Are Russia Sanctions Here to Stay?

Russian two-ruble coin and hundred-ruble note. Pixabay/Public domain

Or are they just a convenient extension of politics?

On May 25, the Center for the National Interest hosted a panel discussion of U.S. sanctions on Russia. The event was broadcast live on the National Interest’s Facebook page and can be viewed here.

Three leading experts concurred that while the U.S. sanctions regime on Russia lacks clear objectives, it will likely remain in place for the foreseeable future. While there seems to be growing interest in the U.S. Congress for expanding and codifying sanctions against Russia, European governments appear unlikely to support tighter sanctions and indeed may allow enforcement to erode in order to pursue their economic interests.

According to Kyle Parker, a senior professional staff member with the House Foreign Affairs Committee who has been deeply involved in U.S. sanctions policy toward Russia for many years, the current framework of sanctions on Russia rests on Executive Sanctions reliant upon annual renewals of the International Emergency Economic Powers Act (IEEPA) that authorize the president to regulate commerce after declaring a national emergency. The sanctions consist of “Crimea sanctions,” which are ill defined (there is a Crimea-specific Executive Order from December 2014 as well as earlier designations in March and April 2014); “general Ukraine sanctions” not related to Crimea that are understood to be coordinated with the European Union (EU) and linked to the Minsk Accords’ implementation; a cyber order amended late last year that imposed additional sanctions on Russia related to its election interference; “human rights sanctions” such as the Magnitsky Act; and a few other sanctions that are related to Syria and other issues but are not specifically targeting Russia. These sanctions are either SDNs (Specially Designated Nationals that target individuals) or SSIs (Sectoral Sanctions Identifications that address technology, energy, banking and other sectors). Congress also utilizes other tools that serve to sanction Russia, such as imposing limits on regular cooperation between the United States and Russia in the military sphere as well as blocking START renewal.

Parker said that with the exception of a few outliers, there is a “broad bipartisan consensus” within Congress on the Russia sanctions, and that Congress “generally likes them.” They give Congress a role in foreign policy and “appear to cost nothing,” which is especially important to House representatives amid budget cuts, he said. He described a general feeling in Congress that the sanctions should be strengthened and expanded, and members are worried that the sanctions could be removed, as they depend on the annual renewal of IEEPA and, therefore, could be allowed to lapse. However, the outgoing Obama administration extended them by a year to give the new administration some “breathing room,” he said. There has been some targeting of the sanctions in the past—linking them to human rights, cyber hacking and Ukraine, for example—but they are now grouped together to address the problem of “Russian aggression,” which may pose challenges to “disentangling” them and making them more effective, Parker said.

Parker asserted that the question in Congress is not whether the sanctions are working, but rather, “what else could we have done?” Many members of Congress feel that if the sanctions are not accomplishing the objectives, they should be strengthened. However, their objectives are not always clearly defined, Parker said. Congress, he argues, sees the Russian sanctions as “symbolically effective” because Russian government officials continue referring to them, which reinforces Congress’s belief in the sanctions’ utility. He referred to an unclassified State Department paper released in September 2016 (Measuring Smartness: Understanding the Economic Impact of Targeted Sanctions), saying that the average sanctioned or associated company loses one-third of its operating revenue, over one-half of its asset value and one-third of its employees relative to its unsanctioned peers; that sanctions have had a relatively smaller impact on the Russian economy than oil prices; and the EU has not suffered that much from sanctions or counter-sanctions. In fact, the report stated that the countries most supportive of the sanctions have also suffered the most from them.

Parker said that the chances of additional sanctions are “much greater than they were a couple of months ago” due to political developments in the United States. There is no hesitation among Democrats for additional sanctions, and some Republicans may join in as they seek “preemptive insurance” for themselves to hedge against what the Russia-related investigations might find, he said. Parker also asserted that the consensus within Congress is “pretty broad” and there is “not much really holding them back” except for a “few gatekeepers in leadership.” Things would move “very quickly” if relevant committees marked up a specific bill. Codification efforts, he added, vary in scope from a very narrow, reasonable codification of limited Crimea sanctions—most notably the Stand Up for Ukraine Act that passed the House last September—to the Russia Review Act, which would subject the whole sanctions regime to codification and imposes a “maximalist termination” that says Russia must cease violating any territorial integrity before sanctions can be lifted (meaning that so long as Russia remains in Crimea, the sanctions would stay in force). There are a few other bills that mirror Iran sanctions bills, but “if and when they move, they will change substantially,” he said.

Pages