U.S. Vows ‘Severe’ Russia Sanctions for Using Banned Nerve Agent

(Bloomberg) -- The U.S. is working on a second, more punishing round of sanctions against Russia to be imposed in November for its nerve-agent attack in the U.K., a State Department official said.

“We plan to impose a very severe second round of sanctions,” Manisha Singh, the assistant secretary for the department’s Bureau of Economic and Business Affairs, told Congress on Thursday. She said it will include “banking sanctions, prohibition on procurement of defense articles, aid money -- it’s a laundry list of items that will penalize the Russian government.”

Russia hasn’t allowed on-site inspections or provided the U.S. with “verifiable reassurance” that it won’t use banned chemical weapons again, Singh said.

Members of Congress have complained President Donald Trump is too slow to impose penalties on Russia as he emphasizes improving relations with President Vladimir Putin. But administration witnesses appearing before the House Foreign Affairs Committee underscored the prospect of more strife -- and more sanctions -- over issues including any interference in November’s midterm elections.

Russia’s ruble pared earlier gains after the U.S. comments and was up 1.2 percent against the dollar at 68.2125 as of 9:49 p.m. in Moscow.

Sanctions are required under the 1991 Chemical and Biological Weapons Control and Warfare Elimination Act, which requires penalties on countries that use chemical weapons in violation of international law.

The U.S. last month announced new restrictions to punish Putin’s government for the March 4 nerve-agent attack on former spy Sergei Skripal and his daughter in the U.K. That first wave of sanctions took effect Aug. 22.

The initial round of sanctions limit exports to Russia of U.S. goods and technology considered sensitive on national security grounds, including electronics, lasers and some specialized oil and gas production technologies. The action could block hundreds of millions of dollars in exports. Waivers will be allowed for space-flight activities and U.S. foreign assistance, according to the State Department.

Russia, which has denied it was behind the attack in the U.K., has threatened to retaliate but stopped short of specific measures pending more detail on U.S. plans. The two Russians accused by the U.K. of carrying out the attack appeared on Russian state TV on Thursday to assert they were just tourists eager to see an ancient English cathedral.

A day after Trump announced an executive order generally threatening financial sanctions if foreign powers interfere in the coming elections, a Treasury Department official also applied that warning to Russia in particular. U.S. intelligence agencies found that Russia meddled in the 2016 election in an effort to hurt Democrat Hillary Clinton and ultimately to help elect Republican Trump.

“The message has been sent very clearly by the Treasury Department that there will be consequences and costs -- including personal costs -- imposed for the intolerable and unacceptable continued efforts to manipulate our electoral processes,” said Marshall Billingslea, the Treasury Department’s assistant secretary for terrorist financing and financial crimes. He also testified at the House committee hearing.

Congress is considering legislation that would make sanctions automatic, eliminating Trump’s ability to waive them. Billingslea said such “mandatory sanctions are not the way to go in our view.” He said financial penalties should be synchronized with diplomatic efforts.

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