Three years of sanctions against Russia: losses and gains. US and EU economic sanctions against Russia

Volatility in the markets "both with the next wave of US sanctions rhetoric against Russia, and with the unstable situation in emerging markets." He assured that the economy has become more stable in recent years, and the government and the Central Bank "have all the necessary tools to ensure financial stability."

Why did the fall stop?

The dynamics of exchange rates stabilized, as “the first emotions subsided, the main outflow of non-residents from OFZ ended, and Brent oil stopped at a price just above $72 per barrel,” says BCS Premier investment strategist Alexander Bakhtin. The pressure on the ruble “should gradually subside,” he predicts: “It is possible that by the end of the week the dollar may correct downward and reach 63-64.5 rubles.”

Stabilization of the exchange rate is about 66 rubles. not surprising, since the new sanctions look less painful than senators Menendez and Graham, says Natalia Orlova, chief economist at Alfa Bank. “We see the trading range for the upcoming week at the levels of 64.25-67.50 rubles. per dollar,” she said in the review.

The ruble yesterday "overreacted" to the bill of the US senators, says Tatyana Evdokimova, an economist at Nordea Bank. She emphasizes that Senator Graham, the initiator of the bill to strengthen anti-Russian sanctions, introduced 13 bills in 2017, of which only one became law.

What are the new sanctions?

The State Department announced on August 8 that the US administration had concluded that Russia was involved in the use of a poisonous chemical agent in the assassination attempt on Sergei and Yulia Skripal in March of this year. Under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, the President of the United States is required to impose sanctions on a country that, according to the American government, has used chemical weapons prohibited by international conventions.

The law provides for two rounds of such sanctions, and the first will come into force on August 22. An additional round of sanctions could be adopted in 90 days if Russia does not meet certain conditions (its government must provide guarantees not to use chemical or biological weapons in the future, must be ready to allow international inspectors to its facilities).

Russia has become only the third country against which US sanctions are applied under this law in 27 years. The first was Syria in 2013, the second was North Korea in 2018 (the US government concluded that the DPRK was involved in the assassination of the half-brother of the North Korean leader in Malaysia in 2017 using the VX nerve agent).

The fact that the Trump administration applied the anti-chemical weapons law to Russia is of great political importance, but the economic consequences of these sanctions will most likely be purely symbolic. The mandatory set of sanctions, which will take effect August 22, includes halting United States foreign aid to Russia, halting arms supplies and funding for arms purchases, refusing U.S. government loans, and banning the export of goods and technologies to Russia that are “nationally sensitive.” security" USA.

The export of American weapons to Russia is already prohibited, and the United States does not provide Russia with state loans (on the contrary, Russia was until recently). Bilateral trade could suffer some losses - shipments worth "several hundred million dollars" (a year) could be affected, a State Department spokesman said at a briefing. But the US government has already provided for several exceptions that are allowed by the 1991 law, and therefore the restrictions will be much softer.

What exceptions did the State Department promise?

First, the United States will continue to provide "foreign assistance to Russia and its people" (including humanitarian aid, assistance in the development of human capital), the representative of the State Department said. Secondly, sanctions prohibiting the export of sensitive goods will not affect space cooperation between Russia and the United States. In addition, goods and technologies necessary for the safety of commercial passenger aviation will be removed from the new sanctions. Finally, US export licenses for sensitive products will continue to be issued on a case-by-case basis if the end user is a "pure commercial consumer" for civilian use only.

Now deliveries to Russia of American goods and technologies that are sensitive from the point of view of national security (this is a long list, including, for example, aeroderivative gas turbines, electronic devices and components, integrated circuits, measuring and calibration equipment, various materials, etc.), are only possible with an export license from the US Department of Commerce. These licenses are already issued with difficulty. Now, as a State Department spokesman said at a briefing, such licenses will be automatically denied if the end recipient of sensitive products is an organization associated with the Russian state. According to a State Department spokesman, potentially such consumers in Russia could lose "hundreds of millions of dollars" in future supplies.

In 2016 (latest available statistics), the US Department of Commerce reviewed 502 applications for export/re-export of goods to Russia for a total of $4.3 billion, of which 208 applications were approved for $2.7 billion.

What sanctions threaten Russia in 90 days?

Additional sanctions against Russia could be imposed three months later if the Russian government does not agree to provide guarantees against the use of chemical weapons. Considering that Russia does not consider itself involved in the poisoning of the Skripals, the scenario in which Russia agrees to give the United States some kind of guarantee looks incredible.

The second set of sanctions consists of six possible measures, of which the President of the United States must choose at least three. Of these, two are symbolic and have no practical significance for Russia (blocking international financial assistance and banning American banks from extending loans to the Russian authorities), one diplomatic (lowering the status of bilateral diplomatic relations), and the other three with potentially serious consequences for the economy and business, but they may not be applied (since three out of six measures are sufficient). These are a complete ban on the export of goods from the United States (except for food and agricultural products), a complete ban on imports to the United States and a ban on air communication with the United States for state-owned air carriers (in the case of Russia, this is Aeroflot). But the United States does not intend to ban Aeroflot flights, already.

At first, Aeroflot quotes suffered greatly: on Thursday morning they fell from 111.9 to 102.8 rubles, and at the minimum (at 10:29 Moscow time) their price was 98.8 rubles. (minus 12%). Then the quotes of the air carrier won back the fall - at 17:11 Moscow time, one share of Aeroflot costs only 0.6% cheaper than the day before.

Sanctions imposed under the Chemical Weapons Act are valid for at least a year and can be lifted by the President of the United States if the state against which they are imposed provides guarantees for the further non-use of chemical weapons, allows international inspectors, and also compensates for the damage suffered by victims of the use of chemical weapons.

For more than two months now, anti-Russian hysteria has been going on in the West, aimed at fooling the townsfolk and creating the image of an external enemy from Russia. Especially for you, we have prepared a complete list of sanctions imposed by a number of states, from which it is easy to conclude that, in fact, a serious aggravation of relations is not beneficial to anyone, and militant rhetoric is just words for PR politicians...

In response to Russia's actions in Crimea, the European Union, the United States, Canada and a number of other countries announced the imposition of sanctions. Measures include asset freezes and visa restrictions for designated individuals, as well as prohibiting companies from countries that have imposed sanctions from doing business with designated individuals and entities.

Current sanctions against Russia:

Elena Mizulina was banned from entering the country and more than 10 sanctions

Stopped the process of creating a free trade zone with the Customs Union of Russia, Belarus and Kazakhstan and 3 more sanctions

Stopped broadcasting the Rossiya TV channel due to “biased coverage of the situation in Ukraine” and 1 more sanction

Expelled all Russian servicemen and 7 more sanctions from its territory

Limited the period of stay for Russian citizens to a limit of 90 days and 12 more sanctions

Vladimir Putin:

“The deep values ​​of Russians and Europeans are the same. Yes, we are different, but we have the same interests, and I have said more than once that we need to create a single space. And if we do not build a united Europe and engage in separatism, we will occupy an insignificant place in the world.”

Consequences of sanctions against Russia

What sanctions were imposed against Russia in 2014? In response to Russia's actions in Crimea, the European Union, the United States, Canada and a number of other countries announced the imposition of sanctions. Measures include asset freezes and visa restrictions for designated individuals, as well as prohibiting companies from countries that have imposed sanctions from doing business with designated individuals and entities.

Organization for Economic Cooperation and Development decision of the Governing Council suspended the process of accepting Russia into its membership and announced the strengthening of cooperation with Ukraine

The Organization for Economic Co-operation and Development (OECD) is an international economic organization of developed countries that recognize the principles of representative democracy and a free market economy.

North Atlantic Treaty Organization:

Suspended military and civilian meetings with Russia and stopped planning joint military missions.
Suspended practical cooperation with Russia and excluded it from the process of eliminating Syrian chemical weapons.
Suspended all forms of cooperation with Russia, except for negotiations at the level of ambassadors and above.
The Parliamentary Assembly of the North Atlantic Treaty Organization has ceased cooperation with the Federal Assembly of the Russian Federation.
Closed free access to the headquarters to all employees of the Russian mission to the North Atlantic Treaty Organization, with the exception of the ambassador, his deputy and two assistants.

