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Senators Say Russia Sanctions Mustn’t Be Lifted

With President Donald Trump's position on Russian sanctions still unclear, key members of the Senate Banking Committee said Wednesday they should remain in place until Moscow makes drastic policy changes.

WASHINGTON (CN) - With President Donald Trump's position on Russian sanctions still unclear, key members of the Senate Banking Committee said Wednesday they should remain in place until Moscow makes drastic policy changes.

Easing the sanctions imposed three years ago by the U.S. and its allies for Moscow's annexation of Crimea could green-light further Russian aggression, said Sen. Mike Crapo, the committee's Republican chairman from Idaho.

"Russia remains a hostile, recalcitrant power, deploying its military, cyber-enabled information espionage activities, and economic tactics to harm the United States and drive a wedge between it and its allies," Crapo said at a committee hearing Wednesday.

"Any reduction to the level of sanctions in the absence of a corresponding shift in Russian behavior will be interpreted as a change in U.S. policy on Russia’s involvement in Ukraine," he added.

Crapo called the hearing to discuss the effectiveness and future of U.S. sanctions on Russia.

Although President Trump had expressed openness to lifting the sanctions just before he took office, and has talked repeatedly about improving U.S. relations with Russia, he has signaled in the first two months of his administration that he will leave them in place for now.

However, questions about contacts between the Trump campaign and Russian officials have plagued the young administration.

Trump's first national security adviser, Gen. Michael Flynn, was pushed out of his post for reportedly discussing the sanctions with Russian ambassador Sergey Kislyak before the inauguration.

Ranking Senate Banking Committee member Sen. Sherrod Brown, D-Ohio, said that an uptick in violence in Ukraine since the election signifies that Moscow is testing the new administration's resolve to support Ukraine.

Rather than weakening sanctions, Brown said the U.S. should consider strengthening them.

"The president must work with Congress on a Russia policy that is clear-eyed about our adversaries and their behavior," Brown said.

According to Rodney Ludema, a Georgetown University professor in the School of Foreign Service and Department of Economics, the sanctions were well designed and have so far been effective.

Ludema co-authored a report on the Russian sanctions with Daniel Ahn, which found that the targeted companies lost one-third of their operating revenue and employees, and a half of their asset value.

The report also concluded that the so-called "collateral damage" of the sanctions has been minimal.

Ludema cautioned, however, that any escalation in sanctions should be carefully thought out.

Taking a more pessimistic view of their efficacy, Sen. John Kennedy, R-La., rattled off a list of Russian actions since the sanctions were implemented to suggest they have not changed Russian President Vladimir Putin's behavior.

"It didn't stop Mr. Putin from - it didn't stop his aggression in Syria, did it," he said. "It didn't stop him from trying to influence the American elections did it," he continued, adding that "it hasn't stopped him from implementing a disinformation campaign in countries in the EU, has it."

Eric Lorber with the Center for a New American Century mostly conceded these points, though he noted the sanctions were not intended to change Russia's behavior in Syria.

Kennedy, along with Sen. Ben Sasse, R-Neb., zeroed in on Putin's assets, prodding the hearing witnesses about ways to design sanctions that would directly punish Putin and his associates.

"How rich is Vladimir Putin?" Sasse asked.

Sasse repeated the question again later in the day at a Senate Judiciary hearing on the tools Russia uses to undermine democracy.

Nobody asked the question on Wednesday could say for sure, but Lorber said it could be tens of billions of dollars.

Targeting the assets of Putin and other Russian oligarchs would require identifying exactly where those assets are invested.

Kennedy asked Elizabeth Rosenberg, also with the Center for a New American Century, what would happen if the U.S. could figure that out, and proceeded to freeze their assets.

Those assets, both direct and indirect, would constitute "a massive amount of money," Rosenberg said, and targeting them would have collateral, global consequences.

"He owns assets of that size, that would affect the global economy if they were frozen?" Kennedy asked.

Rosenberg reiterated that targeting those assets would have "profound" economic consequences, and would hit U.S. global banks particularly hard, since they would be tasked with implementing such a strategy, she said.

"It would be a compliance and liability nightmare for them," she added.

Categories / International, Politics

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