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 administration has added 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?
More than 700 Russian people and companies have been targeted by 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 last August, for instance, penalized a handful of people and companies for doing business with a Russian undersea-diving company previously sanctioned for working with the government.
2. Why were the sanctions imposed?
The initial penalties 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. Last year, 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. Those restrictions were later eased, although personal sanctions on Deripaska remain. Other U.S. sanctions were aimed at punishing Putin’s government for a nerve-agent attack last year 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 two bipartisan proposals for new sanctions that seek to punish Putin for previous election interference or deter him from future meddling. The bills have gained little momentum in the Senate, where they were re-introduced in early 2019 after failing to become law in the previous Congress. One proposal, called the DASKA Act, would impose sanctions on Russian individuals, cyber operations and liquid natural gas export facilities and call for the president to “prescribe regulations” for sanctions on sovereign debt issued 90 days after the law is enacted. Another proposal, the DETER Act, would require U.S. intelligence officials to report on foreign interference within 60 days of a federal election, with possible punishments against Russian politicians, energy and defense. Sanctions could also extend to government and state-owned company bonds.
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. U.S. sanctions in April 2018 sent the ruble tumbling and roiled metals markets, leading Trump to boast, “Nobody has been tougher on Russia than I have.” But after then-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.
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. There’s also been collateral damage, felt outside Russia.
6. What sort of collateral damage?
The April 2018 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 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. Other Western powers have adopted similar measures. The U.K. pressed the EU to impose sanctions on Russia over the March 2018 nerve-agent attack in the town of Salisbury, which killed one British woman and put four people in the hospital.
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