US says there is no need for new sanctions on Kremlin after several govts cancelled potential deals with Russian companies

Washington: World governments have cancelled billions of dollars in potential deals with Russian arms companies, the US government said on Monday, arguing there is no need for new sanctions to deter them.

But there was no immediate news from the US Treasury on a much-anticipated list of Russian oligarchs that American authorities regard as close to President Vladimir Putin and thus eligible for sanctions.

Representational image. AP

Representational image. AP

Monday was the deadline for the State Department and Treasury to comply with two provisions of the Countering America's Adversaries Through Sanctions Act, which President Donald Trump grudgingly signed in 2017.

US lawmakers had been worried that, in his eagerness to mend ties with Putin, Trump might not take tough action to punish Moscow and Russian officials for interfering in US elections and destabilising Ukraine.

The act, which Trump grumbled was "unconstitutional" and Secretary of State Rex Tillerson argued was not needed, obliged the State Department to draw up a list of firms with ties to Russia's defense and intelligence agencies.

It did so in October but on Monday was supposed to announce which US or foreign firms or governments would face sanctions for dealing with the blacklisted Russian security sector entities.

None of them, it turned out, as the State Department has determined that the mere threat of US action or secondary sanctions had deterred such transactions.

"Since the enactment of the CAATSA legislation, we estimate that foreign governments have abandoned planned or announced purchases of several billion dollars in Russian defense acquisitions," spokeswoman Heather Nauert said.

"Given the long timeframes generally associated with major defense deals, the results of this effort are only beginning to become apparent," she said, adding that Congress had been sent a report with classified details.

"From that perspective, if the law is working, sanctions on specific entities or individuals will not need to be imposed because the legislation is, in fact, serving as a deterrent."

But a bigger question mark hangs over the Treasury's oligarchs list, which could infuriate Putin and send shivers through his inner circle and Moscow's moneyed elite, threatening to cut them off from world finance.

This list too was due on 29 January, but there was no sign of it as dusk fell on Washington late on Monday.

According to the act, Treasury must identify "the most significant senior foreign political figures in the Russian Federation, as determined by their closeness to the Russian regime and their net worth."

And it must provide an "assessment of the relationship between individuals identified... and President Vladimir Putin or other members of the Russian ruling elite" and an "identification of any indices of corruption with respect to those individuals."


Updated Date: Jan 30, 2018 06:51 AM

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