September 29, 2017
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In “The New Russia Sanctions Law–What It Does and How to Make It Work,” authors Ambassador Daniel Fried, distinguished fellow at the Atlantic Council and former coordinator for sanctions policy at the US State Department, and Brian O’Toole, a nonresident senior fellow at the Atlantic Council, explain that Congress primarily adopted the law to block a unilateral lifting of sanctions, which was under consideration in the early days of the Trump administration. Fried and O’Toole add that, by passing the act, Congress was able to demonstrate its determination to resist Russian aggression in Ukraine and elsewhere and to penalize Russia for hacking the 2016 US presidential election. This paper includes an analysis of the law’s key sanctions provisions, suggestions to the administration about how to implement them, and key areas for the business community to watch, from two former US government officials who helped design and run US sanctions on Russia until earlier this year.

 

Key Recommendations:

>  Use the leverage of the existing Ukraine-related sanctions—now written into law—to push, along with our allies, for a diplomatic settlement for the Donbas that restores Ukraine’s sovereignty, making clear that the US government will, as it has committed, lift Donbas-related sanctions (not those related to Crimea) once a settlement is reached and implemented;
>  Use the slightly expanded cyber authority to pursue sanctions designations for malicious cyber activity by Russia, including activity aimed at undermining democratic institutions or governments;
>  Exercise caution in implementing some problematic authorities (and mandates), e.g., against governments purchasing Russian defense equipment and against investments or upkeep of energy pipelines, including gas pipelines;
>  Maintain flexibility in sanctions implementation for the US Treasury Department’s Office of Foreign Assets Control (OFAC), especially with respect to licensing, a critical tool in dealing with the unanticipated consequences of strong sanctions programs, and to delisting individuals and entities from sanctions lists; and
>  As the law directs, continue to work closely with Europe to maintain, enforce, and if needed intensify sanctions related to Ukraine. Also, explore with Europe potential new sanctions, especially in response to Russia’s use of cyber tools to interfere with elections and otherwise disrupt democratic institutions.  

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