The Primacy of Sanctions: An Assessment of U.S. Sanctions on Russia
Experts fear that relations between the two countries may turn into a phase of endless confrontation
MOSCOW – The reaction of the Russian political leadership to the adoption by the US Congress of the law on new sanctions against Russia first sounded from the parliamentary level: the chairmen of the international affairs committees of both chambers of the Russian parliament spoke loudly and angrily about the new restrictions.
In particular, the chairman of the Federation Council committee on international affairs, the former head of Rossotrudnichestvo, Konstantin Kosachev, called for a tough response to the new sanctions – albeit only after the law comes into force: “What to do? The first is not to fuss. Our official reaction should follow the law that has already come into force (which, alas, there is no doubt about, but still). The second is to prepare such a reaction, because there must be one. Not symmetrical, but painful for Americans. “.
Kosachev gives a pessimistic forecast for the further development of relations between Washington and Moscow: “Judging by the monolithic vote in the House of Representatives on the sanctions package against Russia, Iran and the DPRK, there will be no breakthrough, but also no normalization. Moreover, further degradation of bilateral cooperation is becoming inevitable, although there seems to be nowhere further “.
“And President Trump will not cope with his Congress” – the politician says.
Leonid Slutsky, chairman of a similar committee in the State Duma, also predicts a deterioration in relations: “Of course, expanded restrictions undermine the possibility of restoring Russian-American relations and complicate them even more for the foreseeable future. And the possibilities of diplomatic maneuvers to untie the Gordian knot in the Russian-US dialogue are reduced to an extremely small degree. “.
According to Slutsky, “sanctions, if the law is signed by US President Donald Trump, will become the most ambitious and complex, starting in 2014, and may affect not only Russian companies, but other countries that will cooperate with the Russian Federation, first of all, in such a wide area as energy “.
At the same time, the Kremlin’s reaction, which followed the parliamentary one, was much more restrained than the parliamentary one. Press Secretary of the Russian President Dmitry Peskov told reporters: “While we are talking about the bill, so we will not give any substantive assessments yet. In any case, the attitude to this will be formulated after careful analysis and the decision, of course, will be taken by the head of state, President Putin. “.
Reacting to the statements of Konstantin Kosachev and Leonid Slutsky, Peskov remarked: “I repeat once again – the President of the Russian Federation makes decisions in the field of foreign policy. And if and when such decisions are made, we will inform you “.
At the same time, the press secretary of the Russian president did not hide that the Kremlin was upset by this development of events: “Now we can say that the news is very sad from the point of view of Russian-American relations and the prospects for their development, and no less depressing from the point of view of international law and international trade relations “.
Vladislav Inozemtsev: Russian economy will feel new sanctions very quickly
Economist, member of the Scientific Council of the Russian International Affairs Council Vladislav Inozemtsev In an interview with the Russian service of the Voice of America, he outlined the main points of the Russian economy that could be hit by the new US sanctions: “This will undoubtedly hit transit routes, Nord Stream 2, and the development of deposits on Sakhalin and the shelf.
The Russian economy will very quickly feel these sanctions in terms of banking operations and financing, because the previous sanctions did not actually prohibit export-import financing, which is very often used in our country, for three to four months. Now, in fact, all this is limited to 60 days, that is, a period when formally it is even impossible to carry out a large export-import operation. As a matter of fact, no crediting for export from Russia will be possible. In addition, I think that this will undoubtedly affect a number of companies that have agreements on cooperation in the trade sphere. “.
Vladislav Inozemtsev expresses concern that the new sanctions could put the US-Russian relationship into a phase of a protracted conflict that will stretch for decades: “The completely underestimated effect of these sanctions is that they will undoubtedly throw the Russian leadership out of balance and self-control. We used to have a fairly clear understanding of cause and effect relationships. Yes, there was aggression against Ukraine, there was the seizure of Crimea, and there were consequences. In this case, the sanctions are much less clearly linked to some actions of Russia than before. “.
