Sanctions could harm relations

WASHINGTON — Russia typically brushes off new U.S. sanctions. Not this time.

The Trump administration announcement of export restrictions in response to accusations Moscow used a nerve agent to poison a former Russian spy in Britain sent the ruble tumbling to a two-year low and drew a stern warning from its prime minister. While the initial sanctions may have a limited impact, a second batch expected within months could hit the Russian economy much harder and send already tense relations into a tailspin.

If sanctions are expanded even further to target Russia’s top state-controlled banks, freezing their dollar transactions — as proposed under legislation introduced in the Senate this month — it would amount to a “declaration of economic war,” Russian Prime Minister Dmitry Medvedev said Friday.

So much for President Donald Trump’s hopes for better relations with Moscow.

On his watch, the U.S. has imposed a slew of sanctions on Russia for human rights abuses, meddling in the U.S. election and Russian military aggression in Ukraine and Syria. For the most part, they have punished Russian officials and associates of President Vladimir Putin rather than targeting broad economic sectors.

In 2014, both the U.S. and European Union introduced sanctions that restricted Russia’s access to global financial markets and to equipment for new energy projects.

Those measures were punishing, but the sanctions announced by the Trump administration this past week could be even worse.

The restrictions were triggered under U.S. law on chemical weapons following a formal U.S. determination that Russia used the Novichok nerve agent to poison former Russian spy Sergei Skripal and his daughter in the English city of Salisbury in March.

The first tranche, due to take effect Aug. 22, will deny export licenses to Russia for the purchase of many items with national security implications.

Russia has 90 days to “provide assurances” that it will not use chemical weapons in the future and allow inspections. If Russia does not comply, Trump will be obligated to impose a second set of sanctions, applying restrictions on at least three from a menu of options: opposing multilateral bank assistance to Russia, broad restrictions on exports and imports, downgrading diplomatic relations, prohibiting air carrier landing rights and barring U.S. banks from making loans to the Russian government.

Senior Russian lawmaker Vyacheslav Nikonov said new sanctions may be inevitable and predicted it would pitch relations to new low. The relationship is already routinely described as at its worst since the Cold War.

Things could get even worse if the Defending American Security from Kremlin Aggression Act, which a bipartisan group of senators introduced Aug. 2, makes its way through Congress. It would target Russia’s state-controlled banks and freeze their operations in dollars, which would deal a heavy blow to the Russian economy.

Medvedev warned the U.S. that such a move would cross a red line and would warrant a Russian response by economic, political or “other means” he did not specify.

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