August 2, 2019: More slaps on the wrist for Russia…

Today, pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act), the United States is announcing a second round of sanctions on Russia for its use of a “novichok” nerve agent in an attempt to assassinate Sergei Skripal and his daughter Yulia Skripal in the United Kingdom on March 4, 2018.  This act endangered thousands of lives in Salisbury and Amesbury, and caused the hospitalization of the Skripals, a British police officer, and two civilians, one of whom subsequently died from her exposure.

This second round will include:

  1. U.S. opposition to the extension of any loan or financial or technical assistance to Russia by international financial institutions, such as the World Bank or International Monetary Fund;

  2. A prohibition on U.S. banks from participating in the primary market for non-ruble denominated Russian sovereign debt and lending non-ruble denominated funds to the Russian government; and

  3. The addition of export licensing restrictions on Department of Commerce-controlled goods and technology.

As with the first round of sanctions, these measures will take effect following a 15-day Congressional notification period and thereafter remain in place for a minimum of 12 months.

It does not appear that the Trump Administration properly applied the sanctions. The CBW Act lists the following options for the second round of sanctions (3 must be chosen):















(A) MULTILATERAL DEVELOPMENT BANK ASSISTANCE- The United States Government shall oppose, in accordance with section 701 of the International Financial Institutions Act (22 U.S.C. 262d), the extension of any loan or financial or technical assistance to that country by international financial institutions.


 


(B) BANK LOANS- The United States Government shall prohibit any United States bank 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.


 


(C) FURTHER EXPORT RESTRICTIONS- The authorities of section 6 of the Export Administration Act of 1979 shall be used to prohibit exports to that country of all other goods and technology (excluding food and other agricultural commodities and products).


 


(D) IMPORT RESTRICTIONS- Restrictions shall be imposed on the importation into the United States of articles (which may include petroleum or any petroleum product) that are the growth, product, or manufacture of that country.


 


(E) DIPLOMATIC RELATIONS- The President shall use his constitutional authorities to downgrade or suspend diplomatic relations between the United States and the government of that country.


 


(F) LANDING RIGHTS- At the earliest practicable date, the United States Government shall terminate, consistent with international law, the authority of any air carrier which is controlled in fact by the government of that country to engage in air transportation (as defined in section 101(10) of the Federal Aviation Act of 1958 (49 U.S.C. App. 1301(10))).




While it is clear that the Trump Administration chose Options A and B, adding export licensing restrictions for controlled goods is not Option C (would US firms really export dual-use goods to a global adversary like Russia?). Clearly they are doing the absolute minimum to get Congress for passing legislation to address the situation.

Oh, and Treasury issued a press release, too:

Treasury Announces Sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act 

Washington– The U.S. Department of the Treasury announced today that it is implementing two sanctions on the Russian Federation as part of measures imposed by the U.S. government pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (“CBW Act”), in response to Russia’s use of the “Novichok” nerve agent in Salisbury, United Kingdom (UK) in March 2018.  This action follows the Department of State’s determination that the Government of the Russian Federation failed to comply with the conditions described in the CBW Act.  Treasury is imposing a prohibition related to certain U.S. bank loans and will oppose multilateral development bank assistance to the Russian Federation.  

To implement the sanction related to U.S. bank loans, Treasury’s Office of Foreign Assets Control (OFAC) is issuing a Russia-related Directive (the “CBW Act Directive”) under the Executive Order (E.O.) of August 1, 2019.  The CBW Act Directive prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian sovereign and also prohibits U.S. banks from lending non-ruble denominated funds to the Russian sovereign.  The CBW Act Directive will become effective on August 26, 2019, following a Congressional notification period required by the CBW Act.  OFAC is publishing a list of Frequently Asked Questions (FAQs) to provide guidance to the public on the CBW Act Directive. 

Treasury will also ensure that the U.S. Government’s existing policy of opposing multilateral development bank assistance to the Russian Federation remains permanently in place until Russia complies with the requirements of the CBW Act.

View the CBW Act Directive, FAQs, and information on today’s action.

Links:

State Department Press Release

CBW Act

Treasury Department Press Release

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s