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August 3, 2018 www.intellinews.com I Page 2
US to impose “crushing” set of sanctions on Russia’s debt and oil
co-sponsors are three Republicans, including Arizona’s John McCain, and three Democrats.
Saenz urged caution in reacting to the bill, ar- guing that it was still only a draft and pointing out that the US Congress is now on its summer holiday so no work on the bill will happen until at least September.
Bill co-author Republican Senator Lindsey Gra- ham of South Carolina said the goal is to "impose crushing sanctions and other measures against Putin’s Russia until he ceases and desists med- dling in the US electoral process," stops cyber-at- tacks and removes Russia from Ukraine, accord- ing to a Bloomberg report.
The bill is also clearly intended as a rebuke to US President Donald Trump, who was widely criti- cised by US lawmakers, including many in the Republican party, for being soft on Putin during
a controversial summit in Helsinki last month.
The market reaction to the bill was swift with
the ruble falling just under 1% against the dollar while bond yields spiked to levels last seen in July 2017 after another round of sanctions was an- nounced, reports Bloomberg.
The bill would also impose new measures on oligarchs and political figures who are thought
to be close to Putin, including requiring the State Department to write another “Kremlin Report”. However, the public version of the last such report
was little more than a list of oligarchs, lifted from the Russian edition of Forbes magazine's rich list. This new report could go further and designate Russia as a state sponsor of terrorism.
That bill would impose stiff sanctions including on the energy and financial sectors if Dan Coats, the director of national intelligence, determines Russia is continuing to interfere in the US elec- toral process.
The Banking and Foreign Relations Committees are planning hearings in advance of legislation coming to the floor.
However, the US politicians are likely to tread lightly after they wreaked havoc on the metals market when the April 6 round of sanctions tar- geted oligarch Oleg Deripaska and his Rusal com- pany, and the US Treasury Department (USTD) had to climb down. Only this week the USTD post- poned again the need to comply with a sanction on doing any business with Deripaska or owned any of his companies’ shares and bonds.
One of the biggest questions is if Congress will target Russia’s state bonds. But the Treasury Department has already warned Congress against this as the bonds are widely held by international investors, and if the legislation is too strict a “dis- orderly exit” from the paper would cause chaos on international markets.
“The 'good' thing is that the bill – apparently – does not sanction traded Russian sovereign debt, which will protect the market and the RUB from what otherwise would have been a rather ugly, rapid and painful exit of investors,” Saenz said
a note emailed to clients. “However, sanctions against new issues of public debt will make life for Russia’s Minfin somewhat more difficult but still