Up until 2013 Russia had exerted pressure on Ukraine, threatening to close its market to a variety of Ukrainian goods in an effort to bring Ukraine into Russian-led Eurasian integration. This attempt, however, failed due to the 2014 Euromaidan revolution in Ukraine. Russia retaliated by unilaterally introducing tariffs on imports from Ukraine, in violation of the CIS Free Trade Agreement. What followed was a fully-fledged trade war between the two countries.

Meanwhile, we need to analyze the economic processes of the so-called Donetsk & Lukhansk Peoples’s Republics separately from the bilateral economic relations between Russia and Ukraine because, as grey zones between the two countries, their situations are unique. Although DNR/LNR initially and oddly coexisted with the Ukrainian mainland, they were cut off from the Ukrainian economic space in the wake of the Donbass blockade. DNR/LNR became Vneshekonomservis’ turf, allowing the notorious oligarch of the Yanukovich regime Oleksandr Kurchenko to freely make money. However, as Russia started to have more direct control over the Donbass economy, Kurchenko was replaced by Yevgeniy Yurchenko, who was believed to be a more effective economic manager.