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US expert warns new anti-Russian sanctions will damage American corporations

August 09, 21:17 UTC+3 MOSCOW

Un expert comments on the congressional bill on tightening the anti-Russian sanctions

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MOSCOW, August 9. /TASS/. The congressional bill on tightening the anti-Russian sanctions, which the US lawmakers have devised to punish Russia for the alleged election meddling, might turn out to be even more damaging for the US business interests than for the Russian ones, Richard Sawaya, the Vice-President of the National Foreign Trade Council [NFTC] warned in an article published by The Hill.

The bill titled ‘Defending Elections from Threats by Establishing Redlines [DETER] Act’ filed by senators Marco Rubio and Chris Van Hollen could "illustrate the law of unintended consequences", Sawaya wrote.

"[…] if enacted and implemented, the sanctions it contains would damage the U.S. economy and the legitimate interests of U.S. allies, while leaving the Kremlin unscathed," he indicated.

"The DETER Act would threaten to drive a wedge into an already-fragile U.S.-EU consensus on sanctions, destabilize the energy and financial markets and essentially ban American companies from Russia while leaving the door open to our Chinese or European competitors," the article said.

"Worst of all, it’s probable the self-inflicted damage to U.S. interests would eclipse the harm done to Russian interests […]," Sawaya said.

"Russian firms would suffer little more than they do under current sanctions while American companies would be forced to dismantle joint ventures, pull back on new projects, and take heavy financial losses," the expert warned.

Specifically Sawaya said provisions of the bill would embrace almost all the Russian government-owned companies, including some of the world’s biggest banking institutions and energy sector giants. One of them is the major natural gas producer, Gazprom, "the energy supplier to a large swath of Europe".

Sawaya voiced the apprehensions that retaliatory measures on the part of Moscow "[…] could make it politically toxic for European leaders to continue their united front with the U.S. on sanctions."

One more aftermath he underlined would be the legal forcing of US companies out of most joint ventures in Russia or with Russian partners.

"That means a Russian company buying a stake in a project anywhere in the world would effectively kick American companies out. Instead of helping the U.S., that gives Russian energy companies more control over projects and more political leverage," Sawaya said.

He singled out the possible aftereffects for the US oil corporations, which he said "would find themselves sitting on the sidelines," since Russian companies explore and operate some of the world’s most important oilfields.

"This effect would be felt across industries American companies would be unable to transport goods on Russian railroads, Boeing would be unable to partner with Russian airlines, and AT&T would be banned from making use of Russian telephone wires just to name a few, Sawaya wrote.

He stressed the absence of a proper response from the US Congress to the alarm bells rung by industry executives and analysts, adding that the Rubio/Van Hollen bill has a competitor now - the Defending American Security from Kremlin Aggression Act filed by senators Lindsey Graham and Robert Menendez.

The latter bill "takes the DETER Act’s damaging ideas to their logical extreme" - for instance, it would effectively ban the participation of US energy companies in any project anywhere in the world if Russian energy companies are engaged there.

This would force American companies "’[…] to divest from hundreds of energy projects across the globe while slapping unilateral sanctions on our own companies if they didn’t dump tens of billions of investments at a loss."

These warnings do not mean, however, that Richard Sawaya has reservations about the US policy of pressure through sanctions in general. He calls for more efficacious application of the Countering America’s Adversaries Through Sanctions Act [CAATSA], passed last summer "[…] with overwhelming bipartisan support, healthy input from industry and think tanks, and buy-in from European allies."

"Congress should focus on updating and enforcing these sanctions while incorporating new ideas from the Atlantic Council and others […]," the expert wrote.

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