EXPLAINER: Why US sanctions may target individual Russians | Economic news


By FATIMA HUSSEIN, Associated Press

WASHINGTON (AP) — The White House and U.S. officials have threatened Russia with financial sanctions with “serious consequences” if it invades Ukraine, but so far many people have been the main targets of Western pain .

Experts say the United States and its allies are unlikely to agree to anything as drastic as a complete ban on trade with Russia or an embargo. On the contrary, industries and individuals will likely continue to bear the brunt of sanctions as the crisis deepens.

The Kremlin has ignored sanctions against Russian officials and business leaders imposed by the United States and its allies. Spokesman Dmitry Peskov said last week that members of Congress did not seem to notice that Russian law prohibits officials from having assets abroad.

The United States argues that those targeted lose substantial income and asset value due to financial sanctions that could curb, for example, an oligarch’s shopping sprees and investments.

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Geopolitics, Europe’s reliance on Russian natural gas, and Russia’s sheer size are some of the reasons that prevent the United States from subjecting Moscow to a more comprehensive embargo similar to what is being seen. in Cuba, North Korea and Iran.

An overview of how and why the West might choose to target sanctions on specific people or industries in Russia rather than expanding:

WHY ATTACK INDIVIDUALS RATHER THAN ORGANIZATIONS?

Sometimes the narrowest blow is intended to avoid inflicting unintended pain on ordinary people or causing action that will backfire on Western interests.

A recent Congressional Research Service report said that the United States and the European Union aimed to impose sanctions “in a way that could influence Russia to change its behavior while minimizing collateral damage to the Russian people and interests. economies of countries that impose sanctions”.

German leaders have promised that the future of the new Nord Stream 2 gas pipeline will be “on the table” if Russia acts against Ukraine. The pipeline was built to bring Russian natural gas directly to Germany, bypassing Ukraine. Blocking it would affect Russia’s gas exports to a crucial market.

WHO ARE THE PEOPLE TARGETED?

According to the CRS, several politically connected Russian billionaires and their companies are the target of sanctions. The Treasury Department’s Foreign Assets Control Service cited at least 445 people and businesses as “Specially Designated Nationals and Blocked Persons.” These are largely related to the destabilization of Ukraine, the diversion of assets and operations in Crimea, the Black Sea peninsula that Russia has seized. from Ukraine.

Among the targets are government officials and heads of state-owned enterprises, including Russia’s interior minister, directors of foreign intelligence and the federal penitentiary service, as well as the presidents of both houses of parliament. The CEOs of state oil and gas companies Rosneft and Gazprom, defense firm Rostec and several banks could also expect sanctions.

WHAT KIND OF SANCTIONS HAS THE UNITED STATES IMPOSED ON RUSSIANS IN THE PAST?

Western sanctions issued when Russia invaded and annexed Crimea in 2014 included limits on trade, freezing of assets under US jurisdiction, and limits on access to the US financial system, which are maintained to date on at least 735 individuals, entities and vessels, according to the Office of Foreign Assets Control.

Over the past year, the United States has imposed additional sanctions.

This month, the US Treasury sanctioned four people – two of whom are members of Ukraine’s parliament – ​​allegedly engaged in Russian government-directed activities designed to destabilize Ukraine. Last April, 16 individuals and entities were sanctioned for what Treasury Secretary Janet Yellen called “the start of a new US campaign against Russia’s malign behavior.”

White House press secretary Jen Psaki recently warned that Russian President Vladimir Putin and his top officials could face personal sanctions ‘far beyond what was done in 2014’ because of Crimea. .

HOW EFFECTIVE ARE SANCTIONS ON INDIVIDUALS?

Personal sanctions are nowhere near as effective as those against industries, which the administration is also considering. But they can inflict psychological pain and make targets international outcasts. For example, some Republicans in Congress want the United States to consider sanctioning Alina Kabaeva, an Olympic gold medalist in rhythmic gymnastics who is believed to be Putin’s girlfriend.

Assets held by Putin himself are difficult to target.

“His wealth is hidden all over the world and tracking these things is not easy. But it will make his life more difficult,” said Scheherazade Rehman, professor of international trade and international affairs at George University. Washington.

Asked last week whether Biden is keeping the door open to personal sanctions on Putin if Russia invades Ukraine, Peskov warned that such a move would be “politically destructive” to Russia’s ties with the United States. United.

U.S. sanctions on Russia can have broad economic effects if applied to economically important targets — and some programs do this by targeting both particular people and businesses and prohibiting certain types of transactions.

WHAT OTHER KINDS OF PENALTIES ARE IN THE US TOOLKIT?

Several federal agencies may also play a role in enforcing sanctions or restricting business activity. The Department of State can restrict visas and foreign aid, and the Department of Commerce can restrict licensing for commercial exports. The Department of Defense can restrict arms sales and the Department of Justice can prosecute those who violate export laws. Additionally, the Department of Homeland Security and the FBI may review visas issued for travel to the United States.

Associated Press writers Vladimir Isachenkov in Moscow and Aamer Madhani in Washington contributed to this report.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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