Putin’s U.S. Virus Aid Flight May Have Carried Sanctioned Goods

(Bloomberg) --

Russian President Vladimir Putin’s shipment of medical equipment to help the U.S. fight the coronavirus epidemic may have contained a hidden message from the Kremlin.

Included in the aid appear to be ventilators produced by a firm under U.S. sanctions, according to video of the plane’s unloading at New York’s JFK airport posted by Russian state-owned news agency Ruptly.

Among the boxes were Avanta M ventilators, produced by a subsidiary of KRET, which has been on the Treasury’s Specially Designated Nationals list since 2014, when Russia annexed Crimea from Ukraine. RBC newspaper first reported the connection.

Even if the ventilators were not purchased directly from KRET, sanctions generally prevent importing anything that an SDN has a property interest in, according to Brian O’Toole, a former senior adviser in Treasury’s sanctions unit and now a senior fellow at the Atlantic Council.

“This is another example of Putin playing the U.S.,” O’Toole said by phone. “While there are no real consequences for the government violating its own sanctions, it looks stupid for them to be breaking their own rules.”

A spokeswoman for the KRET subsidiary, based near Yekaterinburg almost 900 miles east of Moscow, referred all questions to the Industry and Trade Ministry. The ministry did not respond to calls or an emailed query.

While the aid was billed as a humanitarian shipment, the cost of the shipment was split evenly between U.S. companies and the Kremlin’s sovereign wealth fund. The Russian Direct Investment Fund is subject to sectoral sanctions, which prohibit it from most borrowing in the U.S. but don’t prevent it from doing business with American entities.

Despite the tensions between Moscow and Washington, Putin and President Donald Trump enjoy a warm relationship. The leaders agreed on the aid during a March 30 phone call during which they also discussed the collapse of oil prices.

©2020 Bloomberg L.P.