UPDATED: US House Passed Russia Sanctions - Global Trade Magazine
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  July 25th, 2017 | Written by

UPDATED: US House Passed Russia Sanctions

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  • Legislation to enhance sanctions against Russia is scheduled for a vote in the US House of Representatives today.
  • Russia sanctions bill is expected to land on Trump's desk for his signature within a few days.
  • Trump is stuck between a rock and hard place when it comes Russia sanctions.

The United States House of Representatives passed legislation to enhance sanctions against Russia—as well as Iran and North Korea—by  margin of 419 to 3 yesterday.

The Senate passed a sanctions bill by a vote of 97 to 2 a few weeks ago. According to press reports, House and Senate leaders have reached an agreement on the sanctions terms, which means that the Senate will pass the House version of the bill within the next few days and the measure will land on President Donald Trump’s desk for his signature.

Trump is stuck between a rock and hard place when it comes Russia sanctions. The bill came to punish Russia for its meddling in the 2016 presidential election, an issue that Trump has downplayed for fear that it would de-legitimize his presidency. The measure codifies in legislation what former President Barrack Obama imposed by executive order in the wake of Russia’s intervention in the US political process in 2016 and in Ukraine starting in 2013. That means that Trump would not be able to terminate the Obama policies with his own counter order. More than that, the legislation reduces the president’s discretion to modify the sanctions, a provision included in other sanctions regimes, leaving Russia sanctions in the hands of Congress.

The sanctions in the bill are directed at the the petroleum, natural gas, and pipeline sectors in Russia, and at civil nuclear projects by Russia anywhere around the world. It also aims to shut down trade in Russian sovereign debt and investment in the privatization of state-owned assets by Russia. The legislation includes menu of penalties for the president to choose from should he find that sanctionable conduct took place. These include prohibition on EXIM bank assistance and export licenses to sanctioned persons; limitations on loans violators could receive from US financial institutions; barring violators from US government procurement, foreign exchange, and banking and property transactions; and exclusion of corporate officers from the United States. Once the law was triggered, the president would be required to impose five or more of these penalties against an offending party.

If Trump vetoes the bill, it will raise a chorus of, What’s up with Trump and Russia?—an issue the president is trying to put to rest. If the president does veto, Congress will surely override him, handling Trump a political humiliation.

If he signs the bill, he will be limiting his own presidential power and discretion in dealing with Russia. Trump will also be signing off an an extension of Obama policies and the president is loath to continue almost any policy established by his predecessor.

The White House created a bit of political cover for itself when it said that the House bill modifies provisions of the Senate bill which concerned the president. In fact, the changes in the House bill reflect the lobbying efforts of the US oil and gas industry. The bill as currently crafted would restrict US firms from partnering with sanctioned Russian firms on projects in which those Russians owned at least 33 percent.

According to reporting in the Washington Post, a BP offshore natural gas project in the South Caspian Sea of Azerbaijan with Lukoil would be okay. But ExxonMobil’s joint venture with Rosneft to drill in the Arctic Ocean and Black Sea will be stalled. According to CNN, the bill also includes a carve-out so that a pipeline to transport oil from Kazakhstan through Russia to Ukraine could go ahead.

The White House has sent mixed messages on whether the president is inclined to sign the bill but the stronger signal until Monday was that he will do so. That’s also the near-unanimous opinion of inside-the-Beltway political pundits and it all seems to make political sense.

But on Monday, press secretary Sarah Huckabee Sanders was quoted as saying the president would “study that legislation and see what the final product looks like. ”

The president is known for his emotional outbursts—just look at his Twitter feed—and the stranglehold this legislation puts him in could provoke a veto. In other words, Trump is just keeping us guessing.


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