The North Atlantic Treaty Organization, NATO, the North Atlantic Alliance is a military-political bloc that unites most of the countries of Europe, the USA and Canada. Founded April 4, 1949 in the United States, "to protect Europe from Soviet influence."

European Union:

March 6, 2014 suspended negotiations with Russia on visa facilitation and a new basic agreement.
By a decision of the Council of the European Union dated March 17, 2014, he imposed sanctions against Russian and Crimean politicians and officials (individuals), in particular: prohibition of their entry into the territory of the European Union or transit, as well as the freezing of “all funds and economic resources that belong to, are in owned or controlled by these persons."
March 20, 2014 canceled the EU-Russia summit, scheduled for June of the same year.
On March 21, 2014, “due to the gravity of the situation”, he added the list of persons against whom sanctions are being imposed with 12 names of state and military figures of the Russian Federation and Crimea, as well as the head of the Rossiya Segodnya agency D. Kiselyov.
On March 25, 2014, he banned his embassies in Russia from issuing all types of visas to residents of Crimea.
On April 17, 2014, the European Parliament adopted a resolution of a recommendatory nature, in which it called for abandoning the construction of the South Stream gas pipeline.
April 28, 2014 decided to expand the list of persons against whom sanctions are imposed by 15 people, whose names were published on April 29 of the same year

The European Union (European Union, EU) is an economic and political association of 28 European states. Aimed at regional integration, the Union was legally fixed by the Maastricht Treaty in 1992 (which entered into force on November 1, 1993) on the principles of the European Communities.

Council of Europe canceled all planned events in Russia, deprived the Russian delegation of the right to vote and banned its representatives from holding leadership positions in the Parliamentary Assembly of the Council of Europe, and also banned Russian representatives from participating in observer missions of the Parliamentary Assembly of the Council of Europe until the end of 2014.

The Council of Europe is an international organization that promotes cooperation among all European countries in the field of legal standards, human rights, democratic development, the rule of law and cultural interaction. Founded in 1949, the Council of Europe is Europe's oldest international organization. It consists of 47 states, in which more than 800 million people live.

European Organization for the Safety of Air Navigation banned the implementation of air flights to the Crimea, as well as the implementation of flights in the airspace of the Crimea.

Eurocontrol is a European organization for the safety of air navigation, founded in 1960. It is an international organization working for a seamless, pan-European air traffic management system. Eurocontrol is a public organization and currently has 40 member states; its headquarters is in Haren, City of Brussels. Eurocontrol coordinates and plans air traffic control for the whole of Europe.

G8 "Big Eight" suspended the preparations of the leading Western countries for the G8 summit in Sochi in June and suspended Russia's participation.

The Group of Eight (English Group of Eight, G8), the Big Eight is an international club that unites the governments of Great Britain, Germany, Italy, Canada, Russia, the USA, France and Japan.

The unofficial forum of the leaders of these countries (with the participation of the European Commission), within the framework of which the approaches to pressing international problems are coordinated, is also called.

Selected countries

Australia:

Canceled a number of government visits to Russia.
It froze the accounts and also banned the entry of eight Russian citizens and four Ukrainian citizens "who play an important role in the Russian threat to the sovereignty and territorial integrity of Ukraine."

Albania

Bulgaria dismantled the South Stream pipes on its territory.

United Kingdom suspended military cooperation with Russia, including stopping the supply of military items to Russia and canceling planned joint military exercises.

Germany:

Suspended the implementation of a military contract with Russia worth 120 million euros.
Stopped the export of defense products to Russia.
It froze the sale of satellite technologies worth up to 700 million euros.
She refused to participate in the annual intergovernmental German-Russian consultations within the framework of the Petersburg Dialogue.
Stopped the export of military products to Russia.

Iceland joined the sanctions of the European Union against Russia.

Canada:

Stopped military cooperation with Russia.
She expelled all Russian servicemen from her territory.
It introduced a ban on entry into the country and froze the assets of seven Russian and three Crimean officials.
Imposed sanctions against the open joint-stock company "Joint-Stock Bank" Rossiya "" and added 14 more Russian officials to its sanctions list.
She expelled the deputy military attache of the Russian embassy from her territory.
Introduced sanctions against the chairman of the Sevastopol Electoral Commission Valery Medvedev, the chairman of the Crimean Electoral Commission Mikhail Malyshev and the company "Chernomorneftegaz".
Being the state chairman of the Arctic Council, she refused to participate in its working meetings held in Moscow.
She refused to launch the M3MSat microsatellite using a Russian rocket from the Baikonur Cosmodrome.
Imposed additional economic sanctions against nine Russian officials, as well as Expobank and RosEnergoBank.

The Canadian list almost completely repeats the US sanctions list.

Latvia:

Suspended military cooperation with Russia.
She stopped broadcasting the Rossiya TV channel due to "biased coverage of the situation in Ukraine."

Moldova joined the sanctions of the European Union against Russia.

Netherlands suspended military cooperation with Russia.

Norway:

Suspended participation in negotiations on the creation of a free trade area between the European Free Trade Association and the Customs Union of Russia, Belarus and Kazakhstan.
Suspended military cooperation with Russia until the end of May 2014.

New Zealand suspended negotiations with the Customs Union of Russia, Belarus and Kazakhstan on the creation of a free trade zone and recalled Trade Minister Tim Groser from Moscow.

Poland:**

Canceled the forum of regions with Russia.
Poczta Polska has stopped delivering letters and parcels intended for residents of Crimea.

United States of America (USA):

On March 4, 2014, investment and military cooperation with Russia was frozen, and bilateral negotiations and conference planning were also cancelled.

On March 17, US President Barack Obama announced that he had signed an executive order imposing sanctions against a number of Russian officials in the form of freezing their bank accounts, seizing property and refusing to issue entry visas. Seven people are listed in the decree by name, but the text also mentions the right of the secretary of the treasury to supplement the list in agreement with the secretary of state. The list includes: E.B. Mizulina - Chairman of the State Duma Committee on Family, Women and Children; L.E. Slutsky - Chairman of the State Duma Committee for the Commonwealth of Independent States; A.A. Klishas - Chairman of the Federation Council Committee on Constitutional Legislation; IN AND. Matvienko - Chairman of the Federation Council; BEFORE. Rogozin - Deputy Chairman of the Government of the Russian Federation; V.Yu. Surkov - Assistant to the President of the Russian Federation; S.Yu. Glazyev is an adviser to the president. The American corporation Morgan Stanley noted that the West is in no hurry with sanctions against Russia, "as this will significantly worsen the economic situation in Europe."

On March 20, they expanded the list of Russian high-ranking officials against whom sanctions were imposed, and also imposed sanctions against Rossiya Bank, which was called “the personal bank for senior officials of the Russian Federation” and major Russian businessmen , who were considered related business relations with President V.V. Putin (G.N. Timchenko, brothers A.R. and B.R. Rotenberg, Yu.V. Kovalchuk).

On March 27, they suspended cooperation with Russia in the field of combating drugs, and also suspended the issuance of licenses to American companies to export "potentially dangerous products" to Russia.
On March 28, they stopped licensing exports of defense goods and services to Russia.
On March 30, the work of the Russian-American presidential commission was stopped.
On April 2, a number of projects with Russia were suspended within the framework of a bilateral presidential commission, as well as some areas of cooperation through law enforcement agencies, and funding for their implementation was redirected to Ukraine.
On April 3, they suspended consultations with Russia in the field of missile defense, and also suspended cooperation in the space sector, with the exception of the International Space Station project and a number of projects in the field of peaceful atom.
On April 7, they stopped cooperation with Russia under the Nunn-Lugar program, and also closed access for Russian citizens to DOE facilities, including Brookhaven National Laboratory and Fermilab.
On April 11, sanctions were imposed on seven representatives of the Crimean leadership and the Chernomorneftegaz company.
On April 28, sanctions were imposed on 7 government officials of the Russian Federation and 17 Russian companies. They also banned the sale of high-tech goods to Russia, which can enhance the combat capability of the Russian army, and canceled previously issued licenses for their supply.

