Russians worried new sanctions coming from Trump administration

Whatever Putin supposedly did to elect Donald Trump, it’s not paying off for him

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

(Forbes) – The Russians aren’t getting much from the Trump team. The latest: concern that a closed list of Russian individuals will be sanctioned by Treasury and shared with Europe as an official notice from Washington that conducting business with these people would be ill-advised. The sanctions are expected to be announced in February, according to a story in the Russian newspaper Izvestia published on Monday.

The article, titled “Washington’s Secret Sanctions,” cited Russian sources in D.C. saying a closed list of Russians would be shared with Europeans.

Izvestia was once a state-controlled media company. It was historically one of the official press organs of the Soviet Union. It is now owned by the National Media Group, a private holding company owned in part by billionaire steel magnate Alexey Mordahsev. 

The article was shared with the State Department on Tuesday. They did not comment on the likelihood for sanctions maintenance early next year.

From the translated article:

In the first weeks of February, the United States will announce the next package of sanctions against Russia, which will be much larger than all the previous ones. This is an addition to the federal law 3364 Countering America’s Adversaries Through Sanctions Act, adopted by Congress and approved by the President on August 2. Moreover, according to three informed sources of Izvestia in Washington…a closed list is being developed. According to him, Russian businessmen, public figures and citizens of the Russian Federation…can get on the closed list. The list will be distributed only among allies and partners in Europe.”

Anders Aslund, a senior fellow at The Atlantic Council, said he was one of a handful of people from Washington, D.C. think thanks sharing their recommendations for who should be added to the list. Aslund said estimates range from an additional 50 to as many as 200 people being added.

“Those are the numbers being raised by people that the government listens to,” Aslund says. “They don’t respond as to who will be added or not, but you can tell that more are being added soon. People we suggest should be added include some of the (construction tycoon Arkady) Rotenburg family members, and people who are holding wealth for (Vladimir) Putin based on the discoveries made in the Panama Papers. Those revelations have never been considered in the current sanctions.”


Washington will have to deal with Vladimir Putin for another six years. He is up for re-election in March with an approval rating unmatched by any politician in the West. (AP Photo/Pavel Golovkin, File)

The U.S. has had sanctions on Russia since 2014 following the annexation of Crimea, then owned by Ukraine. Sanctions were made extraterritorial this summer, affecting mostly Russian financial institutions and energy companies who are banned from interacting with U.S. companies in certain types of transactions and ventures. The sanctions also included Gazprom’s gas pipeline, Nord Stream II. The pipeline will run right alongside the already existing Nord Stream I that connects Russia to Germany via the Baltic Sea.

Some prominent figures are already sanctioned. Igor Sechin, CEO of Russian oil company Rosneft, is the most powerful executive on the list so far. Other senior executives of sanctioned companies may be added in February, if Sechin is any guide.

Being placed on an individual sanctions list means any U.S.-based assets are frozen. It often means the individuals are banned from traveling to the United States. Sanctioned executives are often toxic in business dealings. Exxon was fined $2 million for signing legal documents with Sechin this year. Exxon is suing Treasury over the decision.

Russia has begun preparing possible responses to the additional sanctions, Andrei Klimov, a Senator on Russia’s International Affairs Commission told the paper. According to him, Moscow is aware of the plans and will respond in kind. “All unfriendly actions of the U.S. will be met with exactly the same measures on the part of Russia,” Klimov said. Russia has responded to all U.S. sanctions with similar moves. Russia has not retaliated against extraterritorial sanctions at this time.

Russia’s government feels it is being isolated by Washington.

Trump put Russia and China on notice on Monday in his national security strategy, calling them political and economic rivals. It is unclear exactly who wrote Trump’s national security strategy, but the document mimicked the view of Russia held by National Security Advisor H.R. McMaster, saying that “Russia interferes in the domestic political affairs of countries around the world.”

If Russian businessmen are added to the sanctions list it will signal to Moscow a further attempt by Washington to pull it away from Europe. The U.S. is now seen as a potential competitor for Europe’s gas market. Moreover, it should signal to the market that the U.S. is not done with punishing Russia for its incursion into Ukraine and its perceived hacking of Hillary Clinton’s emails. The Russian government denies hacking the Democratic National Committee emails and sharing them with Wikileaks. SecureWorks, the subsidiary cybersecurity unit of Dell, said it found that Russian government computers were behind the hacked emails. The Clinton campaign says that the release of those emails damaged her shot at the presidency. The contents of those emails were never contested by the campaign.

Further sanctions on individuals also mean that Washington could move on sanctioning Russian bonds and the equities of sanctioned Russian companies like Gazprom, Rosneft, Lukoil, Sberbank and VTB Bank. Congress gave Treasury, State and the Director of National Intelligence six months to review whether sanctioning Russian securities were warranted under the existing law. That decision should be made by February.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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