Ex-coordinator of sanctions proposed strategy against Russia :: Economy :: RBC

Washington should enter against Russia additional sanctions, said at a hearing of the U.S. Senate. Former coordinator of sanctions policy, Department of state Daniel fried has proposed a comprehensive package of measures to increase pressure on Moscow

Photo: Oleg Yakovlev / RBC

Thursday, September 6, in the banking Committee of the U.S. Senate passed the second of three planned hearings to assess the effectiveness of anti-Russian sanctions and the prospect of introduction of new restrictive measures. Before the American senators were made by the former coordinator of sanctions policy of the Department of state (2013 to 2017) Daniel fried, former US Ambassador to Russia Michael McFaul, senior Vice President of the Washington-based Center for strategic and international studies Heather Conley and researcher of the Center for a new American security Rachel Satellite. Daniel fried in his speech and written statement (*.pdf) recommended that the White house and Congress is essentially a strategy to increase pressure on Moscow.

New sectoral sanctions

Restrictive measures can be strengthened in two areas, says fried: first, to strengthen sectoral sanctions against financial, energy, cybernetic industries as well as defense technologies and dual-use technologies; second, to impose additional sanctions against individuals, mainly from the inner circle of Russian President Vladimir Putin. “The strengthening of sanctions must be justified in response to specific malicious actions of Russia, but it should not play the role of General stimulus and to be due to the domestic political cycle in the United States,” said fried.

Daniel Fried

(Photo: Lee Jin-man / AP)

Acceptable option, in his opinion, may be new sanctions against Russian government debt, the ban on new funding for Russian state-owned companies on the part of Americans, the introduction of comprehensive sanctions in the form of blocking of assets and total excommunication from the American financial system some financial institutions (e.g., EBV). But as hard, blocking sanctions against the Russian largest state-owned banks is impractical, said fried, as it may lead to consequences contrary to the interests of both the US and the West.

In April, the U.S. Treasury imposed sanctions against seven Russian “oligarchs” and more than a dozen officials, as well as 14 companies, including UC Rusal and En+. In mid-August, the Congress published the draft law “On the protection of U.S. security from the aggression of the Kremlin” (DASKA), which prohibits transactions with the new sovereign debt, to which is attributed the debt of the seven Russian state-owned banks. The document, which is the hard version of the financial constraints all proposed, can be adopted in the autumn, allow the experts. In addition, in late August entered into force the approval of the state Department related to “business Skrypalia”, involving the termination of foreign assistance, arms supplies and financing for the purchase of weapons, the refusal of American state and ban export to Russia of goods and technologies sensitive from the point of view of national security of the United States. Russia has not yet responded to the measures of the United States.

Fried also urged the US administration to impose financial sanctions against structures, undertaking malicious actions in cyberspace and their sources of financing, and impose a ban on the export of cyber technologies. To strengthen export control, in his opinion, it is advisable to recreate the Coordinating Committee on export controls (COCOM, Coordinating Committee for Multilateral Export Controls), international organization established to control exports to the Soviet Union and other socialist countries. The structure has existed from 1949 to 1994.

In the case of strengthening sanctions against the Russian oil and gas sector of the US administration to focus the impact on future production (potential fields) and not to harm the existing mining facilities — otherwise the place of the American and European companies will come less “scrupulous contractors”, says fried. Sanctions against the pipeline “Nord stream-2” can cause a negative political reaction in Germany, which is a key conductor of European sanctions policy against Russia. The expert considers useful the ban on exports to Russia of complex technologies, including hydraulic fracturing and enhanced oil recovery of the reservoir in respect of new projects for exploration and production of hydrocarbons.

A blow to the President

As a tool for additional pressure fried suggested that restrictive measures against individuals from the “inner circle” of Vladimir Putin. “The inclusion in the sanctions list of persons from the “Kremlin report” will make them feel costs close relations with the Russian leader,” he says. However, such measures, according to Frida, should be preceded by careful preparation to avoid repetition of the situation with Oleg Deripaska, when the U.S. Treasury first imposed the most severe sanctions that are possible, but then they had to soften and offer the prospect of eliminating them.

How Russia wants to defend himself

The Russian security Council develops a master plan response to new US sanctions. Participate in the preparation of the Ministry of Finance, Ministry of economic development, Ministry of industry and trade, the Central Bank, Vnesheconombank, rostec, the industry monopoly. Among the discussed initiatives is the inclusion in the treaties of Russia with other States in the paragraph about the inadmissibility of the use of the norms of American law, priority purchases do not fall yet under the sanction of technologies, development of alternative international payment systems based on quantum technologies. Previously, the plan to reduce the impact of the sanctions was prepared by the Ministry of Finance, the Ministry also has a special Department for combating sanctions.

To counter Moscow it is advisable to finalize the new legislative initiative of the Congress, said fried, and promising measures he considers sanctions against corrupt officials and members of their families (bill DASKA), the prohibition of US citizens to buy new Russian debt (DASKA and other bills under consideration in Congress), the inclusion in the sanctions list of individuals or companies working in the cyber sector (DASKA), as well as disclosure of the beneficiaries of major deals with U.S. real estate, including Miami and new York city (SIALKOT). Action against corrupt officials and the real estate can be taken now, says fried.

However, fried has urged the U.S. administration to flexibility in the sanctions policy. “The United States must make it clear that they will lift sanctions if Russia changes its behavior,” suggests the expert. When you restore the sovereignty of Ukraine in the Donbass, “Ukrainian” sanctions should be lifted, while the “Crimean” sanctions should remain in force until the “de-occupation” of the Peninsula, he said.

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