The first Russian companies to fall under US sanctions were Rossiya and Sobinbank. The Visa and MasterCard plastic cards issued by these banks have ceased to be serviced all over the world. Subsequently, sanctions were imposed against other companies associated with Vladimir Putin's inner circle: AquaNika LLC, Avia Group LLC, Avia Group Nord LLC, Zest CJSC, InvestCapitalBank, Sobinbank, Sakhatrans, SMP Bank, Stroygazmontazh ”, Stroytransgaz, Stroytransgaz LLC, Stroytransgaz OJSC, Stroytransgaz-M LLC, Stroytransgaz Holding, Abros Investment Company, Transoil LLC and Volga Group. Their assets are frozen, and 13 companies from this list will continue to need licenses to export products from the United States "with a presumption of refusal to export, re-export and other foreign transfers."

Ukraine:

She stopped broadcasting the TV channels Vesti, Rossiya 24, Channel One. World Wide Web”, “RTR Planet” and “NTV Mir” on its territory.
It froze the supply of weapons and military equipment to Russia.
Limited the period of stay for Russian citizens to a limit of 90 days.
Stopped pumping Russian gas into its underground storage facilities.
Joined the sanctions of the European Union against Russia.
Banned more than 100 officials - citizens of Russia, who supported the annexation of Crimea to Russia, from entering their territory.
Significantly strengthened border control of those arriving from Russia and Crimea: restricted entry for male citizens of the Russian Federation aged 16 to 60 who travel alone, except when traveling to relatives, to funerals, according to certified originals of invitations from legal entities and individuals or with the permission of the State Border Service itself.
Restricted entry for Ukrainian citizens with a Crimean male residence permit aged 16 to 60 who travel alone, except when traveling to relatives with a serious illness, if they have tickets for other planes, travel vouchers, or based on informing Ukrainian border guards.
Introduced filtration and verification measures for Ukrainian citizens with Crimean female registration aged 20 to 35 years.
The restrictions do not apply to Russians and Crimeans who arrived with families that include children.
The Constitutional Court of Ukraine has ceased cooperation with the Constitutional Court of the Russian Federation.
Blocked the flow of water to the Crimean peninsula through the North Crimean Canal.

France:

Announced its intention to terminate the contract for the construction of warships for Russia and suspended most of the military cooperation with Russia, including the exchange of visits and joint exercises.

Switzerland:

Stopped the process of creating a free trade zone with the Customs Union of Russia, Belarus and Kazakhstan.
Took note of the sanctions imposed by the European Union and the United States and decided to take all necessary measures to ensure that Swiss territory is not used to circumvent them. She also confirmed that the visa restrictions imposed by the European Union apply to its territory in accordance with the Schengen Agreement.
Frozen military cooperation with Russia.
Introduced restrictions on the financial transactions of 33 officials from Russia, against whom the European Union had previously imposed sanctions.
Expanded its sanctions list by another 15 people. Sanctions were imposed on ten citizens of Russia and five representatives of the south-east of Ukraine. Restrictions on financial transactions are introduced against these people, and they are also prohibited from entering Switzerland.

Sweden ceased military cooperation with Russia.

Montenegro joined the sanctions of the European Union against Russia.

Czech Republic

Česká pošta stopped delivering letters and parcels intended for residents of Crimea.

Estonia froze assets and property belonging to the mayor of Sevastopol Alexei Chalom, as well as his firms AS Tavrida Electric Export and Tavrida Electric Holding AG.

Japan:

She stopped negotiations on the liberalization of the visa regime for Russian citizens and suspended negotiations on the signing of agreements on investments, the prevention of dangerous military activities and cooperation in the field of astronautics with Russia.
Canceled and stopped issuing visas to 23 employees of Russian state structures and other persons

Economic sanctions against the Russian Federation have different roots, structures, mechanisms and goals. A distinctive feature of these sanctions is their targeted focus, i. restrictions are not imposed on the state as a whole, but on individual residents of the country: commercial structures and individuals.

Reasons for imposing sanctions against Russia

Key measures

Russian intervention in the situation on the Crimean peninsula in February - March 2014;

Russia's support for the unilateral declaration of independence of the Republic of Crimea;

The entry of the Republic of Crimea into the Russian Federation, which is considered as a violation of the territorial integrity of Ukraine;

Failure to comply with the terms of the Geneva Convention of April 17, 2014 Sectoral measures

"Moscow's support for the militias in eastern Ukraine";

“Failure to promote a peaceful settlement of the conflict in eastern Ukraine, as well as failure to promote access for international experts to the crash site of the Malaysian airliner.”

The initiator of the imposition of sanctions with the aim of isolating Russia internationally was the leadership of the United States, under strong pressure from which, at the risk of incurring huge economic damage, the EU countries joined the sanctions. The sanctions were also supported by the G7 states and some other countries that are partners of the US and the EU.

In mid-March 2014, after Russia, contrary to warnings, recognized the results of the Crimean referendum, supported the unilateral declaration of independence of the Republic of Crimea and accepted its proposal to join Russia, the United States and the European Union, Australia, New Zealand and Canada put into effect the first set of sanctions. These measures included asset freezes and visa restrictions for individuals on the special lists, as well as a ban on companies from sanctioning countries from doing business with individuals and entities on the lists. In addition to these restrictions, contacts and cooperation with Russia and Russian organizations in various fields were also curtailed.

Then the expansion of sanctions (April-May) was associated with the aggravation of the situation in the east of Ukraine. The organizers of the sanctions accused Russia of actions aimed at undermining the territorial integrity of Ukraine.

The next package of sanctions was related to the crash of a Boeing 777 in the Donetsk region on July 17, 2014, which, according to the leadership of a number of states, was caused by the actions of rebels supported by Russia.

Thus, the main reason for the imposition of sanctions was the actions of Russia during the crisis in Ukraine: the West considered that they threatened civil peace and the territorial integrity of Ukraine.

The sanctions lists were expanded more than ten times more, with the new defendants being mainly state-owned companies and entire sectors of the Russian economy. The last time the EU expanded the sanctions lists was on February 16. Five citizens of Russia fell under the sanctions, including the singer and deputy Iosif Kobzon, 14 residents of the East of Ukraine and nine militias. On February 18, Canada imposed sanctions against Rosneft.

As a result, more than 150 people fell under the sanctions - officials, businessmen, politicians, military and journalists. Assets are frozen, transactions and the issuance of long-term loans to the largest banks with state participation are prohibited: Sberbank, VTB, Vnesheconombank, Gazprombank, Rosselkhozbank and others. Supplies of equipment and technologies for the development of oil and gas fields have been banned in Russia, which, in fact, has suspended the modernization of the fuel and energy complex. Private companies have also joined the official bans. For example, ExxonMobil stopped 9 out of 10 projects in Russia.

The companies and scientific institutes connected with the defense industry fell under the sanctions. Suspended military cooperation between the US and the EU with Russia, including joint exercises, as well as restrictions on the export and import of weapons and defense industry products.

As a retaliatory measure, President Vladimir Putin banned the import of a number of food products from countries participating in sanctions against Russia.

If we analyze the sectoral structure of sanctions against Russia, we can find that they are directed against key ones, i.e. competitive sectors of the Russian economy: oil, gas, nuclear and military industries, as well as against Russian banking capital.

Since a huge share of Russia's exports is oriented to the European market, in practice the imposition of sanctions means ousting Russian companies from the European market.

Vectors of imposed sanctions in the oil industry :

· Sanctions against Russian oil companies and their subsidiaries, as well as auxiliary companies in the industry.

· A ban on the export of oil production and refining technologies to Russia.

· Refusal of joint projects in the oil sector and investment in promising projects.

Vectors of imposed sanctions in the gas industry :

· Sanctions against Russian gas companies and their subsidiaries, as well as supporting companies in the industry.

