Serbia and Russia are lobbying frantically for a reprieve from U.S. sanctions on Serbia’s oil and gas company, NIS, which Washington targeted due to its majority Russian ownership. Belgrade and Moscow intend to send the U.S. Treasury Department a letter asking for an exemption, Serbian President Aleksandar Vucic announced on Monday. Days earlier, Belgrade adopted legislation removing legal roadblocks to the construction of a $500 million hotel tied to the Trump family.
The Trump administration must hold firm to its sanctions. In fact, Washington should take this opportunity to recalibrate its broader policy toward Serbia. For too long, Belgrade has received a free pass for limiting domestic political freedoms, sowing chaos throughout the Western Balkans, and cozying up to America’s enemies. It is time for that to end.
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The Western Balkans are the “soft underbelly” of Europe: countries with porous borders into the European Union and endemic struggles with crime, corruption, migration, and ethnic violence. Partly for those same reasons, the region is a hotbed for Russian and Chinese influence. It is in the U.S. interest to help the Balkan states become more stable and lawful and to minimize adversary influence there.
In that interest, Serbia has long found opportunity. Washington sees the country as “key to ensuring regional stability,” as noted in the 2022 U.S. Integrated Country Strategy for Serbia. Belgrade knows this. Accordingly, Serbia pays lip service to plans for reform while instigating conflict with its neighbors and putting off core issues blocking its bid for European Union accession. Washington and its European allies treat Serbia as a friend in the hope that it will one day become one.
Yet, Serbia is no friend of the United States. Serbia’s corrupt and repressive government has steadily gained control over the country’s media, branding the few remaining independent voices as “enemies.” Over the past year, the government has faced nearly continuous protests that began as an outcry over a collapsed building but have evolved into a nationwide movement demanding democratic reform.
Serbia has also bought weapons from Russia and China, amplified Russian propaganda, permitted Russians to train paramilitary groups within its bounds to destabilize Moldova, and provided alleged cover for Russian spies. Though some point to Serbia’s indirect supply of weapons to Ukraine as evidence of its changing heart, Belgrade has refused to join Western sanctions against Russia and facilitated continued financial flows into Russia. Serbia has also embraced Chinese investment and construction contracts, becoming an important European node in Beijing’s Belt and Road Initiative.
What’s more, for over three decades, Belgrade has fanned the flames of ethnic conflict in the Western Balkans with ideas of a pan-Slavic, Orthodox identity — invigorating proxies in Bosnia and Kosovo with dreams of a Greater Serbia and expanded Serb political control. In some instances, Washington has even pressured its regional partners to bend to Serb aims to keep the peace, as demonstrated by pressure put on Kosovo to make a deal with Serbia at its expense under the first Trump administration in 2020.
Belgrade’s bad behavior is not lost on Washington. But U.S. officials fear that taking too hard a line with Serbia, which traditionally balances between the East and West, would push the Balkan state into Moscow’s bear hug. As a result, the U.S. has approached Serbia with mixed messages and few real consequences.
Even as U.S. officials chide Belgrade for its destabilizing activity and democratic backsliding, successive administrations have given Serbian leaders little incentive to change. In 2021, the U.S. signed an Investment Incentive Agreement with Serbia. Earlier this year, Secretary of State Marco Rubio committed to a bilateral strategic dialogue to “deepen economic and security ties” between the two countries. The Trump family has proposed a $500 million hotel construction in Belgrade. The EU, meanwhile, recently announced over 100 million euros in new investments in Serbia, part of a broader plan to split 6 billion euros between six Western Balkan countries.
Serbia’s politicians presume that any U.S. pressure will be short-lived. That seems to have been Belgrade’s calculation after the U.S. imposed sanctions against NIS in January. Over the next 10 months, Washington issued a series of waivers delaying the sanctions to allow NIS to sell the stake held by Russia’s Gazprom Neft, yet the Serbian government dragged the U.S. along and would not mandate Russian divestment. But on Oct. 9, the Trump administration finally declined to renew the exemption, telling Belgrade that enough is enough.
That message should now animate Washington’s broader Serbia policy. The U.S. should be more aggressive in using sticks to punish Serbia’s bad behavior, while conditioning carrots on completion of tangible reforms.
To begin, the State Department must change its diplomatic posture regarding Serbia, signaling through its offices and programs that Serbia is a jurisdiction of concern and not a promising partner for the EU. This should include pressure on European partners to join U.S. sanctions on malign Serbian officials, such as Russia-linked politician Aleksandar Vulin, whom Washington designated for sanctions in 2023 for corruption, including in furtherance of ties to organized crime, drug sales, and arms smuggling.
The U.S. should consider extending Global Magnitsky sanctions to Serbian officials involved in the recent violent suppression of protests and years of endemic corruption. Power and money-hungry Serbian leaders are menaces to their people and U.S. interests, available for sale to Russia and China. Admitting an unreformed Serbia into the EU membership would pose a security threat to the bloc and trans-Atlantic relations.
Furthermore, the U.S. government should curtail evaluation of Serbia as a promising jurisdiction for investment, cutting off consideration of major critical minerals investments in Serbia until Belgrade delivers real progress on democratic reforms. Serbia should also not receive economic development assistance while actively undermining U.S. and Western priorities. Any ongoing security and reform support provided should be tailored to concrete U.S. priorities and tied to strict, consistent conditionality regarding use of the funding.
Throughout the Balkans, Washington must send a clear message: destabilizing actors will no longer get a free pass. If Serbia wants to join the Western world, it is welcome — after it develops a path to peace with its neighbors, cracks down on corruption, protects domestic rule of law, and joins Western sanctions on Russia. We can show Serbia a brighter way forward, but we will never convince the tiger to change its stripes by rewarding bad behavior.
Angela Howard is a research analyst at the Foundation for Defense of Democracies (FDD), where Ivana Stradner is a research fellow. For more insight, follow them on X @angela__howard; @ivanastradner.