Far-reaching U.S. sanctions on pro-Kremlin businesses; what are to be Putin’s response?

Fuad Muxtarlı Analysis 14 April 2018
Far-reaching U.S. sanctions on pro-Kremlin businesses; what are to be Putin’s response?

The U.S.-led coalition has been stepping up all-out pressure on Russia, using a variety of tools to minimize the Kremlin far-reaching ambitions both in the former Soviet space, in the Middle East and globally.

At the current stage, the West’s objectives are to deprive Russia of sabotaging it with energy resources and revenues from it to invest in the military industry for production of new weapons to balance possible crashes at the oil and gas markets.

Simultaneously, the West with the help of fresh sanctions aims to minimize gains of the Kremlin-backed companies at international stock exchange markets. And the latest sanctions list is namely calculated to restrict Russian businesses’ role and gradually reduce to the point when bankruptcies will trigger unemployment and social protests over the Kremlin policies at home.

In a nutshell, objectives of the West remain more or less the same with amendments emerging from new realities. Now the question is how far will the West go to bring the Kremlin to its knees and make it obedient? And will Moscow obey to the West’s growing pressure and not resort to nuclear weapons in the name of resuing itself?

In the meantime, as relations between the West and Russia hit a new low in the wake of the latest U.S. sanctions on seven Russian oligarchs and their companies with close ties to the Kremlin, President Vladimir Putin hopes "good sense will prevail" in the current tense international situation.

Addressing new ambassadors to Russia, Vladimir Putin worried about the state of affairs in the world, which, in his word “is becoming more and more chaotic”, hoping all the same that good sense will finally prevail. He urged all the sides to work hard to return international relations to a constructive course and make the whole global system more stable and predictable.

The Russian leader vowed Moscow will continue to advocate for strengthening global, regional security and stability and respect its international obligations. Russia will continue to consistently advocate the strengthening of global and regional security and stability, continue to rigorously comply with its international obligations, build cooperation with partners in a constructive, respectful manner, guided by international legal norms and the UN Charter.

On April 6, the U.S. slapped a host of fresh sanctions on seven Russian oligarchs, 12 companies that they own and 17 government officials up for various reasons; in all 38 people and entities. The blacklist came a week after the United States and two dozen other countries expelled about 150 Russian diplomats, alleged to be intelligence operatives, in retaliation for the nerve gas poisoning of a former Russian double agent Sergei Skripal and his daughter Yulia in Salisbury, southern England, on March 4.

The Kremlin initial move to the April 6 sanctions on Russian businessmen and officials was "outrageous".

The Kremlin spokesman Dmitry Peskov characterized it as quite outrageous from the point of legitimacy and one which tramples, so to say, on every possible norm.

Peskov assured that the Russian government is "doing everything possible to minimize negative consequences" of the U.S. measures. The situation is being studied, and only the interests of Russia are given priority. Peskov also said the Kremlin was closely following the situation on the stock markets, where shares in several Russian companies affected by the U.S. sanctions plunged early on 9 April.

State Duma Speaker Vyacheslav Volodin on April 11 urged the Russian government to directly retaliate in mirror-image to the US sanctions that impinge on the interests and capabilities of Russian businesses. It is time for Russia to respond to this “brazen behavior” by the United States, to the U.S.A. barefacedly lobbying its interests and creating obstacles to the operation of Russian businesses. The Duma Speaker said it was necessary to do exactly what the U.S. does against Russian manufacturers.

He advised not to make a mistake between decency and weakness and give the U.S. administration a good lesson to understand it. In his view, the U.S. government repeatedly violates international laws and the principles for the development of international trade and it is absolutely unacceptable for the Russian businessmen to be hit by sanctions.

Russian Prime Minister Dmitry Medvedev, for his turn, said the new U.S. sanctions on top Russian businessmen are an integral part of its "fight for markets", and promised a "well-calculated" response. This is not a fight against a specific representative of big businesses. We understand this... This is a fight for markets, this is a fight with the biggest suppliers of aluminum, nonferrous metals, the prime minister said, referring to the sanctioning of Russian tycoon Oleg Deripaska and his companies, including the aluminum giant Rusal.

On how Russia should react to the U.S sanctions, the prime minister said retaliatory measures, of course, must be well calculated. “They must not cause damage to us. They must be appropriate. Nevertheless, I do not rule out that in certain areas we will have to weigh up all aspects of our cooperation with the U.S.," Medvedev added.

The Russian Foreign Ministry also promised a “tough response” to the new U.S. sanctions. Pledging that the Kremlin will not leave the current and any new anti-Russian attack without a tough response, the ministry advised Washington to drop, as soon as possible, the illusions that they can talk to it in the language of sanctions. Moscow accused Washington of pursuing a multitude of objectives aimed at the removal of competitors from foreign markets with fresh sanctions.

Russia’s biggest arms trader Rosoboronexport, Russian Financial Corporation and Rusal aluminum giant are among sanctioned entities. The U.S. also blacklisted Gazprom CEO Aleksey Miller, VTB CEO Andrei Kostin, owner of Renova Group Viktor Vekselberg, Director General of Surgutneftegaz Vladimir Bogdanov, member of Sibur’s board of directors Kirill Shamalov, businessmen Igor Rotenberg, Oleg Deripaska and Suleiman Kerimov.