· Refusal of joint projects in the gas sector and investment of promising projects.

The promotion of large business to foreign markets is most often associated with the promotion of banking capital to these markets. The strengthening of the positions of Russian business in the European market was associated with the expansion of Russian banking capital to the European market in order to support Russian export companies and the participation of Russian capital in major international investment projects. The financial reserves accumulated by the Russian Federation allowed Russian state and semi-state banks in the first years after the global financial crisis to begin acquiring foreign banking assets and expanding their branch network abroad. Moreover, many banks in Europe and the world found themselves in a difficult financial situation and were willingly sold.

The locomotives of the banking sector in Russia have become semi-state banks - OJSC Sberbank of Russia, OJSC VTB [Vneshtorgbank], OJSC Gazprombank and others.

Sberbank of Russia: So far, he has managed to master the markets of 20 countries. In addition to Russia, open direct representative offices in Ukraine, Belarus, Kazakhstan, Germany (Munich), China and India. Acquired assets in Switzerland - SLB; Austria - Volksbank International AG, with a branch network in Hungary, Bosnia and Herzegovina, Croatia, Romania, Serbia, Czech Republic, Slovakia, Slovenia, Ukraine; Turkey - Denizbank, with a branch network in Turkey, Russia, Austria, Cyprus. It is the largest commercial bank in Russia and Europe.

Vneshtorgbank [VTB]: The second largest bank in Russia in terms of assets, operates in the financial market of many countries, has representative offices in Ukraine, Belarus, Armenia, Kazakhstan, Azerbaijan, Georgia, Angola, Great Britain, Singapore, UAE, Germany, France, Serbia.

Vnesheconombank: Since 2007, it has been a state corporation, the purpose of which is to provide and attract financial resources for the implementation of large investment projects, support for exports and servicing external public debt. It has representative offices in many countries, participated in the financing of major infrastructure projects (construction of the Ford Sollers plant, reconstruction of Pulkovo airport, construction of Olympic facilities in Sochi, support for projects and companies of Skolkovo, etc.).

Gazprombank: Industry bank, the third in Russia in terms of assets. Participates in the financing of major international projects in the oil and gas industry both within Russia and abroad [Europe, Asia]. In particular, it participates in the projects for the construction of the Blue Stream and Yamal-Europe gas pipelines, and in the development of the European GTS. It also serves companies in the engineering, chemical, nuclear and other industries. Represented in Russia, Switzerland, Armenia, Belarus, China, India, Mongolia.

Vectors of imposed sanctions in the banking industry :

· Freezing of Russian financial assets of individuals and legal entities.

· Disconnection of Russian banking structures from international payment systems.

· Reducing the client portfolio abroad.

· Restriction of access to investment projects.

· Restriction of access to external borrowings [credits].

· Restriction of financial freedom of Russian companies abroad.

· Other.

Countries that did not support sanctions against Russia [RF]: China, Brazil, India, South Africa.

Thus, all anti-Russian sanctions can be divided into two groups: political and financial and economic.

Russia's response to sanctions

The Russian response was asymmetrical - on August 6, Vladimir Putin signed a decree imposing a food embargo - a ban on the import of milk, meat, fish, vegetables, fruits and nuts from countries that have imposed sanctions against Russia. On August 20, lactose-free milk, dietary supplements, including vitamins and sports nutrition, fish fry and seed material for potatoes were removed from sanctions.

The media assessed the embargo, on the one hand, as a chance for Russian agricultural producers (the most common promise is to fill store shelves with high-quality and healthy products), on the other hand, as a factor that will lead to higher prices, because, despite investments in the agro-industrial complex, to sharply increase production to make up for imports (30% pork, 60% milk, etc.), producers can not. In addition, many publicists "revived" the fears of empty shelves and the monotony of the assortment, forgotten since Soviet times, since sausages, cheeses and various delicacies were banned. The excited citizens were answered with a flood of notes in the federal media about cheese-making industries in Kostroma, Yakutia and Bryansk - where they mastered the technology of cheese production according to Italian recipes. There were also jokes about Belarusian salmon (Belarus has been processing Norwegian salmon for many years, the import of which was banned to Russia) and “black schemes” of food trade, for example, the import of goods to Russia through the countries of the Customs Union.

Consider the main retaliatory sanctions.

August 6, 2014 Ban on the import into the Russian Federation of agricultural products, raw materials and food, the country of origin of which is the state that has decided to impose economic sanctions on Russian legal entities and (or) individuals or acceded to such a decision:

♦ Meat and edible offal and products;

♦ Fish and seafood;

♦ Milk and dairy products;

♦ Vegetables, edible roots and tubers;

♦ Fruits and nuts;

♦ Prepared foods, including cheeses and cottage cheese.

The government of the Russian Federation excluded from the sanctions list:

♦ lactose-free milk;

♦ salmon and trout fry;

♦ seed potatoes, onions, hybrid sweet corn;

♦ biologically active additives.

Changes for operators of international payment systems (including VISA, Mastercard):

♦ Security contributions to the Central Bank, equal to two days' turnover;

♦ Penalties for:

Failure to make a contribution;

Blocking of bank cards of Russian credit institutions unilaterally.

You can avoid making a contribution in the following cases:

♦ Processing localization in Russia

♦ Obtaining the status of a nationally significant payment system

"On the establishment of a ban on the admission of light industry goods originating from foreign countries for the purpose of making purchases to meet federal needs."

The restrictive list includes: fabrics, textiles, ropes, nets, outerwear, overalls, pullovers, cardigans, stockings and socks, underwear, furs, leather, suitcases, shoes and soles.

Bypass the ban

♦ Possible only if there is no corresponding production in the countries of the Customs Union.

♦ It is necessary to obtain an opinion from the Ministry of Industry and Trade.

"On the establishment of a ban on the admission of certain types of engineering goods originating from foreign countries for the purposes of procurement for state and municipal needs"

The ban applies to:

Vehicles of officials, public transport, as well as municipal and construction equipment.

Participation in tenders

Foreign manufacturers will have to:

♦ open production in Russia

♦ maintain the required level of production localization.

The level of localization will increase over the years. Now it is from 30 to 40% for various enterprises, and will have to reach 60-70% by 2018.

What conclusions can be drawn from the above.

“Much depends on the duration of the sanctions and on new targeted steps by the government to stimulate specific sectors of the economy.

While the situation is uncertain, I think that few investors and entrepreneurs will seriously invest in the development of production - rather, they will be engaged in schemes to circumvent restrictions.

“After the introduction of mutual sanctions, we decided to focus on working with the markets of the CIS members, primarily Belarus and Kazakhstan.

The adoption of sanctions has already had a negative impact on the Russian economy, as prices for euro- and dollar-dependent products began to rise due to the appreciation of currencies. Moreover, prices are rising for goods that were traditionally traded in the ruble zone. Negative dynamics is recorded throughout the year: a sharp increase in the cost of raw materials today has reached an unprecedented level of 16%.”

In early August 2017, US President Donald Trump signed into law the Countering America's Enemies with Sanctions Act, which tightens restrictions on several countries, including Russia. This step finally removed the last illusions about the imminent lifting or easing of sanctions. Now it is already obvious that they will have to live with them for many more years.

The rules of various countries governing sanctions against Russia have become so numerous and complex that it has become difficult to understand them. This is what we are going to try to do now.

WHY DID THEY IMPOSE SANCTIONS ON RUSSIA?

The reason for imposing sanctions was not only the events in Ukraine and the annexation of Crimea. The first recent sanctions were introduced back in 2010-2012 as a result of a well-known corruption scandal. Previous disagreements with the West, including the 2008 war in Georgia, have not resulted in sanctions. In chronological order, the reasons for the sanctions were:

"The Magnitsky Case"

Recall that according to some reports, a number of government officials of the Russian Federation and individuals have created a conspiracy to steal large sums from the Russian budget. The scope of the alleged abuses and the death in prison of US Heritage Foundation auditor Sergei Magnitsky caused widespread controversy, leading the US, the EU and several other countries to impose personal sanctions against the alleged perpetrators of the crime.

