U.S. Changes to Sanctions Don’t Offer Relief, Russia Says

The International Trade Practice Center on Bloomberg Law® provides in one comprehensive, time-saving resource.

By Natalia Suvorova

The Treasury Department’s decision to amend sanctions to allow certain U.S. technology goods to be exported to Russia is a “manifestation of pragmatism” rather than easing of restrictions, a Kremlin spokesman said.

“We do not tend to view this step as any kind of sanctions relief,” Kremlin spokesman Dmitry Peskov said during a phone call with media Feb. 3. “Rather, it is a manifestation of the American pragmatism,” particularly among Americans in the areas that would benefit from the revision. They “are not very fond of sanctions and tend to make the system more flexible,” Peskov said.

The Kremlin official’s comments came a day after the U.S. amended cyber-security sanctions initially imposed in 2015 against Russia to make exceptions that allow American companies that export information-technology products to be licensed by Russia’s Federal Security Service.

On Feb. 2, the Treasury’s Office of Foreign Assets Control posted on its website a general license “authorizing certain transactions with the Federal Security Service,” also known by the Russian acronym FSB. In addition to an executive order issued in April 2015, former President Barack Obama in December issued another order in response to the Russian government’s alleged cyber operations aimed at influencing the U.S. election.

The Treasury’s latest move was widely interpreted as a relief of sanctions against Russia. The White House denied any weakening of sanctions Feb. 2.

High Hopes

When Obama issued his December executive order, attorneys at Baker & McKenzie said the move could take a toll on certain U.S. companies and people doing business in Russia, largely because “the FSB performs certain administrative functions, such as review and approval of commercial encryption products for import and distribution in Russia.”

They also noted that then President-elect Donald Trump flagged an interest in improving relations with Russia and that the new administration might reverse the Obama order.

Many in Russia expect a thaw in relations between Moscow and Washington since Trump assumed office because of his warmer stance toward Russia.

The Feb. 2 measure by the U.S. government may signify that the Trump administration is testing the waters to see whether it is possible to find common ground with Russia, says Evgueni Volk, Doctor of Historical Sciences and former Coordinator of the Moscow office of Heritage Foundation. However, it is premature to talk about the political significance of this step, “particularly that no detailed discussion on the lifting of sanctions [between Russia and the US] has happened yet,” the analyst said.

To contact the reporter on this story: Natalia Suvorova in Moscow at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

For More Information

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request International Trade Practice Center on Bloomberg Law