“A lot of what Russia is accused of, in general, is not very proven for the Russian leadership. Therefore, it seems to me that in this case in Moscow there is a feeling that whatever you do, the sanctions will continue anyway. And the very fact that they are apparently being introduced for at least several years, if not for decades, also shows that Russia, in general, is losing the motive to make any concessions and with something then agree. And it will go on virtually indefinitely. As a matter of fact, the second point worries me even more. In fact, we have embarked on a path when each of the parties, under some pretexts real or far-fetched, will more and more toughen actions against each other, “says Vladislav Inozemtsev.
Andrey Movchan: the document is very large, but it is not known whether it will actually be used
Economic Expert at the Carnegie Moscow Center Andrey Movchan doubts that the new US sanctions against Russia will have any effect: “There are many clarifications that change very little, many small things that seem to be able to do something if they really were used, but whether they will actually be used – no one knows. Because everything is left to the mercy of the president, or depends on agreements with European and other partners, or a special commission must make a decision. In general, all the novelty, by and large, boils down to the fact that the president is limited in the right to lift the sanctions. I haven’t seen any more significant things there yet. “.
According to the expert, the financial sphere of Russia will not suffer from the new measures: “In Russia, no one today needs this financing from American banks. We have 400 billion dollars in gold and foreign exchange reserves and 3 trillion rubles of extra money in the Central Bank. If some money needs to be raised, we will raise those pennies that need to be raised in the European and Eastern markets. In addition, companies that really should seriously use financing, such as Sovcomflot, have been removed from sanctions, moreover, taken out at the last moment with a firm hand..
So, too, I would not say that this is a big problem. The limits of personal sanctions are American banks and the territory of America, but our private individuals do not have very much property in America, this is not Europe. Yes, it all sounds good, this is a very large document, but I would not expect big problems either for Russian companies or for Russian citizens of any type. “.
However, Andrei Movchan admits that the sanctions will affect Russian citizens with incomes above the average: “Perhaps the biggest problem because of all this will be for the ordinary Russian middle class, which will try to keep half a million dollars in a Swiss bank, and now they will check five times stronger, because you never know what is there with the sanctions. Or some Russian small business somewhere in Germany, which immediately turns out to be on suspicion. “.
Alexander Konovalov: Putin will demonstrate “unbending will”
President of the Institute for Strategic Assessments Alexander Konovalov believes that, despite the restrained reaction of the Kremlin on Wednesday, they are in fact extremely disappointed with what is happening: “This is completely contrary to the interests of the Russian leadership. They were waiting for Trump with very different results. And now it is clear that it is not working. Although ours declare that there are areas, like the fight against terrorism, where we, apparently, should and can cooperate, but it seems to me that Russia will be very disappointed that the external conditions for it will change enormously. This means that you cannot take cheap money, short money, especially long money from international financial organizations. This has a lot of negative consequences for Russia “.
Alexander Konovalov emphasizes that Russia itself has complicated its position in the world lately: “Russia has been telling a lot of lies in the international arena on various occasions throughout the last period, starting from the Malaysian Boeing and ending with the fact that Siemens turbines are not Siemens at all, but bought in the secondary market and redone.
All this has a wave of consequences, and it is not very clear when you can get out of this situation. To some extent, this reminds me of the situation with the Jackson-Vanik amendment, which seemed to be introduced every time for a year, but existed for many decades, it existed longer than the Soviet Union existed. “.
At the same time, the expert believes that the Russian president will not make concessions: “I don’t think that Putin can afford to show that he somehow softens his position under the influence of such actions. His character and his psychotype speak of something else: he will demonstrate “unbending will”, especially since this is unlikely to somehow affect his personal well-being. But on Russia as a whole – with the deteriorating economic situation in the country, with political instability, this can be reflected very strongly “.
Reporter for the Russian Voice of America Service in Moscow. Collaborates with Voice of America since 2012. For a long time he worked as a correspondent and host of programs for the BBC Russian Service and Radio Liberty. Specialization – international relations, politics and legislation, human rights.
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