Thus, the president said, no action would be taken against those on the list, nor those doing business with the blacklisted entities according to a State Department spokesperson.
“Given the long timeframes generally associated with major defense deals, the results of this effort are only beginning to become apparent. From that perspective, if the law is working, sanctions on specific entities or individuals will not need to be imposed because the legislation is, in fact, serving as a deterrent,” the spokesperson said.
That said, the State Department also said that foreign governments and private sector entities are “on notice … that significant transactions with listed Russian entities will result in sanctions.”
The list was created pursuant to an August 2017 law requiring the Treasury and State Departments identify officials and oligarchs as determined by “their closeness to the Russian regime and their net worth” in order to penalize the Kremlin for its alleged meddling in the 2016 election. The law allows President Trump to postpone sanctions on people or entities if he determines they are in the process of reducing or ending their involvement with Russia’s defense or intelligence industries – as long as Congressional committees are notified every six months that that progress has been made.
Trump’s decision has already drawn criticism from opponents and Russia hawks, as the move could be determined as a handout to the country which helped Trump win the election – as that narrative goes.
“I’m fed up waiting for this administration to protect our country and our elections,” said Rep. Eliot Engel, the top Democrat on the House Foreign Affairs Committee, adding “They’ve now shown us they won’t act, so it’s time for Congress to do more.”
“The Trump administration had a decision to make whether they would follow the law and crack down on those responsible for attacking American democracy in 2016 … They chose instead to let Russia off the hook yet again. The State Department claims that the mere threat of sanctions will deter Russia’s aggressive behavior. How do you deter an attack that happened two years ago, and another that’s already underway? It just doesn’t make sense.” –Eliot Engel
Trump was reluctant to sign the August 17 legislation which called for the creation of the “corrupt oligarchs” list, as the new laws limit the President’s ability to undo sanctions imposed by the previous administration.
The president, who sought to change CAATSA while it was being written, sharply criticized the law while signing it in August.
“By limiting the executive’s flexibility, this bill makes it harder for the United States to strike good deals for the American people, and will drive China, Russia, and North Korea much closer together,” Trump said in a statement at the time.
The State spokesperson said Monday that some of the senior most State Department officials and other U.S. authorities have privately and publicly dangled the threat of sanctions over both foreign governments and other entities for their dealings with listed Russian entities. –The Hill
“Since the enactment of the CAATSA legislation, we estimate that foreign governments have abandoned planned or announced purchases of several billion dollars in Russian defense acquisitions,” said State Department spokeswoman Heather Nauert.
Trump’s decision on sanctions was being watched closely by Moscow on Monday, according to Eurasia Group director Alex Brideau. “Wealthy Russians are reported to be lobbying heavily in Washington, seeking legal advice regarding their foreign investments,” said Brideau, adding that they were “trying to distance themselves from the Kremlin.”
Amusingly, the Kremlin has pointed the the sanctions as a “direct and obvious attempt” by the United States to interfere with Russia’s upcoming presidential vote in March.
The VanEck Vectors Russia ETF (RSX) rose $0.29 (+1.24%) in premarket trading Tuesday. Year-to-date, RSX has gained 10.00%, versus a 6.68% rise in the benchmark S&P 500 index during the same period.
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