All About the U.S. Sanctions Aimed at Putin’s Russia

Even as U.S. President Donald Trump pursued his goal of better relations with Russia, his administration added sanctions targeting Russian government and businesses. Since 2014, under Trump and his predecessor, Barack Obama, the U.S. has imposed travel bans, asset freezes and finance and trade restrictions against hundreds of Russian individuals and companies, part of a multinational effort to punish President Vladimir Putin’s government for alleged trouble-making beyond its borders and online. Still more sanctions are possible as the U.S. measures the damage inflicted by a broad computer hacking campaign thought to have been orchestrated by Putin’s government.

1. What U.S. sanctions are in place against Russia?

More than 700 Russian people and companies have been targeted by U.S. sanctions. Individuals face limits on their travel and freezes on at least some of their assets, while some top Russian state banks and companies, including oil and gas giants, are effectively barred from getting financing through U.S. banks and markets. They include billionaires such as Oleg Deripaska and Viktor Vekselberg; close political allies of Putin including his former Chief of Staff Sergei Ivanov and Dmitry Rogozin, a deputy prime minister from 2011 to 2018; and corporate titans such as Rosneft PJSC, Gazprom PJSC, Sberbank PJSC and VTB Group. Not all targets are well-known. Sanctions announced in August 2018, for instance, penalized a handful of people and companies for doing business with a Russian undersea-diving company previously sanctioned for working with the government.

2. Why were the sanctions imposed?

The initial penalties were ordered by Obama starting in 2014 after Russia annexed the Ukrainian peninsula of Crimea and supported a separatist uprising in eastern Ukraine. More were added after U.S. intelligence agencies concluded that Moscow interfered in the 2016 presidential election, won by Trump. In 2018, another round of measures in response to Russia’s “malign activity around the globe” hit Deripaska’s United Co. Rusal hardest, limiting its access to the $140 billion global aluminum industry. Those restrictions were later eased, although personal sanctions on Deripaska remained. Other U.S. sanctions were aimed at punishing Putin’s government for a 2018 nerve-agent attack on former double agent Sergei Skripal and his daughter in the U.K. There are sanctions against companies involved in building the Russian natural gas pipeline Nord Stream 2 as well.

3. What’s been the impact of the sanctions?

They’ve curtailed investment and Russian access to technology, hitting economic growth. “The sanctions have had an impact on Russia’s economic growth, though the exact amount is difficult to measure and a subject of debate,” and some sanctions “may not be felt for some time,” writes Steven Pifer, a former State Department official now with the Brookings Institution. He adds, “The Kremlin regularly pooh-poohs sanctions, but Russian officials miss no opportunity to call for their lifting.” Bloomberg Economics analyst Scott Johnson says Russia “has proved resilient, round after round,” though sanctions “have been a drag on investment and productivity.” The International Monetary Fund, in 2015, estimated that Western sanctions linked to the Ukraine crisis could end up costing Russia 9 percent of its gross domestic product. There’s also been collateral damage, felt outside Russia.

4. What sort of collateral damage?

The April 2018 sanctions targeting Rusal initially disrupted the global supply chain for aluminum and sent prices soaring by 30 percent. That affected, among others, soda-can makers, the world’s biggest miners and big banks that finance the aluminum trade.

5. Who else has sanctions on Russia?

The EU slapped sanctions on Russia’s financial, energy and defense sectors in response to the annexation of Crimea and in a bid — unsuccessful so far — to push Putin into a more conciliatory stance over the conflict in Ukraine. Other Western powers have adopted similar measures. The EU also blacklisted six Putin allies as punishment for the attempted murder of opposition leader Alexey Navalny.

For more articles like this, please visit us at bloomberg.com