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U.S. Lawmakers Pass Russia 'Sanctions Bill From Hell'


Senator Lindsey Graham: “This strong vote indicates an overwhelming desire by the Senate as a whole to push back against Russian interference in our election and Putin’s misadventures throughout the world." (file photo)
Senator Lindsey Graham: “This strong vote indicates an overwhelming desire by the Senate as a whole to push back against Russian interference in our election and Putin’s misadventures throughout the world." (file photo)

WASHINGTON -- A U.S. Senate panel has passed a bill that is designed to punish Russia for its alleged interference in democratic processes abroad as well as “malign” actions in Syria and aggression against Ukraine.

The bipartisan bill -- described by Senator Lindsey Graham (Republican-South Carolina), who is a co-sponsor, as the "sanctions bill from hell" -- was approved 17-5 by the Senate Foreign Relations Committee on December 18.

“This strong vote indicates an overwhelming desire by the Senate as a whole to push back against Russian interference in our election and [Russian President Vladimir] Putin’s misadventures throughout the world," Graham said in a statement after the vote.

Senate Foreign Relations Committee Chairman Jim Risch, one of the five senators who voted against the Defending American Security From Kremlin Aggression Act (DASKA), said the bill is too broad and could have "unintended consequences" if it is passed in its current form.

"Sanctions must be carefully crafted or they create consequences that can unintentionally harm our European partners and allies, and divide the solidarity needed to push back on Russia," Risch (Republican-Idaho) said in a statement.

Grahamn said he is ready to work with senators "to improve" DASKA ahead of a floor vote, but reiterated that it "must be strong to be meaningful."

Senate Majority Leader Mitch McConnell will decide whether to bring DASKA for a full vote in the Senate. Doug Andres, a spokesman for McConnell, declined to comment on timing or where the senator stands on the bill.

McConnell, a Republican from Kentucky, stalled another Russian sanctions bill from coming to a floor vote this year. To become law, DASKA would need to pass both chambers of Congress and be signed by President Donald Trump.

Trump, who has pursued better relations with Russia, has been reluctant to impose more sanctions on Moscow. Democrats have complained that Trump has not fully implemented the Russia sanctions required under the Countering America's Adversaries Through Sanctions Act (CAATSA), which was passed in 2017.

First introduced in 2018, DASKA is the latest Russia-related legislation to be discussed on Capitol Hill in recent weeks as Congress wraps up unfinished business ahead of the holiday recess.

DASKA Details

DASKA targets new Russian sovereign debt, banks that support the Kremlin’s efforts to "undermine democratic institutions in other countries," individuals selling goods or services to the country’s oil industry, its cyberindustry, as well as figures close to Russian President Vladimir Putin.

Some analysts say its effects could be limited by steps Russia has taken to insulate its economy from the potential threat of sanctions that would prohibit U.S. persons from buying Russian sovereign debt.

Russia’s foreign exchange and gold reserves have climbed by nearly one-fifth over the past year to almost $550 billion. The country’s sovereign debt represents less than 20 percent of its gross domestic product -- a very low number compared with other major economies.

“This was so well telegraphed that it gave Russia time to prepare,” said Elina Ribakova, deputy chief economist at the Washington-based Institute of International Finance. “If the question is, 'Are we going to hurt Russia,' the answer is no.”

Russian banks have enough excess cash to buy up the nation’s sovereign debt held by foreigners, she said.

Analysts say the lack of a need for Russia to borrow in foreign currency undermined a Treasury Department decision earlier this year to prohibit U.S. banks from participating in new, non-ruble denominated Russian sovereign debt as punishment for the country’s alleged use of a banned nerve agent in an attack on former Russian spy Sergei Skripal and his daughter in Britain in March 2018.

High-profile Russians have also been repatriating money and assets held abroad to protect themselves from being targeted by sanction bills like DASKA.

The U.S. Chamber of Commerce, an influential pro-business group, urged the Senate committee not to back the bill in its current form, saying it will hurt U.S. companies that do business in Russia.

“While intended to impose constraints on the Russian government, the legislation would have little effect on its ability to secure funds in global markets -- given the Russian government’s strong foreign exchange and gold reserves -- while severely harming U.S. companies’ operations in Russia,” the organization said in a letter on December 17.

Nord Stream 2

Some analysts and U.S. lawmakers are also questioning whether sanctions against Russia’s $11 billion Nord Stream 2 gas pipeline to Germany will have any impact.

Lawmakers from both parties have been seeking to halt the project amid concern that the pipeline along the Baltic Sea floor will make Europe more dependent on Russian energy.

The Senate on December 17 passed the National Defense Authorization Act (NDAA), which contains a provision that would impose sanctions on companies helping to lay the pipeline. Trump is expected to sign the NDAA into law on December 20.

However, Nord Stream 2 is more than 80 percent complete. Senator Chris Murphy (Democrat-Connecticut), a member of the Senate Foreign Relations Committee, said earlier this month he was “doubtful” of the ability to stop the project.

Bloomberg News reported on December 17 that companies would have 30 days to "wind down" their work on Nord Stream 2, which would give them enough time to complete it.

Senators Ted Cruz (Republican-Texas) and Ron Johnson (Republican-Wisconsin) sent a letter on December 18 to Allseas, the company laying the last leg of the pipeline, warning it faces being slapped with sanctions if it completes the project.

"To be sure, there is a 30-day 'wind-down' period for which the president has the option of not imposing sanctions, but to exercise that option the president must certify to Congress that Allseas 'engaged in good-faith efforts to wind down operations.' Rushing to finish the Nord Stream 2 project over that time would foreclose the possibility of that certification," the senators said in their letter.

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    Todd Prince

    Todd Prince is a senior correspondent for RFE/RL based in Washington, D.C. He lived in Russia from 1999 to 2016, working as a reporter for Bloomberg News and an investment adviser for Merrill Lynch. He has traveled extensively around Russia, Ukraine, and Central Asia.

RFE/RL has been declared an "undesirable organization" by the Russian government.

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