Trump administration imposes new sanctions on Putin cronies

The US sanctions are designed to penalise some of Russia's richest industrialists, who are seen in the West as enriching themselves from Putin's increasingly authoritarian administration.
The US sanctions are designed to penalise some of Russia's richest industrialists, who are seen in the West as enriching themselves from Putin's increasingly authoritarian administration.PHOTO: AFP

WASHINGTON (NYTIMES, REUTERS) - The Trump administration imposed new sanctions on seven of Russia's richest men and 17 top government officials Friday (April 6) in the latest effort to punish President Vladimir Putin's inner circle for interference in the 2016 election and other Russian aggressions.

The sanctions are designed to penalise some of Russia's richest industrialists, who are seen in the West as enriching themselves from Putin's increasingly authoritarian administration.

They grow out of an oddly disjointed policy toward Russia on the part of the Trump administration: While President Donald Trump continues to call for good relations with Putin, Congress and much of the rest of the administration are pushing through increasingly punitive efforts that are sinking relations with Moscow to lows not seen in years.

"The Russian government operates for the disproportionate benefit of oligarchs and government elites," Treasury Secretary Steven Mnuchin said.

"Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government's destabilizing activities."

Among those sanctioned are Oleg V. Deripaska, an oligarch who once had close ties to Trump's former campaign manager, Paul Manafort.

Also sanctioned was Suleiman Kerimov, a financier close to Putin; Vladimir Bogdanov, a top executive of Surgutneftegaz, a Russian oil company; Igor Rotenberg, another oil executive; Kirill Shamalov, an energy executive who married Putin's daughter, Katerina Tikhonova; Andrei Skoch, a deputy of the Russian Federation's State Duma; and Viktor Vekselberg, chairman of the Renova Group, a Russian investment firm.

Senior administration officials declined to elaborate why Mr Putin himself was not directly targeted by the sanctions, but emphasised that several in the Russian leader’s inner circle were being targeted.

The sanctions have been under consideration for some time and were not imposed solely because of the recent poisoning in England but rather "in response to the totality of the Russian government's ongoing and increasingly brazen pattern of malign activity around the world," a senior administration official said in a conference call with reporters, adding: "But most importantly this is in response to Russia's continuing attack to subvert Western democracies."

Shares in some Russian companies targeted by the sanctions plummeted on Friday, but the broader market and rouble showed little reaction to the new round of geopolitical tensions.

Friday's sanctions could be particularly painful for Putin's regime.

While Russia's oligarchs make nearly all of their money in Russia, many stash their families, lovers and much of their wealth in places like London, New York and Miami.

Targeted sanctions against the oligarchs are seen as a particularly good way to punish Putin's aggressive moves while sparing wider Russian society, which is already suffering under Putin's thumb.

The sanctions come just three days after Lt. Gen. H.R. McMaster, in his final speech as Trump's national security adviser, warned darkly about the growing Russian menace.

"For too long some nations have looked the other way in the face of these threats," he said, adding: "And we have failed to impose sufficient costs."

The new sanctions grow out of legislation passed by Congress overwhelmingly last year and designed to limit Trump's ability to lift sanctions already imposed on Russia.

Lawmakers in both parties feared that the president would suspend sanctions imposed by President Barack Obama as he pursued warmer relations with Moscow as promised during his campaign and first year in office.

The Trump administration opposed that legislation but quietly acceded to it after it passed with a veto-proof majority.

Within that law was a measure requiring the administration to create a list of Russian oligarchs.

Lobbying around the creation of the list became intense as Russia's wealthiest citizens feared punishing sanctions to come.

That is exactly what happened Friday.

The sanctions list will only hasten the slide of Washington-Moscow relations. This week, 60 US diplomats left Russia as part of a tit-for-tat series of expulsions that followed the nerve-gas poisoning of Sergei V. Skripal, a former Russian double agent, and his daughter.

Skripal's poisoning on British soil prompted more than 20 countries to expel more than 100 Russian diplomats and intelligence officers, the largest such coordinated action ever.

British officials believe that Skripal's poisoning, which occurred after an assassin smeared a nerve agent on the door handle of his home, was such a risky operation that it is unlikely to have been undertaken without approval from the Kremlin.

Russia has denied involvement in the poisoning.

But the attack is seen as part of a pattern of increasingly aggressive moves by Putin, including the seizure of Crimea, military interventions in Georgia, Ukraine and Syria, tacit support for Syrian President Bashar Assad's chemical attacks on his own populace, a direct attack by Russian mercenaries on US troops in Syria and the hacking of elections in the United States and Europe.

The Trump administration's responses to Putin's needling have been uneven. Although Congress gave the State Department US$120 million in 2016 to counter Russian hacking efforts, the department has so far spent none of it. And Trump said this week that he wants US forces to leave Syria soon, an exit that would benefit Iran, Russia and its ally, Assad.

But the administration has also imposed considerable economic penalties on Russia, with Friday's action the latest in a string of similar moves.

NATO allies are now thinking anew about more coordinated responses to track and sanction Putin's cronies.

Both the British Parliament and the US Congress are considering legislation that would require that the owners of companies and properties be disclosed.

Hundreds of millions of dollars in property in cities like London, New York and Miami are estimated to be owned by Russian oligarchs, who use corporate shields and attorney to hide their identities.

The sanctions movement comes just as investigators working for Robert Mueller, the special counsel looking into the possibility of collusion between the Trump campaign and Russia, have begun to question Russian oligarchs about possible financial links between those in Putin's orbit and people close to Trump.