Currently, several dozen people are under sanctions, they are denied entry to these states, and all their property on the territory of these countries is blocked.

Sanctions in the "Magnitsky case" did not have much impact on the Russian economy. However, their political effect cannot be underestimated, since it was they who marked the final turn to the irreversible deterioration of relations between Russia and the West and became a model for the imposition of subsequent, much more unpleasant sanctions.

For the war in Ukraine and the annexation of Crimea

In 2014, the US, the EU and some other countries imposed a series of sanctions against Russia as punishment for annexing Crimea and participating in the events in Ukraine. Personal sanctions were adopted against individuals and organizations, “sectoral” sanctions against certain sectors of the Russian economy, as well as sanctions against Crimea.

For "cyber espionage" and interference in the US presidential election

In late 2016, just before he retired, President Obama passed an executive order imposing sanctions for "malicious computer activities" against the United States, that is, for alleged Russian hacking during the US elections.

The list of those punished included the FSB, the GRU and several other organizations. Several individuals were also sanctioned, for example, a certain hacker Belan, nicknamed “Fedunya”, Bogachev, nicknamed “Monster”, as well as several GRU officials.

All these persons had their property blocked in the United States, and the Americans were prohibited from any transactions with them. Obama also expelled a number of Russian diplomats from the country and took away two diplomatic dachas from the Russian embassy.

President Putin did not immediately retaliate, apparently hoping for better relations with the United States during the Trump presidency. However, when American sanctions against Russia were tightened in the summer of 2017, mirror measures were nevertheless taken belatedly - the dacha in Serebryany Bor was taken away from the American embassy, ​​and it was ordered to reduce staff.

For Syria

The US has imposed extensive sanctions on the Syrian government in connection with the ongoing civil war there. Several Russian entities also fell under these sanctions, for example, Kirsan Ilyumzhinov, Tempbank, Tempbank employees, Russian Financial Alliance Bank (now defunct) and some others.

The 2014 Ukraine Support Act also gave Obama the right to impose separate sanctions on the Russian Federation for the production and sale of defense products to Syria. However, the president did not use this right, since the sanctions “for Ukraine” already covered a large number of people.

For everything together

Contrary to popular belief, the justification for tightening sanctions under the recent US law in August 2017 was not just Russian alleged interference in the US presidential election. The law refers to a very long list of Russian transgressions, including annexing Crimea, harming Ukraine, supporting the Syrian government, corruption, fighting freedom of the press, interfering in the internal affairs and elections of many countries around the world, and much more.

Since there was no reason to strengthen the sanctions at that particular time, the prevailing opinion is that the adoption of this law was a purely American domestic political event, in which Russia was offered only the role of a whipping boy.

WHAT IS THE SPECIFIC CONTENT OF SANCTIONS?

Sanctions against the Russian Federation can be divided into several types according to their direct effect.

"Blocking Sanctions" on Individuals.

These are sanctions against individuals (legal entities and individuals) who, for example, are involved in “the establishment of state power in the Crimean region of Ukraine without the permission of the government of Ukraine, thereby undermining democratic processes and institutions in Ukraine.” Others were subjected to personal sanctions for other reasons: the Magnitsky case, cyber espionage, etc.

The property of these persons in the United States and other countries participating in the sanctions is blocked, and it is prohibited to conduct any transactions with them. The restrictions also apply to organizations more than 50% owned by these individuals. Individuals are prohibited from entering the territory of these countries. Americans are not even allowed to provide them with assistance of a purely humanitarian nature - to provide food, clothing, medicine.

A specific list of "blocked" persons is compiled by the US Treasury (Department of the Treasury) in consultation with the Department of State (Department of Foreign Affairs). At present, about 300 names are included in such lists for various reasons.

The current list of individuals is very diverse, it includes a variety of people from Strelkov-Girkin and motorcyclist Zaldostanov to Kobzon and Ramzan Kadyrov. Prominent economic figures, such as the Rotenberg brothers, the Kovalchuk brothers, Timchenko, etc., also got there - along with their subsidiaries. Is on the list and I.I. Sechin, but only in his personal capacity. Since Rosneft is not legally owned by more than 50%, the oil company does not fall under this type of sanctions.

The list also includes many legal entities, primarily defense industry enterprises such as Uralvagonzavod and Almaz-Antey.

Sanctions against Crimea.

Any transactions “in relation to” Crimea are prohibited. Investments in enterprises located on the peninsula, purchase and sale of any goods, services, technologies and property on this territory are prohibited. Specifically, about 50 Crimean enterprises (including, for example, the Yalta film studio), with which it is forbidden to conduct any transactions, also fell under the sanctions.

However, the US government still made some concessions - it issued exceptions, the so-called "general licenses". Any persons are allowed to sell agricultural products, some medicines, spare parts, provide for the use of some programs (for example, social networking sites), and provide certain telecommunications services. Private bank transfers to Crimea are allowed. True, in practice this is not feasible, since none of the banks operating in Crimea is connected to the SWIFT system, and does not have correspondent accounts in foreign banks.

Sectoral sanctions

This type of sanctions by the US and its allies affects the most important sectors of the Russian economy - banking and energy, limiting the ability to invest in them and supply certain technologies and equipment. The August 2017 law also gave the US government the right to extend sanctions to the railway, mining and metallurgical sectors of the Russian economy as well. The essence of these sanctions is as follows:

Restrictions on transactions with shares and debt obligations.

It is prohibited to conduct transactions with shares of a number of specific largest companies in the energy and financial sector of Russia, as well as with their debt obligations issued for more than a certain period.

"Debt transactions" include not only the purchase of bonds, but also the simple provision of loans.

These companies were divided into three groups:

• Prohibition on transactions with newly issued shares and debts for more than 14 days (until August 2017 - 30 days). This list includes the largest banks and financial companies of the Russian Federation (as well as their subsidiaries), including Sberbank, VTB, VEB, Rosagrobank, Gazprombank, Yandex.Money.
• Ban on transactions with newly issued debts over 60 days (previously - 90 days). The ban affects some of Russia's largest energy companies - Rosneft, Gazpromneft, Transneft and Novatek.
• Prohibition on transactions with new debts for more than 30 days. This group mainly includes companies in the defense and high-tech sectors.

All other transactions with companies from these lists are allowed.

Restrictions on Technology Transfer to Russian Energy Companies.

The detailed regulation of this type of restriction is carried out by several executive authorities in the United States.

The US Treasury has issued a directive prohibiting Americans from selling equipment, providing services, and transferring technology that would be used for oil exploration and production in deep water (over 500 feet, that is, about 150 meters), offshore arctic(located inside the Arctic Circle) and shale deposits in Russia and adjacent offshore areas by the largest Russian companies.

We are talking only about oil production, as Russia's European partners persuaded the United States not to touch the gas. The provision of financial services, such as lending and insurance, is not prohibited.

The list of companies that are prohibited from transferring such equipment is wider than the list that imposes a limit on lending over 60 days. It includes Gazprom, Rosneft, LUKOIL, Surgutneftegaz and other oil companies, but does not include, for example, pure gas Novatek.

At first, the ban on the transfer of equipment and technologies applied not only to these organizations, but also to companies in which they had more than 50% participation. But in August 2017, this restriction was tightened and now we are talking not only about the "daughters" of Russian companies, but also companies and projects in which they have more than 33% of the participation. In addition, if earlier it was only about projects in Russia (and adjacent to it), now the sanctions apply to operations around the world.

Another department - the US Department of Commerce - is issuing licenses for the export of products for which there is a regime of restrictions, including in view of the imposed sanctions.

An export license is required to transfer certain technologies and equipment that can be used, directly or indirectly, for the exploration or production of oil or gas in deep water (deeper than 500 feet), arctic offshore or shale fields in Russia, and also in cases where it is not possible to determine exactly whether the equipment will be used in such fields.

Thus, we are talking not only about oil production, but also about gas. Licenses are required for the supply of equipment and technologies to any company in Russia, not just those on the list of sanctions.

