Report

New Russia Sanctions Target Putin Insiders

But Trump isn’t commenting.

Russia's President Vladimir Putin and Oleg Deripaska, CEO of UC Rusal, attend the APEC CEO Summit on Nov. 10, 2014 in Beijing, China. (Wang Zhao-Pool/Getty Imgaes)
Russia's President Vladimir Putin and Oleg Deripaska, CEO of UC Rusal, attend the APEC CEO Summit on Nov. 10, 2014 in Beijing, China. (Wang Zhao-Pool/Getty Imgaes)

On Friday, the Trump administration took its strongest swipe yet at Russia’s oligarchs, hitting seven Russian individuals and 12 companies they own or control with sanctions.

The sanctions come months after the Treasury Department issued an “oligarch list,” required under last summer’s Countering America’s Adversaries Through Sanctions Act. Those on the list weren’t automatically sanctioned, however. Instead, the list was meant in part to provide a road map for potential future sanctions that could crack down on President Vladimir Putin’s inner circle.

When the unclassified list was released in January, it was mocked for being ripped from the Kremlin’s website and Forbes magazine. The blatant cribbing led some to question how seriously U.S. President Donald Trump’s administration was taking Congress’s call for action against Russian aggression.

The Kremlin, for its part, greeted the oligarch list with bemusement. “As for my name, well, everybody’s name is there,” Kremlin spokesperson Dmitry Peskov said after the list was released.

On Thursday, in response to reports that the U.S. Treasury Department would actually be sanctioning individuals based on the list, Peskov said, “There are no oligarchs in Russia.”

The Treasury Department begged to differ, sanctioning individuals including Oleg Deripaska, who allegedly has ties to former Trump campaign aide Paul Manafort; Kirill Shamalov, who married Putin’s younger daughter in 2013; and Igor Rotenberg, who received assets from his father, Arkady Rotenberg. The elder Rotenberg, who was sanctioned back in 2014, sold his son 79 percent of Russian oil and gas company Gazprom Burenie. And while Arkady Rotenberg’s name appeared on the unclassified list back in January, Igor Rotenberg’s did not. “Which means it confirms that the classified list exists and we can use it,” Ambassador Daniel Fried, a distinguished fellow at the Atlantic Council and former U.S. State Department sanctions coordinator, tells Foreign Policy. “The pros in government were working at the right level.”

Seventeen government officials and a state-owned company and its subsidiary were also sanctioned.

“This is the most significant action since sectoral sanctions were tightened and added to in early fall 2014,” says Brian O’Toole, a nonresident senior fellow at the Atlantic Council and former senior advisor to the director of the Office of Foreign Assets Control.

The sanctions also hit Deripaska’s holding company, En+ Group, shares of which fell 20 percent after the punitive measures were announced. Shares in aluminum company Rusal, of which EN+ owns a controlling stake, fell more than 12 percent. The targeted sanctions “suggest to me that they’ve got it out for” Deripaska, says Elizabeth Rosenberg, a senior fellow and director of the Energy, Economics, and Security Program at the Center for a New American Security.

“These are the type of sanctions Congress had expected,” Max Bergmann, a senior fellow at the Center for American Progress and a former U.S. State Department official, tells FP.

The sanctions were met with support from those on both sides of the aisle seeking tougher measures against Putin. Republic Sen. Marco Rubio (Fla.), a Russia hawk, greeted the new measures with enthusiasm. “These new sanctions send a clear message to Vladimir Putin that the illegal occupation of Ukraine, support for the Assad regime’s war crimes, efforts to undermine Western democracies, and malicious cyberattacks will continue to result in severe consequences for him and those who empower him,” he said in a statement. “Congress authorized sanctions legislation to be used for precisely this purpose, and I commend the administration for taking action to levy these new designations,” Sen. Jeanne Shaheen (D-N.H.), who sits on the Senate Foreign Relations Committee, said.

Putin critics are likely to hope for even stronger measures going forward.

“No one would say that this is satisfactory to manage the array of U.S. concerns,” says Rosenberg. “There’s not very much in here about interference into elections,” though she notes that the sanctions are a muscular expression of U.S. policy and, unlike diplomatic withdrawals, very difficult to reverse.

More individuals and entities could still be sanctioned, or Congress could work with the Treasury Department to pass legislation on further protecting the transparency of the U.S. financial system. And while the Treasury Department issued the sanctions, Trump has, so far, stayed silent on the matter.

“This would all be even more powerful if Trump goes out to the press today or tweets or does something to talk about how bad Putin and Russia have been acting,” O’Toole says. “Completely irrespective of Trump’s waffling and inability to do the right thing, this ought to drive the final nail into the coffin of any hope the Kremlin has of using Trump” to shape the policy of the administration.

Update, April 6, 2018, 1:25 pm ET: This piece was updated to include comment from Ambassador Daniel Fried.

Emily Tamkin is a foreign affairs reporter at BuzzFeed. She was a staff writer at Foreign Policy from 2016-2018. @emilyctamkin

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