No End in Sight for Russian Sanctions

The U.S. has moved to tighten the screws on the Russian economy and international standing with new sanctions taking aim at the country’s petroleum exports.

Recently announced State Department sanctions against Russia have come into force in response to the Novichok poisonings of Sergei and Yulia Skripal, with new ones on the way as the Treasury has declared that it is enacting retribution for defiance in the face of existing sanctions.

Treasury Imposes Sanctions

The Department of the Treasury listed a number of Russian bodies including two individuals, three companies, and six shipping vessels as targets for sanctions, meaning that their assets will be blocked and U.S. persons will be prohibited from dealing with them. The measures, which also target a Slovakia-based company, are being leveled as punishment for supplying petroleum to North Korea and assisting in the evasion of previous sanctions imposed by the U.S. and the U.N., according to department press releases.

Several targets were blacklisted for trying to circumvent sanctions imposed in June to limit Russian underwater and cyber infrastructure, such as telecommunication cables, routers and so on, that were thought to facilitate “disruptive cyber-attacks” against the U.S. Several of the companies and individuals are accused of acting on behalf of the company Divetechnoservices, which was listed in the June round.

“The Treasury Department is disrupting Russian efforts to circumvent our sanctions,” said Secretary of the Treasury Steven Mnuchin. “Today’s action against these deceptive actors is critical to ensure that the public is aware of the tactics undertaken by designated parties and that these actors remain blocked from the U.S. financial system.”

The chain of sanctions goes back a long way, and the move also echoes similar sanctions announced in April, which targeted 36 Russian oligarchs, government officials, and state-owned firms in response to “a range of malign activity around the globe.”

State Department Sanctions

The State Department also declared in August that it would impose sanctions against Russia in response to the country’s supposed use of the Novichok nerve agent to poison Sergei Skripal in the English town of Salisbury. Previous Liberty Nation articles have already pointed out that no evidence has been presented to prove that Russia was involved in the incident; nevertheless the first round of U.S. sanctions came into force on August 22, with a potential second round to come if Russia doesn’t provide assurance that it will cease its chemical attacks and submit to U.N. inspections.

As explained by LN’s Jeff Charles, “The initial step will be to limit exports and financing. This also includes denying licenses to export sensitive national security resources to Russia, which could halt millions of dollars of exports to the Kremlin.”

Despite the fact that the apparent victim of the attack hasn’t made any move to impose its own sanctions in response to the Skripal poisonings, British Foreign Minister Jeremy Hunt  has praised the “comprehensive” sanctions and encouraged the European Union to follow suit and "truly stand shoulder to shoulder with the U.S."

The Russian Reaction

The Russian economy is stagnating, according to the magazine World Finance. Sanctions have provided Putin with someone to blame, but have also contributed to problems by scaring off investors and restricting access to new technologies, says author Barclay Ballard. The World Bank predicts modest growth for the nation’s economy, at least in the short term.

According to RT, Russia has been stockpiling gold and reducing its holdings of U.S. debt, in order to mitigate the effect of sanctions. The Russian state media outlet stated that the country’s central bank “explained the strategy as part of diversifying the country’s reserves away from the US dollar,” as well as reducing legal and political risks amid predictions of further sanctions.

Meanwhile, President Putin has blamed U.S. Deep State, asserting that it is the establishment, and not Trump, who wields the real power in Washington D.C.

“It’s not only about the position of the US President. It’s about the position of the so-called establishment, which is ruling [the U.S.] in a broadest sense of the word,” he said. “As for our meeting with President Trump, I have a positive assessment of it and think that it was useful.”

He called the sanctions “counterproductive and senseless, especially regarding such country like Russia,” adding that he hoped “that the realization that this policy doesn’t have a future will someday come to our American partners and we’ll begin to cooperate in a normal manner.”

No End in Sight

Assistant Secretary of State for European and Eurasian Affairs, A. Wess Mitchell, recently told the Senate Foreign Relations Committee that the Trump administration has taken action, including “217 individuals and entities sanctioned, 6 diplomatic and consular facilities closed or kept closed, and 60 spies removed from U.S. soil.” He and The Honorable Marshall Billingslea of the Treasury Department outlined strategies for dealing with Russia including multilateral efforts, engagement with the private sector, engagement with foreign governments, public relations, and military strength.

Senate Majority Leader Mitch McConnell (R-KY) has hinted that further punishments could be leveled this September and October amid accusations that Russia is attempting to influence the midterm elections. According to Microsoft, Russia has attempted to hack conservative think tanks as well as congressional staff, while Facebook and Twitter claim to have foiled a social media campaign designed to manipulate voters.

While Russia may be able to look forward to “modest growth,” the continued application of sanctions appears to not only be wearing on the country’s economy, but also adding fuel for both Putin and U.S. officials to use each other as convenient straw men to blame for all and sundry.