When applying for an export license, the presumption of refusal in cases where the equipment can be used in the mentioned fields for oil production.

Specific restricted equipment includes (but is not limited to): drilling rigs, horizontal drilling equipment, drilling and completion equipment, subsea processing equipment, offshore equipment likely to be used in the Arctic, well and wireline motors and equipment, drill pipe and casing pipes, hydraulic fracturing software, high pressure pumps, seismic equipment, ROVs, compressors, expanders, valves, risers.

US Export Control is attempting to extend its rules beyond the US. Thus, the transfer to Russia of equipment containing at least 25% of American products from any country and by any person should fall under these restrictions.

By the way, restrictions on the export to Russia of equipment that can be used for military purposes, namely the requirement to obtain an export license, existed even before the Crimean crisis, so no separate sanctions were adopted regarding this type of product.

WHAT IS THE NEW PROVISIONS INCLUDED IN THE RECENT AMERICAN LAW?

The new US law, which Trump so reluctantly signed, includes several important provisions that affect the interests of the Russian Federation.

First, the procedure for reviewing sanctions has changed dramatically.

Previously, Congress passed only a "framework law" that gave the president the right to impose and lift sanctions on his own. Specific restrictions and lists of affected persons were adopted on a routine basis by presidential decrees and acts of certain ministries. This is how Obama accepted the sanctions. Now congressmen have incorporated into the new act all the sanctions imposed by Obama's decrees, thus giving them the force of law.

The new law also provides that the lifting of existing sanctions, changes to the list of affected persons, as well as the granting of critical exemptions (so-called "licenses") must be considered in both houses of Congress. If Congress does not agree to the lifting or modification of sanctions, it will take a decision about this - in the form of a law. This impromptu bill can be vetoed by the President, but in theory this veto can be overridden by Congress, as usual, by a two-thirds majority.

These new rules severely restrict the rights of the president and significantly delay the prospect of lifting sanctions.

Thus, in order to remove some repentant Zaldostanov from the list of persons under sanctions now, this decision will have to be considered in the form of a bill in the Congress committees, passed through both chambers, and, if necessary, vetoed. With the hostility of Congress, the only hope of the informal biker will be that Congress will not have time to override the veto within a certain maximum period.

Trump did not want to sign this law, but was forced to do so, because he understood that his veto would be easily overcome - both Democrats and Republicans unanimously voted for the bill, and there were only a few "against" votes.

Secondly, the new law toughened the regime of already existing sectoral sanctions against the Russian Federation. As we have already mentioned, the maximum term of permitted debt obligations has been reduced. The new deadlines were 14 days for banks under sanctions (previously 30 days) and 60 days for energy companies (previously 60 days).

In addition, as already mentioned, the law tightens restrictions on Russian oil projects in deep water, offshore Arctic and shale fields, setting a maximum threshold of 33% participation of Russian organizations in projects to which Americans can sell equipment and technologies.

Third, by law, Congress gives the president the power—and in some cases, the obligation—to impose all sorts of new sanctions against certain individuals.

Thus, the President can impose sanctions - in coordination with United States allies - on any person who sells equipment, technology and services worth more than $ 1 million related to the construction, modernization and support of Russian pipelines that send energy for export, or commits related investments.

It was this point that aroused the indignation of the Europeans, who saw here, not without reason, an attempt to ban the construction of new pipelines from Russia. In order to reassure them, the Americans inserted the wording about "coordination with allies" into the final law.

This provision is actually extraterritorial - restrictions are imposed not only on American persons, but in general on any individual and legal entity in the world.

But the key word here is "may". It seems unlikely that, under the current conditions, the US president would impose sanctions on Europeans, for example, for participating in Nord Stream 2. However, selective application of such sanctions is likely.

According to the same law, the President of the United States is obliged to impose sanctions on:

• those who knowingly engage in “actions that undermine cybersecurity against any person, including a democratic institution or government, on behalf of the government of the Russian Federation”;
• responsible for “ordering, controlling or otherwise directing serious human rights violations in any territory forcibly occupied or otherwise controlled by the government of the Russian Federation”.
• any persons who carry out “significant operations” with persons who are part of, or acting on behalf of and in the interests of the “defense or intelligence sectors of the Government of the Russian Federation”, including the GRU of the General Staff and the FSB. To prevent Trump from evading this provision, he was ordered to issue rules within 60 days on how to identify such individuals.

This is one of the strangest points in the entire law. Theoretically, any buyers of Russian weapons in the international arena could be subject to sanctions.

• any person who makes an investment in excess of $10 million (or assists in making that investment) if that investment would result in the Russian Federation being able to privatize state property in a manner that would unfairly enrich any Russian official or their friends and relatives.
• foreign persons who facilitated the acquisition of various types of weapons by the Syrian government.

All these sanctions can be applied to any individual and legal entity in the world, no matter where he lives, and no matter what citizenship and jurisdiction he has.

It is difficult to say how actively President Trump will impose these sanctions. In the "statement of signing" - a note accompanying the signing of the law, he stated that he did not agree with many of the provisions of the law (including some of these points), but would sign it in the interests of "the unity of the nation."

In the history of the United States, there have been cases when presidents signed laws, with some insignificant part of which they did not agree, as they indicated in their “statement of signing”. This statement was then used to try to avoid the implementation of these controversial provisions of the signed law.

Fourth, the law contains a declaration of support for Ukraine’s energy industry, including a statement that US policy is to “continue to oppose the Nord Stream 2 pipeline,” given its devastating impact on the energy security of Europe, the development of the gas market in Central and Eastern Europe and Energy Reforms in Ukraine”.

The law also rather cynically states that "the United States government must prioritize the export of United States energy resources in order to create jobs in America, help allies and partners of the United States, and strengthen the foreign policy of the United States."

This latest declaration caused a lot of criticism from the Europeans, who saw in all this law only the desire of the United States to strengthen its position in the European energy market.

It is possible, however, that this in itself legally useless provision was introduced only in order to prick Trump in a Jesuit way - if he had not signed the law, he would have been reproached for being against creating jobs in America, which was one of the main points of his election program.

WHICH COUNTRIES ARE PARTICIPATED IN THE SANCTION REGIME?

The sanctions regime was adopted by almost all countries that can be conditionally called the “white world”. These are the USA and Canada, all countries of geographical Europe, with the exception of Serbia, Bosnia, Macedonia and, of course, Belarus. In addition, Japan, Georgia, Australia, New Zealand and some small Caribbean states have adopted laws on sanctions against the Russian Federation.

The EU sanctions are almost exactly the same as the US sanctions that were in place before the August 2017 law. Only the specific list of persons under sanctions is somewhat different. However, the accession of the Europeans to the latest round of sanctions is still in question. Judging by the protests coming from the representatives of the EU, it is unlikely that this bloc will automatically join the new restrictions, at least not exactly all of them.

And yet, despite the fact that the latest sanctions adopted by the Americans were perceived ambiguously, it is unlikely that the "sanctions coalition" will fall apart in the near future.

WHO MUST COMPLY WITH THESE SANCTIONS? SHOULD NATIONS NOT PARTICIPATED IN THE SANCTION REGIME OBEY IT?

US law establishes that the restriction regime applies to transactions of "US persons or in the United States" (US persons and in the United States). "U.S. Persons" means U.S. citizens, permanent residents, U.S. companies (including branches of foreign companies), and all persons located on its territory.

From a formal point of view, this wording does not imply an attempt to extend American regulation extraterritorially. All persons against whom sanctions are imposed are the object, not the subject, of US law. Foreigners who violate sanctions, the Americans, in theory, can simply be included in the sanctions list, but they cannot be punished precisely for violating the sanctions regime.

The difference here is big - when you get on the sanctions list, you simply lose the opportunity to travel to America and do business with the Americans; if they admit that you are violating the sanctions regime, then you can be subjected to criminal punishment in the United States and go to prison for 20 years.

Recently, however, some purely legally extraterritorial element has also appeared in the practice of enforcement of sanctions. Any non-cash settlements in US dollars between persons, even those who are not located in the United States, are considered to be transactions carried out in the United States as well, since money transfers usually go through correspondent accounts of American banks.

