All About the U.S. Sanctions Aimed at Putin's Russia
(Bloomberg) -- Even as U.S. President Donald Trump pursues his goal of better relations with Russia, his government continues to add sanctions targeting Russian government and businesses. Since 2014, the U.S. has imposed travel bans, asset freezes and finance and trade restrictions against hundreds of Russian individuals and companies, part of a multinational effort to punish President Vladimir Putin’s government for alleged trouble-making beyond its borders and online.
1. What U.S. sanctions are in place against Russia?
Almost 700 Russian people and companies are under U.S. sanctions. Individuals face limits on their travel and freezes on at least some of their assets, while some top Russian state banks and companies, including oil and gas giants, are effectively barred from getting financing through U.S. banks and markets. They include billionaires such as Oleg Deripaska and Viktor Vekselberg; close political allies of Putin including his former Chief of Staff Sergei Ivanov and Dmitry Rogozin, a deputy prime minister from 2011 to 2018; and corporate titans such as Rosneft PJSC, Gazprom PJSC, Sberbank PJSC and VTB Group. Not all targets are well-known. Sanctions announced on Aug. 21 penalized a handful of people and companies for doing business with a Russian undersea-diving company previously sanctioned for working with Russia’s government.
2. Why were the sanctions imposed?
The initial ones were ordered by Trump’s predecessor, Barack Obama, starting in 2014 after Russia annexed the Ukrainian peninsula of Crimea and supported a separatist uprising in eastern Ukraine. More were added after U.S. intelligence agencies concluded that Moscow interfered in the 2016 presidential election, won by Trump. In April, another round of measures in response to Russia’s “malign activity around the globe” hit Deripaska’s United Co. Rusal hardest, limiting its access to the $140 billion global aluminum industry. The latest U.S. sanctions aim to punish Putin’s government for the March 4 nerve-agent attack on former double agent Sergei Skripal and his daughter in the U.K.
3. Are more sanctions coming?
Perhaps. The U.S. Congress is weighing whether to propose broad new sanctions that would pressure Putin to cease any ongoing interference in U.S. elections. These proposed sanctions would target issues of new Russian sovereign debt -- a step the U.S. Treasury publicly opposed in February -- and prohibit transactions in all interests in property of major Russian banks, including Sberbank, VTB Bank, Gazprombank JSC, Promsvyazbank PJSC, Rosselkhozbank JSC and Vnesheconombank.
4. Where does Trump stand?
As a candidate in 2016, asked if he might recognize Crimea as Russian territory and lift U.S. sanctions, Trump replied, “We’ll be looking at that. Yeah, we’ll be looking.” That led Congress, as part of a 2017 package of expanded sanctions, to codify the measures into a law specifying that it could vote to block any move by Trump (or a future president) to loosen them. Trump called the legislation “seriously flawed” but signed it into law anyway. The U.S. sanctions in April sent the ruble tumbling and roiled metals markets, leading Trump to boast, “Nobody has been tougher on Russia than I have.” But after U.S. Ambassador to the United Nations Nikki Haley declared that new sanctions were forthcoming in response to Russia’s support of the Syrian government, Trump stepped in to squash the idea. Trump has also equivocated on whether he’s convinced that Russia interfered in the 2016 election.
5. What’s been the impact of the sanctions?
They’ve curtailed investment and Russian access to technology, hitting economic growth. Over the medium-term, western sanctions could cut the size of the economy by almost a 10th, according to the International Monetary Fund. While sliding oil prices also affected the currency in previous years, the ruble’s been the fifth worst global performer against the dollar so far in 2018, even as crude has recovered. The non-resident share in Russia’s domestic debt fell to 27.5 percent in July from 34.5 percent in March. There also is collateral damage, felt outside Russia.
6. What sort of collateral damage?
The April sanctions targeting Rusal initially disrupted the global supply chain for aluminum and sent prices soaring by 30 percent. That affected, among others, soda-can makers, the world’s biggest miners and big banks that finance the aluminum trade. Repercussions from sanctions have also been felt in the European Union. The Trump administration has threatened to sanction German and other European companies involved in Nord Stream 2, a planned natural gas pipeline under the Baltic Sea to Germany. Congress gave the Trump administration the right to target foreign investment in new Russian energy export pipelines.
7. Who else has sanctions on Russia?
The EU slapped sanctions on Russia’s financial, energy and defense sectors in response to the annexation of Crimea and in a bid -- unsuccessful so far -- to push Putin into a more conciliatory stance over the conflict in Ukraine. On July 5, the EU extended those sanctions for another six months. Other Western powers have adopted similar measures. The U.K. has pressed the EU to impose sanctions on Russia over the March nerve-agent attack in the town of Salisbury, which killed one British woman and put four people in the hospital.
The Reference Shelf
- The U.S. State Department lists the sanctions against Russia.
- Trump still leaves the door open to recognizing Russia’s grab of Crimea.
- The New World order, according to Trump and Putin.
- Putin and Trump have nothing to talk about, Bloomberg Opinion columnist Leonid Bershidsky writes.
- QuickTake explainers on sanctions as financial warfare, Russian gas and renewed U.S.-Russia tensions.
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