US struggling to push bans on Russian companies: Report
The United States is facing a real problem in imposing tough sanctions on large Russian companies because of their extended dealings with American and European firms, a new report suggests.
Earlier this year, US President Donald Trump’s Treasury Department introduced new bans against Russian oligarch Oleg Deripaska and his companies as part of Washington’s punishment regime for Moscow’s alleged intervention in its Democratic process, among other reasons.
The sanctions seemed to be working at first, as they soon caused the shares of Deripaska’s large aluminum company, Rusal, to crash, slashing his fortune from a reported $6.7 billion to $3.4 billion, according to Forbes estimates.
However, the effects of the bans reached far beyond Russia, leading to a spike in global aluminum prices which in turn put a heavy strain on American and European companies that used the metal, The Washington Post reported Sunday.
The report went on to warn that unlike America’s sanctions against many other countries, Washington’s approach against Russia is much more likely to backfire because of the global market’s dependence on Russian products and services.
In Deripaska’s case, for example, the backlash from manufacturers and foreign governments was so overwhelming that the Treasury agreed to take a step back, giving more time to Western companies to end their dealings with Rusal and even offered to lift the sanctions if Deripaska gave up his company.
The US has so far imposed several rounds of sanction on Russian firms and individuals, accusing the government of Vladimir Putin of intervention in the Ukraine crisis, leading a cyber-attack campaign against American organizations and poisoning a former double-agent in the UK using a nerve agent.
After an initial ban on some US technology exports to Russia over the attack on Sergey Skripal and his daughter in Salisbury earlier this year, the latest sanctions include a second stage that could follow later this year with penalties including a ban on Russian airlines landing in the US.
The US Congress, meanwhile, is considering additional sanctions to punish what it calls Russia’s “aggression” against the US.
A bipartisan bill which is currently in the works is aiming to ban US investors from buying new shares of Russian government debt while also cutting some Russian banks’ access to US dollars, the report added.
The bill also includes measures against Russia’s energy sector, banning “companies from investing in crude-oil infrastructure inside Russia, or in large energy projects outside Russia if they involve a Russian state-controlled company.”
This would prove particularly harmful to European companies, making their investments in Russia-led energy projects such as the Nord Stream 2, a planned pipeline that would ship Russian natural gas to Germany, all the more complicated.
Washington should also consider the risks posed by Russia’s possible response before pushing ahead with more sanctions.
Russian lawmakers have warned that the aggressive US measures could force Moscow to halt exports of RD-180 rocket engines, which the United States uses to launch satellites to space.
Russian media have also predicted that Moscow would retaliate additional bans by charging US airlines more to use Russian airspace on their way to Asia.
Courtesy: Press TV