How Not to Design Russia Sanctions

By Julia Ioffe

For months, Moscow waited for this report, churning with a mix of fear and preemptive righteous anger. The political and business elite knew that, on January 29, in order to comply with a sanctions bill Congress passed almost unanimously last July, the Trump administration would have to deliver to Congress a list of Russia’s “most significant senior foreign political figures and oligarchs … as determined by their closeness to the Russian regime and their net worth.” Also required was an “assessment of the relationship between individuals” and “President Vladimir Putin or other members of the Russian ruling elite,” and some measurement of their corruption. Together, these materials became known as the Kremlin Report, and they were intended to provide the basis for a possible new set of sanctions to punish Russia for election meddling and continued interference in Ukraine.

“Our embassy in Moscow says they’re consumed with this and that we should expect blowback,” said one administration source last week. Andrei Kostin, the head of the massive state-controlled Russian bank VTB, said that any new American sanctions on Russia would be “a declaration of war.” Stories in the Russian business press speculated about which people could possibly be on the list of oligarchs and political figures, and how many of them. One member of the Russian parliament even circulated his own list of Russians, hoping to preempt Washington’s.

Anticipating new sanctions, Putin responded to oligarchs’ December appeal to simplify the process of bringing money back to Russia. Banks began splitting off their defense-related branches into new entities in order to spare the mothership from sanctions. When reports revealed that Putin’s daughter Ekaterina separated from her husband, many speculated that it was a way of splitting up their assets to avoid sanctions. (Divorce is a popular way to …read more

Via:: The Atlantic

      

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