Politics

Easter Sanctions: US Sanctions Of Russian Oligarchs

US sanctions of Russian oligarchs
By DonkeyHotey (Vladimir Putin carrying his buddy Donald Trump) [CC BY-SA 2.0], via Wikimedia Commons
US sanctions of Russian oligarchs announced days ahead of Russian Easter. Friday, the Trump administration announced a fresh batch of sanctions on Russian oligarchs, businesses, and government officials, including billionaires and President Vladimir Putin’s son-in-law Kirill Shamalov. The sanctions target 38 individuals and businesses and cite Russia’s “malign activities around the globe” as the impetus behind the action.

Critics of President Trump, as well as those within his administration have said the US has not done enough to “impose sufficient costs” on Moscow, in the worlds of H.R. McMaster.

The Sanctions

The Treasury Department cites two executive orders signed by President Barack Obama in 2014 blocking the property of “persons contributing to the situation in Ukraine” as basis for the US sanctions of Russian oligarchs.

Administration officials have said the sanctions against Russian oligarchs is not in direct response to any one event, but rather a broad range of Russian activity around the globe including: the occupation of Crimea & violence in Eastern Ukraine, malicious cyber activities, and Moscow’s “continued attempts to subvert Western democracies.”

The Treasury Department also points to Moscow’s support of the Assad regime in Syria. Assad has been accused of using chemical warfare against civilians. The Treasury Department writes:

Russia has contributed to the instability of the Government of Syria through the sales and transfer of Russian-origin military equipment in support of Assad’s regime, enabling Assad to continue carrying out attacks against Syrian citizens. These attacks have included chemical weapons attacks, which claimed the lives of hundreds of Syrian citizens.

The Treasury Department also points to Russia’s alleged cyber attacks. Moscow has been blamed for the “NotPetya” cyber attacks, which targeted Ukraine, but spread to Australia, Europe, and the US. In February, the US and the UK announced they held Russia responsible for what has been called the most costly cyber attack in history. Russia refuted the accusations, claiming Russian computers were also infected with the malware.

The sanctions come weeks after the poisoning of the former double agent, Sergei Skripal in the UK, which lead to a worldwide diplomatic backlash against Russia with more than 100 Russian diplomats expelled from countries across the globe in response. Moscow denies involvement in the attack, but Skripal and his daughter were poisoned with the nerve agent, novichok, only known to be manufactured in Russia. The attack was the first of its kind in the UK since World War II and has been seen as a sign of an increasingly aggressive Putin.

This week, the Kremlin expelled 60 US diplomats from Russia in response.

Targeting the Energy Sector

The US sanctions of Russian oligarchs heavily target the energy and weapons sectors of the economy, but it is yet unclear what economic impact the sanctions will have. After Rusal, a Russian aluminum producer, was sanctioned, shares in the company went down 2.2%. Following the news of the sanctions, Russian Industry and Trade Minister Denis Manturov announced Russian state companies newly sanctioned by the US will receive government assistance.

The Russian Oligarchs

“The Russian government operates for the disproportionate benefit of oligarchs and government elites,” said Treasury Secretary Steven T. Mnuchin. The Treasury Secretary went on to explain:

The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities. Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.

Last month, Putin was re-elected as Russia’s president in an election many called a farce. Putin was widely expected to win reelection due to election fraud, ballot stuffing, and silencing of critics. Since the election, critics have been vocal in their condemnation of the Kremlin’s alleged intervention into the election, as well as the the oligarchs and billionaire elites who surround Putin.

Who is Sanctioned?

Those sanctioned include, “seven Russian oligarchs and 12 companies they own or control, 17 senior Russian government officials, and a state-owned Russian weapons trading company and its subsidiary, a Russian bank” according to the Treasury Department statement.

“Today’s action targets a number of… individuals… including those who benefit from the Putin regime and play a key role in advancing Russia’s malign activities.”

Members of Putin’s inner circle sanctioned include Kirill Shamalov, Suleiman Kerimov, Russia’s largest gold producer, and aluminum mogul Oleg Deripaska, who has ties to former Trump campaign manager Paul Manafort, have come under fire from US sanctions. Russian oligarchs and their illegal activity have been described in today’s Treasury Department press release.

The Treasury Department describes Shamalov’s elevation into “the ranks of the billionaire elite around Putin” after marrying Putin’s daughter Katerina Tikhonova in 2013. After the marriage, Shamalov leveraged his government contacts to acquire shares in Russian energy companies and a $1 billion loan from Russian state owned bank, Gazprombank, an entity already sanctioned by the US.

Oleg Deripaska has been sanctioned for his involvement in the energy sector of the Russian Federation. He is also said to be involved in intimidation of business rivals, illegal wiretapping, money laundering, extortion, and racketeering.

Other notable figures include Andrei Skoch who currently serves as a Deputy of the State Duma and formerly ran a criminal enterprise and Viktor Vekselberg, chairman of the Renova Group, an organization of asset management companies known for their work in the energy sector, as well as for bribing officials.

The sanctions also cover government officials including Alexey Dyumin, former head of the Special Operations Forces, “which played a key role in Russia’s purported annexation of Crimea.”

Including the new US sanctions of Russian oligarchs, the White House claims they have now sanctioned 189 individuals and entities related to “the Russian government’s ongoing and increasingly brazen pattern of malign activities across the world” according to an administration official.

This week reports circulated that President Trump had invited Putin to a meeting at the White House. Yuri Ushakov, Russian foreign policy adviser, said President Trump invited Putin during a phone call on March 20. He said Putin was inclined to accept the meeting. The White House has not confirmed these reports. It is unclear how the US sanctions of Russian oligarchs with affect the potential meeting.