WASHINGTON -- U.S. President Donald Trump has imposed new sanctions on Russia for its alleged involvement in the March 2018 near-fatal nerve-agent attack on Sergei Skripal and his daughter in Britain, a move Moscow has called "regrettable," saying it will damage bilateral ties.
Trump signed an executive order on August 1 imposing a second set of sanctions against Moscow as mandated under the Chemical and Biological Weapons Control and Warfare Elimination (CBW) Act after Russia's involvement in the use of the nerve agent novichok in the attack was determined.
The new sanctions prevent U.S. banks “from making any loan or providing any credit to the government of that country, except for loans or credits for the purpose of purchasing food or other agricultural commodities or products,” the order said.
However, economists have said the new sanctions won’t have much of an impact as Russia has foreign currency and gold reserves exceeding $500 billion, precluding the need for borrowing.
“The sanctions themselves are relatively lenient and may prove the lesser of evils if they serve to prevent harsher sanctions against Russian sovereign debt, etc., that U.S. senators are trying to push through Congress,” Moscow-based Alfa Bank said in a statement.
Even if the new sanctions extended to state-owned companies like Sberbank and Gazprom, it would have minimal impact, said Elina Ribakova, a Russia economist at the Institute of International Finance, as U.S. bank lending to the country has already dried up.
The total amount of outstanding U.S. bank loans to Russian companies has fallen from $45 billion in 2013 -- before the Kremlin annexed Crimea, triggering the first round of sanctions -- to about $10 billion this year.
“It looks like the measures were chosen based on their harmlessness,” said Andrei Movchan, an economic policy analyst at the Carnegie Moscow Center.
In reaction to the announcement, Russian Deputy Foreign Minister Sergei Ryabkov said the U.S. decision appears linked to the 2020 presidential election, adding, "we were not surprised" by Washington’s move.
"I think that everything that is happening in relation to Russia must be considered in the context of the approaching election campaign in the United States. We are looking at it exactly from that perspective, and we are firm in our readiness to defend ourselves from the negative consequences of the U.S. sanctions," Ryabkov said.
The State Department determined in August 2018 that Russia violated the 1991 Chemical and Biological Weapons (CBW) Act in the Skripal case, and imposed a first round of sanctions targeting foreign aid, the sale of defense and security goods, and U.S. government loans for exports to Russia.
In his letter to both the speaker of the House of Representatives and president of the Senate, Trump said that his order was "pursuant to section 307…of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991."
The same 1991 law requires the president to impose a second round of sanctions if he cannot determine whether the country in question has stopped using chemical weapons within three months.
Moscow strongly denies it was behind the poisoning, which has added tension to already severely strained ties between Russia and the West.
The Skripal poisoning led to additional U.S. and European Union sanctions on Moscow and to diplomatic expulsions of Russian and Western officials.
Trump has lagged on putting the restrictive measures into force and has refrained from publicly criticizing Russian President Vladimir Putin.
Both spoke over the phone on July 31 and discussed the widespread forest fires in Russia and "trade between the two countries."
The president signed the executive order after a bipartisan letter sent to the White House earlier this week by leaders of the House Foreign Affairs Committee urged him to take action.
The letter said that "well over a year has passed since the [Skripal] attack," yet the "CBW Act mandated the second round of sanctions to be imposed within three months…Therefore we urge you to take immediate action to hold Russia accountable for its blatant use of a chemical weapon in Europe."