The United States has unveiled the latest round of financial sanctions targeting Russian individuals, companies, and intelligence agencies -- a move billed by administration officials as sending a strong warning about Russian election meddling, malicious cyberactivity, and other actions.
“Treasury continues to pressure Russia for its ongoing efforts to destabilize Ukraine, occupy Crimea, meddle in elections, as well as for its endemic corruption and human rights abuses,” Treasury Secretary Steven Mnuchin said in a statement accompanying the announcement on March 15.
Accordingly, Russian officials expressed outrage and suggested retaliatory measures would be forthcoming.
In the U.S. Congress, the reception was mixed.
"Today's action, using authorities provided by Congress, is an important step by the administration," said Representative Ed Royce, the Republican chairman of the House Foreign Affairs Committee. “But more must be done.”
And Adam Schiff, the top Democrat on the House Intelligence Committee, which is investigating Russian activity in the United States, called the new measures “a grievous disappointment.”
And for some longtime watchers of U.S. policy toward Russia, the measures were something else altogether: nothing new.
In an interview with RFE/RL's Mike Eckel in Washington, Michael Carpenter, a former top Defense Department official overseeing Russia and Eurasia and a former foreign policy adviser to Vice President Joe Biden, says the law that Congress passed last year -- known as the Countering America’s Adversaries Through Sanctions Act, or CAATSA -- provided the administration with plenty of legal tools.
But, he says, it chose not to use them.
RFE/RL: What do you make of these measures announced today by the Treasury Department? Do they signal any sort of shift in policy for the Trump administration?
Michael Carpenter: I don’t think this indicates any sort of shift on the part of the administration in its Russia policy. In fact, I think it’s a calculated move to do as little as possible following the attempted assassination of the ex-Russian spy and his daughter in the U.K. and in response to the CAATSA law, while making it seem like the administration is moving forward but in fact is actually doing nothing.
I believe that the United States should use the enormous asymmetrical power that it has to impose real financial sanctions on Russia."-- Michael Carpenter
Most of these entities and individuals...were designated in December 2016 by the Obama administration. Re-designating them doesn’t impose any additional sanctions force. It achieves absolutely nothing except to appear that the Trump administration is doing something.
This is duplicating what were already weak sanctions to begin with. And when you designate Russian intelligence services, there’s no practical effect that flows from this. These entities don’t transact in the U.S. financial systems. They may transact covertly through shell companies and other types of front organizations, but this doesn’t really provide a whole lot new leverage to go after them.
To my mind, it’s much ado about nothing.
RFE/RL: Maybe CAATSA doesn’t provide enough authority in this regard?
Carpenter: CAATSA provides broad authority for the administration to impose sanctions on Russia defense, energy, intelligence, as well as financial sectors, as well as individuals. So CAATSA has the ability, in fact, to impose crippling sanctions on Russia should it choose to do so. These are the exact opposite of that. These are purely...these really aren’t new sanctions at all. These are sanctions that were announced by the Obama administration in 2016.
RFE/RL: What would you advocate the administration should be doing toward Russia?
Carpenter: I believe that the United States should use the enormous asymmetrical power that it has to impose real financial sanctions on Russia. What we’ve done so far is debt-and-equity restrictions on financial companies. That’s not the same at all as full blocking sanctions, like we’ve imposed on Iran and North Korea.
If we impose those types of what I call full blocking sanctions -- sanctions that prevent any transaction from occurring in the U.S. financial sector -- on a few Russian banks -- like two or three of the top banks -- it would have an immediate crippling effect on Russia’s economy.
The only bank we’ve designated with full blocking sanctions is Bank Rossyia, which is a small crony bank that at the time it was designated was the 26th largest bank in Russia and is really inconsequential.
We’re like a superpower that is afraid to look at its own shadow. I mean, we have enormous power at our disposal. We are either unaware, or are aware, and we are consciously limiting ourselves to things that have marginal, if any, impact at all.
RFE/RL: What do you make of the timing of the announcement, coming amid this furor over the poisoning of the former Russian double agent Sergei Skripal and his daughter in Britain?
Carpenter: I think it’s a conscious strategy to announce these in the context that the administration wants to appear that it is doing something. I think by taking the first step with these sanctions, it...will put forward the narrative that the U.S. is acting while others are considering what to do. But, in fact, that action amounts to nothing.
RFE/RL: What’s your opinion of what some have called the “nuclear option” -- cutting Russia off from the global interbank transfer system known as SWIFT?
Carpenter: Taking Russia out of the SWIFT interbank clearing system would potentially have a very devastating impact on Russia’s economy. It would also impact European economies. So we have to structure sanctions smartly so that we don’t create a new financial crisis in Europe.
Going immediately for what’s called the "nuclear option" -- the SWIFT option -- is foolish. It would hurt a lot of our European allies. There’s a way to do this where you can have a crippling effect on Russia’s economy without necessarily impacting the European economy, at least not in a systemic way. Perhaps here or there on the margins. And the way you do that is you go after a few Russian financial institutions, a few large parastatal companies, and then you can have a real impact.
But there’s no need to separate Russia from the world economy. That’s going too far.
RFE/RL: What about more tangible measures, such as a military option or expelling more diplomats?
Carpenter: Expelling diplomats does nothing. It’s a purely symbolic move. The diplomats can be backfilled...and then the other side simply retaliates in a tit-for-tat manner. And we’ve seen that. At the end of the day, you’ve achieved nothing. You’ve imposed no lasting consequence on your adversary that they haven’t been able to impose on you. [Persona non grata] is just a completely meaningless path.
What you could do is you could authorize a more permanent U.S. military presence on the eastern flank of NATO. That would be useful. That would be a cost for Russia’s aggressive behavior in North America and Europe. You could sanction Russian companies. We all know what the large Russian companies are. They operate globally -- primarily energy companies -- but there’s also some significant financial institutions.
If you apply full blocking sanctions -- not debt-and-equity restrictions; I want to make perfectly clear that there is a huge distinction between the two -- if you imposed full blocking sanctions on a handful of Russian companies, believe me you would catch Moscow’s attention.
