When the Trump Administration recently started using the powers to sanction Russia that Congress overwhelmingly passed last summer, the popular press mostly got the story wrong. Focusing on Trump’s personal refusal to criticize Vladimir Putin, the gist too often was “too little” (more limits on what Russian fat-cats could spend in the US) and “too late” (after months of apparent foot-dragging). But the business press saw things differently. The Financial Times called the new sanctions “a game changer.” CNBC said “it’s becoming clear that Washington has hit [Russia] where it hurts.”
What were the other media missing? These sanctions are not just “primary”, they are also “secondary sanctions”. Because they include primary sanctions, US persons are forbidden to do business with the seven Russian oligarchs, 12 businesses and 17 government officials which were put on the Treasury’s Specially Designated Nationals (SDN) list on April 6, 2018 (call them the “Newly-Sanctioned Russians”); and any assets of those Russians located in the US are “frozen”, meaning mainly that they can’t be transferred or monetized in any way.
But the US has imposed primary sanctions in the past to little effect. By now imposing secondary sanctions as well, the Treasury Department has put the entire world on notice non-U.S. persons could face sanctions for “knowingly facilitating significant transactions” for or on behalf of the Newly-Sanctioned Russians. And that’s made all the difference.
My next post will explain how.