WSJ: New U.S. Sanctions Target Russian Arms Deals23 September 2018 | 16:12 | WSJ
New sanctions on Russia, announced this week by the U.S., are meant as messages to other countries to curtail their purchases of Russian weapons, experts said, Wall Street Journal reported.
The U.S. on Thursday rolled out a number of sanctions measures implementing legislation signed last year that targets Moscow’s intelligence operations and defense industry.
The Treasury Department imposed sanctions on a Chinese military-research unit and its director for purchasing jet fighters and missiles from Russia. Simultaneously, the State Department added 33 Russian intelligence and defense agents to a list of officials and security companies with whom governments and companies are discouraged from dealing.
Moscow and Beijing condemned the latest round of sanctions. A Chinese Foreign Ministry spokesman said Friday that the sanctions “seriously violated the basic norms of international relations,” and called for Washington to cancel the designations. Russian Foreign Minister Sergei Lavrov called the measures “another manifestation of unfair competition.”
It is the first time Washington has used these authorities, senior officials told reporters on a conference call Thursday. But, they said, just the threat of the sanctions probably prevented several billion dollars worth of arms transfers.
The upshot of the announcements is that the threat of these sanctions is real, said Richard Nephew, a former sanctions policy official at the U.S. State Department who now is an adjunct professor and senior research scholar at Columbia University’s School of International and Public Affairs.
“That message signaling was the important bit of the exercise,” he said.
Mr. Nephew, who wrote a guide to U.S. sanctions policy called “The Art of Sanctions,” said the sanctions designation on the Chinese unit, alongside remarks from U.S. officials, was an implied threat to Turkey and India, both of which have entered arms deals with Russia.
The addition of 33 new agents and entities to the List of Specified Persons is of particular importance, said Judith Lee, a partner at the firm Gibson Dunn & Crutcher LLP, whose practice focuses on international trade, sanctions and export controls.
The listing doesn’t directly impose sanctions. Rather, she said, it warns those who conduct a significant transaction with listed parties that they could face sanctions. “Anyone with any sense of risk management is not going to have anything to do with these individuals,” Ms. Lee said.
U.S. officials declined to say exactly what constitutes a “significant transaction,” but said cost is only part of the equation. “There are a lot of factors that go into deciding when a transaction is significant,” an official said.
State Department guidance issued in October 2017 identifies the nature and magnitude of a transaction, its concern to U.S. national security and foreign policy interests, and its relation to the Russian defense or intelligence sectors as among the factors to determine whether a transaction is significant.
Even if the assets of those on this specified persons list aren’t blocked, Ms. Lee said, “It’s really a chilling measure…They will find themselves frozen out of global commerce.”
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