Thus, a Chinese, and even a Russian, who paid something, or received something in non-cash dollars from a company under sanctions, can also theoretically be recognized as a violator of sanctions - and be detained somewhere in Thailand and sent to America to go to jail for 20 years.

In EU legislation, on the contrary, the persons who must comply with sanctions against the Russian Federation are very clearly defined, namely:

• citizens of EU member states,
• organizations established under the laws of EU member states,
• organizations doing business wholly or partly in the EU,
• any person within the EU
• any persons on the territory of any aircraft or vessel flying under the jurisdiction of EU Member States.

WHY ARE RUSSIA'S PARTNERS SO AFRAID OF VIOLATING THESE SANCTIONS? CAN THESE SANCTIONS BE BYPASSED?

Companies with international operations are very afraid of punishment for violating sanctions, especially from the United States. If they conduct at least some activity in the United States, Americans can consider them subjects of their laws and, accordingly, punish them for this violation.

As we have already indicated, even if a company has never conducted any activity in the USA, and not a single one of their employees has ever set foot there, but in the calculations it uses American dollars - it can be recognized that it does business in the USA as well. and, therefore, is obliged to comply with the sanctions regime.

In 2015, the US authorities fined the largest French bank, BNP-Paribas, a mind-boggling sum of $9 billion (not a typo, just billions) for allegedly violating US sanctions against Iran. Although France does not participate in the Iran sanctions regime and the bank's division dealing with Iran was not located in the US, the reason for the fine was that the bank settled these transactions through US dollar correspondent accounts.

Despite the protests of the French government, the fine was imposed, and BNP-Paribas paid for it, as the alternative would be to ban the bank from using dollars in settlements, that is, the actual closure of the bank.

To be frank, the US government has been acting a bit like a bandit lately, and it takes money not only from foreign corporations, but also from native American companies - for example, $ 13 billion was taken from J.P. Morgan Bank in the form of fine for alleged violations in mortgage lending, the Bank of America - $ 17 billion.

In the United States, not only the president can impose fines, but also very numerous agencies and departments, federal and state levels, whose leaders in this way - "punishing evil corporations" - increase their political capital. Recently, there has been an unprecedented strengthening of the role of the state in the United States, despite the fact that all legal institutions, decentralization and the number of rogues in power have remained unchanged there since Marktven's times, when the role of the state was very weak and it could not harm anyone much.

Against this background, it would be the simplest and most honorable thing to fine a company like Siemens several billion dollars by the authority of some New York State Comptroller for violating the sanctions regime. It is not surprising that international companies are afraid to somehow provoke the annoyance or attention of American "competent authorities".

As we have already said, in addition to fines, there is also a very severe criminal punishment for violating the sanctions regime for an individual (including corporate officials). This is a fine of up to $1 million and a prison sentence of up to 20 years.

Given all this, it is not surprising that foreign corporations are trying to avoid violating the sanctions regime and not getting involved in schemes to evade them.

WHAT IMPACT DID THE SANCTIONS HAVE ON THE ECONOMY OF RUSSIA, INCLUDING THE OIL AND GAS SECTOR?

There is no doubt that in recent years the Russian economy has experienced significant difficulties. However, it is difficult to determine how large the contribution of international sanctions is to this.

In general, there is an opinion in the press and among economists that the main reason for the difficulties in the Russian economy was not international sanctions, but the fall in oil prices. In 2016, for example, oil and gas exports from Russia amounted to $151 billion, up from $349 billion in 2013.

In addition, there are structural problems of the Russian economy: excessive stateization, inefficient state institutions and regulation, corruption, which caused economic growth in Russia to slow down even before the Crimean crisis.

Still, the impact of sanctions on the Russian economy cannot be underestimated.

The most serious damage is caused by the restriction of lending to large Russian banks and companies from abroad. The first blow was the need to return large loans to foreign creditors without the possibility of refinancing. In total, in 2014-2016, the difference between repaid and attracted loans of Russian companies amounted to about 170 billion dollars. Although the Russians, in general, have so far managed to get out, but such a monetary failure has become one of the reasons for the devaluation of the ruble.

Even more serious are the long-term consequences of restricting foreign lending. Most major investments, including in the real sector of the economy, for example, the opening of new industries, are carried out through bank loans, including syndicated ones, with participants from many countries. Inside the Russian Federation, there is now little capital for investment (in 2016, the assets of the banking system for the first time in the history of the Russian Federation decreased), Europe, the USA and Japan, that is, 95% of the global financial market, are closed to Russian borrowers, and the Chinese are not yet eager to invest a lot in Russia.

Since only the largest banks, such as Sberbank, VTB, were sanctioned, it is theoretically possible that Western financing will go through other banks that are not sanctioned. However, this is unlikely to be a strong source of investment, not least because Russia's banking system is now becoming more and more consolidated.

There is a high probability that without the resumption of lending from abroad, the resumption of high economic growth rates in Russia will be difficult.

The energy industry has also been directly affected. Sanctions have had a particularly unpleasant impact on heavily indebted companies such as Rosneft. There were rumors that it was the actions of Rosneft that caused the collapse of the ruble exchange rate, as the company was forced to buy dollars on the open market in huge quantities due to the inability to borrow money in dollars.

As for restrictions on the supply of equipment, it affects a rather narrow area: deep-water drilling, production on the Arctic shelf and shale oil. Therefore, on a macroeconomic scale, the impact of this ban is not very strong. However, for individual companies, these sanctions, and especially those adopted in August 2017, are quite painful, as they limit their ability to develop some new projects.

Sanctions also have a negative psychological and moral impact. The situation when the country is under sanctions scares away most of the investors. If foreign companies already operating in Russia can still decide to develop and invest new money, then companies that have never operated in Russia are unlikely to open their enterprises and invest money in the country.

Sometimes the opinion is expressed that sanctions are an incentive for the development of their own industry. But this statement is more than debatable.

A certain "import substitution" is actually happening now. But it makes no sense to rejoice and praise the sanctions for this.

Firstly, such import substitution has as its main reason a sharp devaluation of the ruble, as a result of which the import of various kinds of products from abroad, including equipment, has greatly decreased. Although the ban on lending to large Russian companies for a long period was also one of the reasons for the devaluation, it is likely that the ruble would have fallen sharply without these measures, but simply as a result of the collapse in oil prices.

Secondly, even if the sanctions somehow caused, through devaluation, a decrease in imports and some growth in demand for domestic products, the price of this improvement is very high - the possibility of lending is closed for enterprises. Due to the instability of the ruble, interest rates in lending are very high. Until now, enterprises are credited at 15-20% per annum, and this despite the fact that the official inflation rate, according to the latest data, is about 4%. This rate is almost certainly higher than the average rate of return for the entire engineering industry. Where it makes sense to lend in dollars, for example, in oil and gas production, lending from abroad is in many cases closed, as a result of which a significant number of large projects cannot start.

And, thirdly, all import substitution takes place, as it is not sad to admit, at a very low technological level.

Indeed, many oil companies are now ditching the costly services of companies like Schlumberger or Halliburton and are starting to call on "Uncle Vasya" again to solve their problems. But truly high-tech industries are developing extremely slowly due to serious structural problems in the Russian Federation.

In addition to the problems already mentioned (inefficient state, corruption, etc.), the most difficult issue of the lack of technical personnel should be mentioned. The old engineering cadres are leaving, the young ones are not being trained in the required quantity and quality. The system of secondary technical education has completely collapsed.

Under such conditions, the task of building a mass competitive high-tech production in Russia is extremely difficult.

WHEN WILL THE SANCTIONS BE REMOVED?

The lifting or easing of sanctions is currently extremely unlikely due to the international political situation, the internal political struggle in the United States and the legal complexity of this process.

As for the EU sanctions, it is quite easy to lift them legally. Unlike the United States, where sanctions are regulated by a whole bunch of documents, the EU sanctions were adopted by one document. European sanctions were first adopted in July 2014 for a period of six months, then they were repeatedly extended every 6 months - the last time on June 28, 2017.

