Trump faces key deadline on Russia sanctions

The Trump administration is facing a key deadline on implementing sanctions against Russia for its election interference and other activities.

By the start of October, the administration is required to issue guidance on who is part of Russia’s defense and intelligence sectors. The individuals named will be targeted under a new sanctions law; the guidance will also determine what entities will be off-limits to U.S. and other businesses. 

The guidance will provide more clarity to lawmakers, businesses, and others on how Trump plans to apply the sanctions power. 

“The administration is going to need to be able to define this in a way that doesn’t kind of throw EU allies under the bus, doesn’t throw non-EU allies under the bus,” said Brian O’Toole, an economic sanctions expert who worked at the Treasury between 2009 and 2017, at Atlantic Council event in Washington on Friday.

{mosads}“It will be interesting to see how they scope this,” O’Toole said. “That will give us a lot more insight into how these sanctions are going to be applied.”

The guidance could reveal whether Trump plans to bring the full force of the sanctions law against Moscow or instead lessen the blow of penalties. 

“I think Congress wanted to give the administration flexibility to come up with an implementing plan,” said Peter Harrell, a former State Department official under Obama who worked on sanctions issues.  

“The question then becomes, will the Trump administration use the flexibility appropriately to deal with hard issues, or will they use the flexibility to really minimize the intended impact of the sanctions?”

Trump begrudgingly signed the Russia sanctions bill into law at the start of August after Congress passed it with a veto-proof majority. 

He slammed the bill, which restricts his ability to ease penalties on Moscow, as “seriously flawed” and said it contained “a number of clearly unconstitutional provisions.” 

While the law was intended to tie Trump’s hands, it also included language that gives the new administration leeway on defining the elements of Russia’s defense and intelligence sectors. 

It states that the new sanctions will be levied on individuals who knowingly engage in “significant” transactions with “a person that is part of, or operates for or on behalf of, the defense or intelligence sectors” of the Russian government, including Moscow’s main intelligence director, the GRU, and federal security service, the FSB.

The broad language, however, has left questions about what constitutes a “significant” transaction and what Russian entities are targeted by the new provision. 

Congress gave Trump 60 days to spell out what entities belong to Russia’s defense and intelligence sectors. 

Lawmakers likely provided the administration flexibility in order to deal with thorny issues related to arms sales, such as European Union and other allies purchasing weapon systems from Russia. 

Yet the broad language in the law worries some American businesses, especially those already operating in the Russian market.

“We want to see sanctions that reach their intended effect and that don’t simply cede market share to foreign companies,” Daniel Russell, president and CEO of the U.S.-Russia Business Council, said at the Atlantic Council on Friday. “We’d like to see that clarify be provided regarding the covered entities that primarily and directly constitute Russia’s defense and intelligence sector and specify the entities that aren’t covered.”

When signing the bill in August, Trump himself singled out the defense sector sanctions as being aimed at those who “negatively affect American companies and those of our allies.” 

Sanctions related to the provision go into effect in 180 days of the law’s enactment, or at the start of February. But Trump is also allowed to delay sanctions on parties if they are reducing the number of transactions with Russia’s intelligence or defense sectors. 

The White House did not return a request for comment on when to expect the guidance.  

Since Congress passed the legislation, tensions have flared between Moscow and Washington. Russia has expelled hundreds of U.S. diplomats in retaliation to the new penalties. Earlier this month, the Trump administration responded “in parity” by shuttering Moscow’s oldest consulate in the United States and two trade annexes. The moves drew furor from Russia, as well as threats of further repercussions.

Lawmakers in Washington, particularly Democrats, have been critical of Trump’s approach to Russia. Trump offered praise for Russian President Vladimir Putin on the campaign trail and, as president, has repeatedly expressed the desire to pursue warmer relations with Moscow. 

Trump has also at times cast doubt on the intelligence community’s conclusion that Russia interfered in the presidential election, though the president said he raised the issue repeatedly with Putin during a face-to-face meeting in July.

Trump’s position on Russia has also been seen in the context of the ongoing investigation into whether his campaign colluded with Moscow, spearheaded by special counsel Robert Mueller. 

But even those who have been critical of the president’s behavior with respect to Russia have welcomed the administration’s latest moves, which include the Justice Department requiring the American version of RT — Moscow’s state-run news outlet — to register as a foreign agent, meaning its content will be labeled Russian propaganda. 

“I think that we’re now seeing a much stronger pushback against Russian interference than in the last months of Obama’s administration and in the early months of the administration,” Dalibor Rohac, an expert on Europe at the American Enterprise Institute, told The Hill earlier this month.

Trump has also selected former Utah Gov. Jon Huntsman, a Republican, to serve as his ambassador to Russia. Huntsman was swiftly confirmed this week, earning bipartisan praise. 

“I don’t think the president could have selected a stronger person to be ambassador to Russia,” Sen. Ben Cardin (D-Md.), ranking member of the Foreign Relations Committee, told reporters on Thursday.

Trump’s choice to serve as the top U.S. diplomat overseeing European issues, who was also confirmed by the Senate on Thursday, has also committed to Congress to implement “the terms of this legislation as it was intended.”

“The tools that Congress has made available are very important tools for raising the costs vis-à-vis the Russian government,” Wess Mitchell, now assistant secretary of state for European and Eurasian affairs, said during his confirmation hearing on Sept. 19.

The law, known as the Countering America’s Adversaries Through Sanctions Act, passed Congress in July and also contains other deadlines for the administration with regards to Russia sanctions. 

By Oct.1, the Treasury Department must also modify existing directives limiting the amount of time U.S. banks can lend to Russian banks and to Russian energy companies. Those sanctions are related to Russia’s annexation of Ukraine’s Crimean peninsula in 2014.

By the start of November, the Treasury also must revise a directive that prohibits U.S. companies from providing technology and services to Russian arctic, deep water, and shale oil projects in Russia. The revision will expand the policy to projects that Russian companies have outside Russia. 

At some point, the administration must also decide whether to impose sanctions on individuals invested in Russian pipeline projects, such as the Nord Stream II natural gas pipeline. On the matter, the administration is required to coordinate with European allies.