The Bank of Canada has published a study that concludes that as not enough countries have joined the sanctions on Russia, it is more profitable to ignore sanctions than comply.

The study looked at what affect on a country non-adherence of third countries to the sanctions regime affects the sanctioning countries.

The study concluded if an insufficient number of countries support restrictive measures, Russia loses less, while those countries that are friendly are better off thanks to increased trade of goods that can be sold at higher prices.

“Our welfare analysis demonstrates that the sanctioned country’s welfare losses are significantly mitigated, and the sanctioning country’s losses are amplified, if the third country does not join the sanctions, but the third country benefits from not joining,” the study found.

To illustrate, the study’s calculations conclude that if a critical mass of countries were to join in restricting Russian gas purchases, Russia's GDP growth would decline by 9%. However, as long as only European countries comply with the measures, Russia's per capita GDP is reduced only by 4%.

At the same time, those countries facilitating the trade of sanctioned goods see substantial gains in their balance of trade. A raft of countries have seen their trade turnover with Russia explode in the last 18 months, including most of Central Asia, Turkey, China and even the Baltic states, which have become a gateway for goods to Russia. Despite the war with Georgia in 2008, today the small country in the Caucasus is more economically dependent on Russia than at any time since its independence thanks to booming trade.