January 22, 2019

The United States and Europe May Return to Common Sanctions Policies on Russia

By John Hughes:

In the past two years, the United States and European Union have diverged from their unified approach to Russia sanctions, exemplified by the close coordination on Ukraine beginning in 2014. However, in the year ahead there’s a chance that Washington and Brussels could advance common, if not coordinated, goals.

This divergence is partly a result of Russian activities beyond Ukraine that have impacted U.S. interests and partly a recognition by the United States that the EU is unlikely to be able to push through significant new sanctions given the need for unanimity among its member states.

For its part, in addition to 24 individuals and 18 entities related to Ukraine and Crimea, the United States has sanctioned a number of individuals and entities or imposed other restrictions pertaining to Russia’s cyber-related activities, use of chemical weapons in the Skripal attack in the United Kingdom, human rights abuses in Russia under the Magnitsky Act, and efforts by Russian middlemen to help North Korea circumvent sanctions. It has also implemented congressionally mandated sanctions on senior Russian officials and Russian oligarchs and the companies they own.

The EU’s future sanctions on Russia will be more modest, though there are still some overlapping areas between the United States and EU on the horizon related to common interests.

The EU, meanwhile, has limited its focus to maintaining its Ukraine-related sanctions. This includes periodically extending the mandate for Ukraine, Crimea, and sectoral sanctions, and sanctioning an additional 18 individuals and 9 companies for activities in Ukraine and Crimea since 2017.

This trend is unlikely to reverse anytime soon. The Trump administration announced on November 6 that it will impose additional sanctions against Russia for the Skripal poisoning. Though there is no specific deadline for action, this could include additional curbs on exports to Russia or restrictions on financing for the Russian government by U.S. banks, among other measures. The Trump administration has a fair amount of discretion and is likely to take a somewhat measured approach, though the November 24 Russian seizure of Ukrainian vessels in the Kerch Strait may strengthen the argument of those who wish to take a harder line.

The administration also must recommend possible new sanctions to the president by February, pursuant to the September 12, 2018, executive order on election interference, based on its analysis of the severity of Russian meddling in the November 2018 mid-term elections.

Finally, Congress may also introduce new sanctions in the coming months. This is not a certainty at the moment, but a new bill could draw elements from the Defending Elections against Trolls from Enemy Regimes (DETER) and Defending American Security from Kremlin Aggression (DASKA) bills introduced last year, including sanctions on additional Russian banks and further limits on energy activities with Russia, in addition to restrictions on Russian sovereign debt.

The EU’s future sanctions on Russia will be more modest, though there are still some overlapping areas between the United States and EU on the horizon related to common interests. Most importantly, the EU will likely extend its Ukraine-related sanctions. The transatlantic partners may also both implement new Ukraine-related sanctions on individuals and entities. They could also both undertake related, though not identical sanctions, for chemical-weapons attacks, including on individuals involved in the Skripal incident.

This commonality of policy would represent a unified transatlantic front toward action by Russia on European soil. It may be temporary, but is likely to offer modest political benefits to the United States and Europe by presenting a common rebuke to Russia’s incursions in Ukraine and brazen attacks on foreign soil.

John Hughes is a Senior Adjunct Fellow in the Energy, Economics, and Security program at the Center for a New American Security. He is also a Vice President at Albright Stonebridge Group, where he advises clients on market entry and expansion, government affairs, and managing regulatory issues, with a particular focus on European markets and sanctions issues.

Read the full CNAS "U.S. Strategies to Counter Russia" commentary series below:

Embedding Sanctions in U.S. Russia Strategy

Prospects for Transatlantic Cooperation on Russia Policy

Russian Domestic Politics and Greater Russia-China Cooperation

Russia’s Macroeconomic Vulnerabilities

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