4 questions about the U.S. sanctions on Russia
Today, there was a big vote in the Russian parliament. Legislators in the State Duma, the lower house, voted 443-1 to annex Crimea. At the White House this morning, President Obama said the U.S. plans “to impose additional costs on Russia.” He announced another round of economic statements, indicating more sanctions could follow.
Q. Who do these sanctions affect?
The U.S. Department of the Treasury sanctioned a handful of individuals, most of whom President Vladimir Putin counts as friends and political allies. It also sanctioned the St. Petersburg-based Bank Rossiya.
President Obama also left the door open to sanctioning “key sectors of the Russian economy” in the future.
Q. That’s it? This seems like a pretty short list…
Well, it is. Simeon Kriesberg, an expert on sanctions at the law firm Mayer Brown, says that while the sanctions on individuals are largely symbolic, the sanction on Bank Rossiya “is quite significant.”
As a result, Kriesberg says, banks around the world may worry that a person or an institution with whom they do business could be a target in the near future.
“It has a chilling effect on commercial relationships that extend well beyond the specific targets that are announced,” Kriesberg says.
Q. Still, couldn’t the U.S. do more?
Yes, but so far, the U.S. government and its allies have decided that sanctions are the weapon they wish to wield.
Victor Comras, an attorney and consultant who deals with issues related to sanctions, terrorism, and money laundering, says that the Obama administration is “walking a tightrope,” because Russia economy is so important to the world economy.
“It’s going to be hard to find that sector of the Russian economy that is not going to have an impact on its trading partners in Western Europe, in Asia, and around the world,” he says.
Q. How did Russia react to the president’s announcement?
The Ministry of Foreign Affairs of the Russian Federation said that, “there should be no doubts – we will respond adequately to every hostile attack.”
Nine Americans are no longer able to travel to Russia: Speaker of the House John Boehner; Senate Majority Leader Harry Reid; Sen. John McCain (R-AZ); Sen. Robert Menendez (D-NJ), who chairs the U.S. Senate Committee on Foreign Relations; Sen. Mary Landrieu (D-LA); Sen. Dan Coates; Caroline Atkinson, deputy national security adviser for international economics; Daniel Pfeiffer, one of President Obama’s senior advisors; and Benjamin Rhodes, deputy national security adviser for strategic communication.
Sen. Menendez’s reaction to their reaction: “if standing up for the Ukrainian people, their freedom, their hard earned democracy, and sovereignty means I’m sanctioned by Putin, so be it.”
Senators McCain and Landrieu agree:
I’m proud to be sanctioned by Putin – I’ll never cease my efforts & dedication to freedom & independence of #Ukraine, which includes #Crimea
— John McCain (@SenJohnMcCain) March 20, 2014
I guess this means my spring break in Siberia is off, Gazprom stock is lost & secret bank account in Moscow is frozen http://t.co/TgwZneD4HY
— John McCain (@SenJohnMcCain) March 20, 2014
Being sanctioned by President Putin is a badge of honor. #SanctionedByPutin
— Senator Landrieu (@SenLandrieu) March 20, 2014
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