US imposes sweeping sanctions on Russian business

The Trump administration has unveiled sweeping sanctions against seven high-profile Russian businessmen and their dozen companies, acting on a law passed by Congress last year.

Among the individuals targeted are billionaires Oleg Deripaska, Viktor Vekselberg, Suleiman Kerimov and Kirill Shamalov, who the US said is married to one of Vladimir Putin's daughters.

Businesses that have been targeted include Mr Deripaska's Basic Element and EN+.

Additionally, the administration targeted 17 Russian officials working for either the government or state-owned companies. Among those are Alexey Miller, chairman of Gazprom, and Andrey Kostin, head of state owned-VTB Bank.

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"The Russian government operates for the disproportionate benefit of oligarchs and government elites," said US treasury secretary Steven Mnuchin.

“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 destabilising activities.”

Alarm

Washington’s move is set to turn the apprehension that has permeated Russian business circles over new sanction risks into alarm that anybody with frequent interaction with the Russian leadership and a dominant position in Russian business could be hit.

A collection of names ranging from relatives of the presidential family and oligarchs to regional officials, the list is so broad that it looks random, and the treasury’s justification for the move is equally broad. Its argument that people benefiting from a regime engaging in “malign activity around the globe” are being punished for their government’s activities signals that the Trump administration is prepared to use the full scope of the Caatsa law.

A Trump administration official noted that the president had made clear on several occasions that the US sought “a better relationship with Russia”.

“The administration has been clear that the door to dialogue is open,” the official said.

The billionaires, who had been put under sanctions, had a chance to reverse that, the official said, by using their influence in Moscow to put pressure on the Kremlin, which had chosen “to repeatedly interfere in the democratic processes of us and our allies”.

“I think it’s important to see in today’s action a message, and that message is actions have consequence,” the official said.

The official added that the sanctions had been discussed with the EU, and that the US would work with the EU to mitigate any unintended consequences from the sanctions.

Multiple government officials said they were unable to clarify whether the sanctions would prohibit the designated Russian individuals from travelling to the US.

"It's largely the administration playing catch up and trying to show Congress that they're really serious about sanctions," said Andrew Weiss, a Russia expert at the Carnegie Endowment for International Peace. – Copyright The Financial Times Limited 2018