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Opinion
March 8, 2019 www.intellinews.com I Page 20
COMMENT:
The DASKAA 2.0 sanctions – near-term lull, long-term discomfort
Gunter Deuber of Raiffeisen Research in Vienna
At the beginning of March, the US prolonged Ukraine-related sanctions against Russia for another year. More negative newsflow on sanctions is due in the coming months: A bipartisan group
of US senators tabled legislation on February 13 that could broaden and deepen the US sanctions regime on Russia. The senators heralded the Defending American Security Against Kremlin Aggression Act (DASKAA) 2.0 proposals as the “most radical measures yet.” The new draft legislation includes proposed sanctions on:
• Russian banks that support the undermining of democratic institutions in other countries;
• Russian LNG projects abroad;
• Russian state energy projects abroad;
• Support for Russian crude oil development;
• The Russian cyber sector;
• New Russian sovereign debt issuances;
(including debt issues by the Central Bank, the National Wealth Fund, the Ministry of Finance or agents or affiliates of any of these entities)
• Russian politicians, oligarchs and other individuals engaged in illegal state-sponsored activities;
• The Russian shipbuilding sector in the event that freedom of maritime navigation is violated (in response to the Kerch Strait incident).
The proposed sanctions, which still need to be approved by the US Congress and signed by the US President before they become law, are indeed
The new US DASKAA 2.0 sanctions will have little impact in the near-term,but in the long-term could cause stagnation.
broad in scope, continuing the mushrooming of the regime to disrupt Russian foreign policy more generally, rather than to simply deescalate the armed hostilities in Ukraine.
However, most of the DASKAA 2.0 proposals are not new; either they are already in place or have previously been discussed in one way or other. Furthermore, the proposals appear somewhat softer than those included in the original DASKAA package of August 2018, which was not implemented.
Specific banks to be targeted are not listed; the names of the banking majors, such as Sberbank and VTB, are not even mentioned, nor are options like freezing operations and assets explicitly mooted. Moreover, the means of proving that Russian banks are undermining democratic institutions is unclear. Based on these proposals, disruption to the handling of Russia’s external trade and $-transactions by its largest state- owned banks seems unlikely.
Major new economic sectors are also not included in the scope of DASKAA 2.0. The shipbuilding sector – the inclusion of, which is conditional in any case – is not significant in macroeconomic terms. Past precedent also suggests that mooting new sanctions is one thing, but the complex process of adoption is quite another (including certain phasing in 60-180 days afterwards).