To extend the sanctions, all EU member states must vote unanimously each time. The specific list of persons under sanctions is supplemented in the working order by the executive bodies of the EU.

Thus, it is enough that at least one country votes against, and the sanctions will not be extended and will stop. It is unlikely that any country would go against all the rest. However, if the main members of the EU decide to end the sanctions, no country from the "belt of sufferers" like Poland or Lithuania will be able to prevent this. In this case, the principle of unanimity in the EU works to Russia's advantage.

Formally, EU sanctions are being extended due to Russia's failure to comply with the Minsk agreements. Recall that the Minsk agreements on February 15, 2015 (Minsk-2), adopted during the meeting of the leaders of Russia, Ukraine, France and Germany, are now not being implemented by either Russia or Ukraine. The agreements include such difficult-to-implement provisions as the transfer to the Ukrainian government of control over the state border between the Russian Federation and Ukraine in the Donbas region. These agreements impose an obligation on Ukraine, among other things, to change the constitution and grant special status to parts of the Donetsk and Lugansk regions, which Ukrainians are also in no hurry to do.

It is difficult to say whether the theoretical implementation of these agreements by Russia will entail the lifting of sanctions by the EU. The very act of sanctions states that they are imposed, among other things, due to the annexation of Crimea by Russia. So the fulfillment by Russia of its part of the Minsk agreements does not yet guarantee the lifting of EU sanctions. However, the hypothetical cessation of the “annexation” of Crimea cannot guarantee anything either.

However, the lifting of European sanctions without the lifting of US sanctions, which have a certain extraterritoriality, will not greatly improve the position of the Russian Federation. American sanctions will be much more difficult to lift.

First, at present, no prerequisites for improving relations between the Russian Federation and the United States are foreseen. Trade between the Russian Federation and the United States has always been at a rather low level, and the Americans are not particularly interested in improving relations with the Russian Federation. It is much more profitable to continue to use it as a bogey for the sake of "the unity of the nation."

Secondly, the lifting of sanctions will require the adoption of a corresponding law, which will have to pass through both houses of Congress. Given the constant squabbles, intrigues and inner-party struggle in this body, it will be difficult to achieve this.

Thirdly, as long as the international situation remains tense, and the Ukrainian and Crimean issues remain unresolved from an international legal point of view, there is no pretext for lifting sanctions. A legal solution to this issue during the life of the majority of readers of this article may not come. Let us recall that, for example, the problem of Northern Cyprus has not been resolved since 1974, and is unlikely to be resolved in the near future.

Sanctions can be lifted in the near future only in the event of a radical change in the international political situation, for example, when some common strong enemy appears. If such an unlikely event does not occur, it could be decades before the sanctions are lifted.

Ruslan Khaliullin

In early August, the United States published a Congressional bill imposing new sanctions against individuals and companies in the Russian Federation, as well as against public debt, which caused a panic in the currency markets. At the same time, the US State Department announced that President Trump has signed a ban on the supply of dual-use electronics to Russia, which will come into force on August 22. According to the Ministry of Finance of the Russian Federation, the presented measures will not cause serious damage to the country's economy as a whole.

On August 8, 2018, the US Congress announced new US sanctions against the Russian Federation, which include measures of influence in various areas. The State Department did not stand aside either. He also announced the introduction of new restrictions.

Who wants to impose sanctions against the Russian Federation

New sanctions against the Russian Federation are planned to be introduced by three US governance structures at once:

• Congress;
• State Department;
• President Trump personally.

The most rigid and aggressive are the proposals of the Congress. The President offers a softer solution to the issue.

What are the new sanctions for?

The US Congress announced the bill "Protecting American Security from Kremlin Aggression", developed jointly by Democratic and Republican senators, imposing restrictions on work with state banks of the Russian Federation and external public debt. The basis was:

• ongoing, according to congressmen, interference of the Russian Federation in the electoral process in the United States;
• actions of the Russian Federation in Ukraine;
• spreading chaos in Syria.

The State Department decided to impose sanctions because of the Skripal case, i.e. due to the use of chemical weapons by Russia.

Important! The State Department sanctions are not imposed at the request of President Trump, but under American law that provides for restrictive measures for the use of chemical weapons.

The Trump administration, for its part, is drafting an executive order imposing sanctions for meddling in US elections.

What sanctions are proposed

The U.S. Congressional Sanctions Bill provides for the following restrictions:

• personal restrictions against Russian politicians and entrepreneurs who promote illegal activities on the orders of President Putin, directly or indirectly - a ban on entry, seizure of accounts and property;
• a ban on cooperation with Russian oil companies, including the work of American citizens in them, as well as investments in;
• individual restrictions will be placed on all individuals found to engage in illegal activities in cyberspace and interfere in US political processes.

As part of personal restrictions, American insurance companies are required to report to government agencies about individuals and companies from Russia purchasing in the United States. If Congress decides that this person is close to Putin, then the property will be seized.

Reference! This is not the first time that the United States has been trying to impose sanctions against the Russian public debt, but these initiatives have not yet been developed.

US State Department Sanctions:

• a ban on the supply to the Russian Federation of components and electronic devices that have a dual purpose;
• a ban on US aircraft;
• decrease in the level of diplomatic relations.

A complete ban on the export of American-made goods to Russia is also possible. However, there are exceptions - these are such areas of cooperation as space, i.e. the ban will not apply to electronic devices necessary for the development of the space industry.

President Donald Trump's executive order does not, in fact, introduce new restrictions, but only gives him permission to personally impose them, against individuals and foreign companies that spread disinformation and interfere in US elections. The President is given the right to impose restrictions on ten of the thirty largest companies in any state.

Important! To date, Congressional sanctions and Trump's Executive Order are just a blueprint. They may be subject to change. Only the first package of State Department restrictions actually comes into effect on August 22.

The timing of the imposition of sanctions

The State Department's measures are divided into two packages. The first, which will come into force on August 22, includes restrictions on the supply of dual-use electronics. The second package is planned to be introduced in three months, i.е. in the end of November. It can include all other declared measures of influence.

Effects

Russian Finance Minister Anton Seluyanov is sure that the new measures will affect, first of all, American investors, since the ban on the purchase of Russian debt bonds deprives them of a guaranteed stable income.

In connection with the latest news, the Ministry of Finance and analysts provide three possible consequences:

• positive;
• negative;
• moderate.

According to the first, positive scenario, restrictions will be expanded only by adding new companies and individuals to the "black" lists. This will not cause any significant damage to the Russian economy, since this type of influence has been used by the Americans for several years now and everyone has already got used to it and adapted to it. It is this scenario that is considered the most probable. The explanation for this is simple: the ban on holding and buying Russian debt securities has negative consequences, primarily for the Americans themselves. Investors are in no hurry to sell Russian debt bonds. In addition, the Ministry of Finance in recent days has successfully placed another issue of securities in the amount of 15 and 25 million rubles.

Important! At the moment, the market is seeing an increase in quotations for Russian federal loan bonds. Of course, in connection with this, their yield decreased by 7%, but this is a confirmation of the demand for securities.

A moderate scenario for the development of events provides for the introduction of restrictions on public debt, but only on new issues of securities. In this case, American investors will have to be replaced. The Central Bank and the Ministry of Finance are already preparing for this option, but it does not imply a significant impact on the country's economy.

In the worst case, US sanctions on Russia's national debt will be introduced in full. This will entail:

• release on the market in the shortest possible time of a large number of securities;
• within 30%;
• losses for holders forced to sell securities.

Analysts' expert opinion on the consequences of the introduction of new sanctions can be found by watching the video

According to Maria Zakharova, a representative of the Russian Foreign Ministry, Russia is preparing retaliatory “mirror” sanctions. They are being worked out and will be adopted depending on the actions of the United States.

What sanctions have already been introduced in 2018

Since the beginning of 2018, the United States and the European Union have already imposed sanctions against Russia.

Table 2. US and EU sanctions against Russia imposed in 2018