Russia | The prospects of US lifting sanctions

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Russia | The prospects of US lifting sanctions

It is probable that the US will repeal some sanctions against Russia almost immediately after the president-elect, Donald Trump, takes office.

Public announcements by Trump suggest that he hopes to improve bilateral ties with Russia, at least in the near term. His ability to do so, and perhaps more importantly sustain good relations, is far from clear.

In the light of Trump’s business background and that of his cabinet appointments within his future administration, there is a high likelihood that the US will lift at least some of the sectoral sanctions that prevent trade with Russia in the financial, defence and energy sectors within a year. But in the immediate term, the president-elect is more likely to lift sanctions against Russian individuals than sectoral sanctions.

Trump’s nomination of Rex Tillerson, the CEO of ExxonMobil, as secretary of state is probably the strongest indication yet that he is seeking an improvement in relations with Moscow, at least in the economic and financial spheres. Tillerson has around 20 years of commercial experience working with Russia, where he has met with President Putin multiple times and dealt with the state oil company, Rosneft. Tillerson also questioned the efficacy of sectoral sanctions when they were implemented in 2014, as they prevented Exxon Mobil from carrying out a drilling project in the Russian Arctic.

As president, Trump will have the power to immediately retract all sanctions against Russia in relation to Moscow’s support to separatists in Ukraine and its annexation of Crimea. This is because these sanctions, unlike previous ones implemented in relation to Russia’s arms sales or violation of human rights, were passed by presidential decree rather than a congressional vote. Trump is unlikely, however, to retract all Ukraine-related sanctions at once.

Such a decision would put Trump at odds with other influential Republican officials. Many in Congress have criticised the Obama administration for not taking a strong enough stance against the Kremlin over the past two years, including in relation to recent Russian cyberattacks against the Democratic party during the presidential election. The US implemented new sanctions against Russian officials and entities this month in retaliation against the cyberattacks. As an example of the kind of opposition that Trump is likely to encounter within his own party, Senator John McCain said this month that he would join his Democratic counterparts in pushing for additional sanctions against Russia.

In the light of such polarising positions towards the Kremlin within the Republican party, and the current controversy about whether Russia has compromising material on the incoming president, Trump will be more likely to lift only some sanctions against Russian officials and individuals. These measures have not had any severe negative impact on the Russian economy. Trump could do this shortly after taking office. This would be a strong and symbolic gesture to overturn the confrontational policy adopted by the Obama administration towards Russia without conceding too much to Moscow.

Whatever Trump’s decisions when he takes office, any attempt to lift sanctions against Russia, even if only against individuals, will almost certainly further weaken EU unanimity on keeping sectoral sanctions in place throughout next year.

Image: US president-elect Donald Trump speaks at a press conference/ Van Tine Dennis/ABACA/ABACA USA/PA Images

Author: Risk Advisory’s Security Intelligence & Analysis Service
Published: 18th January 2017
Categories: Company News