US sanctions Bill beyond realms of common sense, says Russia

Kremlin furious with move to increase penalties over alleged election interference

Russia stepped up its war of words against the US this week after politicians in Washington moved to tighten sanctions to punish Moscow for allegedly meddling in last year's presidential election.

The US House of Representatives approved a Bill on Tuesday that would pile more sanctions on Russia in a 419-3 vote that reflected widespread anger on Capitol Hill over the Kremlin's alleged interference in the US democratic process to help Donald Trump win the White House.

Before coming into legal force the Bill needs the green light from the Senate and the signature of Mr Trump.

But Russia’s foreign ministry went on the offensive hours after the vote, slamming US politicians for an action that went “beyond the realms of common sense”.


"The US had taken a very serious step towards destroying the possibility of normalising relations with Russia," Sergei Ryabkov, the Russian deputy foreign minister said.

"This is altogether sad from the point of view of Russian-American relations and prospects for their development," Dmitry Peskov, spokesman for the Russian president, Vladimir Putin, said. "And it's no less depressing from the point of view of international law and international trade relations."

Russia's economy is already dealing with lower oil prices and western sanctions first imposed in 2014 over its role in the Ukraine crisis.

The US Bill seeks to deepen the pain of the existing penalties by blocking major Russian companies’ access to long-term financing for projects that could give a stagnant economy a much-needed shot in the arm.

Other measures will prevent US and possibly European firms from investing in the construction and maintenance of pipelines that transport Russian oil and gas exports to market.

Expanded US sanctions are less of a danger to Russia than the potential reaction from European countries, said Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs. The "most unpleasant aspect" of the sanctions regime was the prospect of European companies withdrawing co-operation from Russia for fear of incurring penalties, he told the news agency Ria-Novosti.

The harsher US sanctions would "further the isolation of Russia from the West and further the stagnation of the Russian economy which has been the key theme playing out over the past few years," wrote Timothy Ash, emerging markets senior sovereign strategist at BlueBay Asset Management, the global fixed-income manager. "Whichever way you look at this, it's bad news for Russia."

Friendlier ties

Russia had hoped that Mr Trump, who called for friendlier ties between Washington and Moscow during the US election campaign last year, might be open to compromises that would allow for an easing of the sanctions over time. But the new US Bill deprives the US president of the right to lift the penalties without Congressional approval and looks set to ensure that the sanctions remain in place for a long time.

In a move that will likely be seen as an affront in Moscow, US politicians lumped Russia in the same basket as Iran and North Korea when drafting the Bill that is intended, as Paul Ryan, the speaker of the House of Representatives, put it this week, to "tighten the screws on our most dangerous adversaries and keep America safe".

Russian deputies reacted with fury to the sanctions Bill, calling for retaliatory measures against the US.

"The Americans tried to behave like a global policemen. But it didn't work and like a capricious child they take a toy, smash it and stamp their feet on the floor in hysterics," Konstantin Kosachyov, the head of the foreign relations committee at Soviet Federation, the upper chamber of the Russian parliament, wrote on the Echo Moskvy radio station's website. It was time for Russia to strike back with counter-sanctions that were "painful for the Americans", he said.

However, Mr Peskov said Mr Putin would wait until the US Bill was passed into law to react.

Mr Putin acted with uncharacteristic restraint late last year when the Obama administration, responding to allegations that the Kremlin had interfered in the US election, expelled 35 Russian diplomats and confiscated two properties in New York and Maryland that had been used by the Russian diplomatic mission. Instead of imposing tit-for-tat sanctions, the Russian president invited the children of US diplomats in Moscow to a New Year party around the Kremlin Christmas tree.

Mr Ash said Mr Putin may decide once again to refrain from retaliatory action against the US that could risk further damage to the Russian economy and alienate the Kremlin’s remaining allies in the Trump administration.

On the other hand, the Russian president is under pressure to demonstrate strength and could go on a surprise geopolitical offensive. Potential flash points where Moscow is already at loggerheads with the US include Ukraine, Syria, and North Korea.