Russia/US politics: Quick View - US releases new Russia sanctions but declines to impose them

Content Type
Country Data and Maps
Institution
Economist Intelligence Unit
Abstract
No abstract is available.
Topic
International Relations, Politics, News Analysis, Forecast
Political Geography
Russia, United States

Event

On January 29th the US released two Russia-related reports and a new list of individuals and entities targeted by international financial sanctions as per the Countering America's Adversaries Through Sanctions Act (CAATSA) signed into law in August 2017.

Analysis

The new sanctions target businessmen and senior political figures close to the Russian government, as well as parastatal companies and persons engaging in transactions with the Russian intelligence or defence sectors. The report discusses the effects of expanding sanctions to include Russian sovereign debt and derivative products.

The prospect of the so-called "oligarchs list" had caused concern within business circles in Russia, as many feared that inclusion on the list would lead to subsequent sanctions. In reality, the unclassified report was banal. The list of oligarchs appeared to be taken directly from the 2017 Forbes Rich List (a list of wealthy individuals published by Forbes, a journal) and the list of political figures from the Kremlin website. Information on parastatal entities was kept classified. It is likely that the classified annex on businessmen includes meaningful information, such as an assessment of listed individuals' relations with the Russian president, Vladimir Putin, and the ruling elite. Anders Aslund, an expert on Russia matters who was consulted on suggestions for the list, stated on the website of the Atlantic Council, a think-tank, that someone "high up in the administration" had scrapped the expert-informed list and replaced it with the Forbes-based list instead

US legislation requires that the US president, Donald Trump, impose sanctions on anyone who "knowingly engages in a significant transaction with a person that is part of, or operates for or on behalf of, the defence or intelligence sectors" of the Russian government. Yet no new sanctions emerged as a result of the list, as the State Department suggested that existing measures "are deterring Russian defence sales". The report on the effects of expanding sanctions to include sovereign debt and derivative products was classified. However, a leaked US Treasury memo warned that sanctioning Russia's sovereign debt market could have knock-on effects of destabilising other financial markets. The outcome therefore reflected the difference of opinion on Russia that exists between the US administration and Congress.

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