The sanctions are not working. Today's economic report from Russia bears that out. The economy has been hit with 16,500 sanctions targeting energy, finance, defense, logistics, aviation. But it outperformed Europe and the United States in 2023, growing by 3.6%. Direct imports to Russia from Europe and the US obviously fell, but Russia has found new suppliers in Asia and the Middle East to fill the gap in imports. 10% of GDP is coming from war-related fiscal stimulus. The Polish foreign minister says the whole economy is now on a war footing.

Russia may have suffered over 350 casualties, both dead and wounded. But as we know, in dictatorship, human life is cheap. Putin has crushed dissidents, murdered Alexei Navalny, moved the country's economy to a war footing, boosted production of artillery shells, and around the clock, Russia has started building more factories and running its existing plants on triple shifts. During my last trip to Kyiv in December, Ukrainians described how the invaders were so much better equipped that they fired eight artillery rounds for every one that the Ukrainians can master. That's not a way to win.

Let's bring in Maxim Katz. He's an opposition activist and political strategist in Russia. He's here in the UK. I think, Maxim, I actually don't know where you are. Maybe we shouldn't probably say where you are. But let's talk about what we heard at the European Parliament today. Yulia said that Alexi's work will continue. Who carries the baton? Who is going to do that?

I think it's very good that she said that she will continue his work. It's very important because the Russian opposition will have a leader. We had some thoughts what we will do now because Alexi Navalny was leader of Russian opposition, but now she said that she will continue his work.

Yeah, but Alexi Navalny didn't just oppose Vladimir Putin, he exposed him. He lifted a lid on the corruption and the criminality. Are there those people within the movement who can show the Russian people what he's up to?

I think this process showing the Russian people is mostly is already done by Alexei Navalny. His movie about the palace that Putin built to himself has about 140 million views on YouTube, which is almost the same number as the population of Russia. So I think everybody knows that a Russian government is corrupted. The next steps are making a political action together. And The main struggle is to bring together at least the opposition and the people who oppose Putin to act, to make a political action together. I hope Yulia will be able to do that. I don't know, but I hope so.

One presumes that she won't be able to go to the funeral on Friday. What event is that going to be and what is the risk to those who attend?

We don't know this yet. The Russian government tried to do everything that it can, that this won't be a big public event. They tried to pressure the mother of Alexei Navalny, so she will agree to a quiet family funeral, some things like this. She didn't agree to that. I don't know yet what will happen there. Now, the Moscow police started to issue fines and even time in jail, like two weeks in jail for people who came to put flowers on the memorials. It in the day of death of Alexei Navalny, these things can happen also for those who will come to funeral, but we don't know yet.

That figure on our screens at the moment, the economy growing by 3.6%, I think that will surprise a lot of people. Her message today is that sanctions aren't working, the European parliamentarians are not doing enough. Why? Why are they not working?

This is a long conversation. To put it short, I think there is The sanctions have no goal, no strategy, and no plan. Europe and the Western countries try to, I don't know, hold accountable Russia and Putin and things like this, but there is no practical plan what these sanctions will do and how it will affect Russian economy. In consequences, the West continue to send huge amounts of money to Russia, to Putin. There is no sanctions on buying things from Russia, mostly not. Buying gas, buying oil. There There are some sanctions, but still huge amounts of money is flowing into Russia and Putin using this money for the war and for keeping his Russian economy running. In the other hand, no effort to make a brain drain from Russia is made because a lot of people want to leave Russia. It's very important people for Russian economy, but not a lot of effort is being done to offer to offer these people a possibility to exit Russia and live somewhere else. In my opinion, these sanctions has no firm strategy. No Western leader can say what is the strategy and what are the practical steps that these sanctions need to achieve.

Not the moral part of this story, not the internal politics part of the story to show your constituencies that you're tough on Russia. But the practical, how it will affect Russian economy, no, it was never discussed even in Even publicly.

Well, practically speaking, what they, of course, have to do is to stop the high tech equipment getting into Russia, which is being used to resupply the armed forces. There was a committee hearing yesterday before the Senate Arm Services Committee in Washington. A dossier handed over 211 American manufactured high tech products were used to kill Ukrainians on the battlefield. American components in them, major US companies, Intel, Texas Instruments, IBM, the chip manufacturer, AMD, all of their kit is getting to Russia. How is it getting there? Do they know it's getting there?

Yes, it is getting there because Russia has a lot of money. In the modern world and modern economy of 2024, you cannot stop things flowing anywhere if this plate have money to buy it. You can take as an example the war on drugs. Huge amount of money is a huge prison terms are given to those who are bringing drugs, for example, to the United States. But the drug is still flowing in because there are people who have money and want to buy them, and you cannot do nothing with this. The only thing you can do with this, in the case of Russia, is making sure that Putin You won't have this money. If you're sending him dollars and euros and buying gas and oil from him and other different stuff, he will be able to get this money, all this modern equipment, and you won't be able to do anything with it.

But the problem with that makes it... But the problem with that is he's finding alternative markets.

This is two things.

He's finding alternative markets to sell his oil and gas. There are Asian markets that he's turned to. We know, we've documented it on the BBC, that oil which comes out of Russia is refined in third countries and then shipped to Western markets. There are easy ways around the sanctions that are in place. What is the answer? Is it tough for penalties for oil companies, for high-tech companies, so that they do their own detective work to stop some of that materials going in?

I don't know the answer about that, but the way through India or through China is is much more complicated for Russia, and they get Rupees or Yuans for this and not euros and dollars, which must complicate the story to get it into Western equipment. So even if the US will stop the flow of dollars and euros, it will be a very big deal. A brain drain and money drain. This is two things that the West can do in terms of sanction Russia. Practical things, not moral things or big, big, important committees that will decide that will hold Russia on account. Two practical things, brain drain and money drain. This is two things that is possible to do and should be done. Then Putin won't have the money to buy this stuff, and then he won't have it.

Just a final one. The Commission President, Ursula von der Leyen, has said tonight that Europe should look very firmly at the money that is frozen in European banks and in Western banks. About €300 billion of Russian funds that are frozen. She says that should be used and converted to buy arms for Ukraine. You are a Russian opposed to the regime, but this is Russia's money which could do an awful lot of good in your country. How do you feel about that, the frozen assets that are in banks?

This money won't do any good to my country today if it will be in the hands of Putin. It can do some good in the future if Putin won't be in power in Russia. However, about this money, I don't know if it's practically possible to use it for something. But this is a whole different internal story of Europe and courts in Europe that I cannot comment on this because I don't know enough.

Maxim Katz, it's lovely to talk to you. Thank you very much for coming on the program this evening.

Thank you.

Around the world and across the UK, you're watching BBC News.