changes in their production structure and trade flows.