Against Putin, banks and national debt: the main thing from the Senate sanctions project supported by the White House

The US Senate Foreign Relations Committee published the text of a new sanctions bill against Russia, supported by the White House. It follows from the text that the senators propose to introduce personal sanctions against Vladimir Putin and other Russian officials not only in the event of an open invasion of Ukraine, but also in the event of a “significant escalation” compared to December 2021, if the US President decides what is behind it Russia, and the goal of the escalation is the violation of the sovereignty of Ukraine or the overthrow of its government.

The author of the bill, the head of the Senate International Committee, Democrat Bob Menendez, presented the bill at the committee meeting, which was announced by The Washington Post in the afternoon. The day before, Menendez called the document “the mother of all sanctions bills.”

The Washington Post reported that the White House supported the Menendez bill and is actively lobbying it among Democratic congressmen in defiance of the rival project of Republican Ted Cruz, who proposed imposing sanctions against Nord Stream 2 within 15 days.

The text of the Menendez project can be found here , and a short excerpt, for example, here . It largely coincides with the draft sanctions in the event of an invasion of Ukraine, leaked at the end of December. But it has important differences and new details.

What is included in the project

The main difference is that sanctions are supposed to be introduced not only in the event of a direct military invasion. Within 15 days after the entry into force of the law (and then once every 90 days during the first year of the law and once every 120 days starting from the second), the US president must determine: a) whether Russia or its satellites (meaning the DPR) and LPR) actions aimed at a “significant military escalation” of the situation in Ukraine compared to the situation on December 1, 2021; b) whether these actions were aimed at overthrowing the government of Ukraine, occupying its territory, interfering with sovereignty and undermining territorial integrity.

If the answer to both questions is yes, the President of the United States will be required to:

• Introduce personal sanctions against top Russian officials - the President, the Prime Minister, the Foreign Minister, the Minister of Defense and the Head of the General Staff, as well as the commanders of all types of troops. The sanctions include blocking property located in the United States or available to US authorities, as well as a ban on entry into the United States.

• Impose sanctions against at least three Russian banks or financial institutions out of the 12 listed in the bill (Sberbank, VTB, Gazprombank, VEB.RF, RDIF, Moscow Credit Bank, Alfa-Bank, Russian Agricultural Bank, Otkritie Bank, Promsvyazbank, Sovcombank, Transcapitalbank) . At the end of 90 days after this, sanctions can be imposed against structures that provide sanctioned banks with transaction messaging services (we are talking about SWIFT and its alternatives).

• Prohibit Americans from transactions with new issues of Russian government debt (both in the primary and secondary markets), as well as ban transactions with debt securities of at least 10 Russian state-owned companies.

• Consider all possible measures to prevent the commissioning of Nord Stream 2 (but we are not talking about mandatory direct sanctions against project participants).

• Determine the list of people and entities subject to sanctions in the oil and gas and coal industries, mining and processing of minerals and other industries that the US President deems subject to sanctions from the point of view of national security interests.

• A separate chapter is devoted to increasing military assistance to Ukraine (by $500 million in 2022 in the event of a Russian invasion) and other means of confronting Russia in Europe.

What was not included in the project

The bill does not mention at least two important measures that were announced in December by sources in the White House:

• Closing correspondent accounts of Russian banks in the United States, which would deprive them of the opportunity to conduct transactions in dollars.
• Export restrictions that would deprive Russia of the ability to buy imported electronics (for example, smartphones). To introduce such restrictions, however, the sanction of the Congress is not needed.

The date of consideration of the bill is still unknown.