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Friday 19 October 2018

US takes aim at Putin’s allies in Russia with new sanctions

Seven Russian tycoons have been targeted, along with 17 officials and a dozen Russian companies.

Vladimir Putin and Russian metals magnate Oleg Deripaska (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo/AP)
Vladimir Putin and Russian metals magnate Oleg Deripaska (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo/AP)

By Josh Lederman, Associated Press

The United States has punished dozens of Russian oligarchs and government officials with sanctions that took direct aim at President Vladimir Putin’s inner circle, as President Donald Trump’s administration tried to show he is not afraid to take tough action against Moscow.

Seven Russian tycoons, including aluminium magnate Oleg Deripaska, were targeted, along with 17 officials and a dozen Russian companies, the Treasury Department said.

Trump administration officials cast it as part of a concerted, ongoing effort to push back on Mr Putin, emphasising that since Mr Trump took office last year, the US has punished 189 Russia-related people and entities with sanctions.

Rather than punishing Russia for one specific action, the new sanctions hit back at the Kremlin for its “ongoing and increasingly brazen pattern” of bad behaviour, said the officials.

The officials ticked through a list of complaints about Russia’s actions beyond its borders, including its annexation of Crimea, backing of separatist rebels in eastern Ukraine, support for Syrian president Bashar Assad, and cyber-hacking.

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Russian metals magnate Oleg Deripaska (Alexander Zemlianichenko/AP)

Above all else, Russia’s attempts to subvert Western democracy prompted the US sanctions, officials said, in a direct nod to concerns that the US president has failed to challenge Mr Putin for alleged interference in the 2016 election that brought Mr Trump to power.

Mr Deripaska, whose business conglomerate controls assets from agriculture to machinery, has been a prominent figure in special counsel Robert Mueller’s Russia investigation over his ties to former Trump campaign chairman Paul Manafort. The Treasury Department said Mr Deripaska was accused of illegal wiretaps, extortion, racketeering, money laundering and even death threats against business rivals.

On the London Stock Exchange, global depositary receipts of En+, an energy company majority-owned by Mr Deripaska, dropped by 19% on news of the sanctions. Mr Deripaska’s conglomerate, Basic Element, said it regretted the sanctions and was analysing them with its lawyers.

Mr Putin’s government dismissed the sanctions as “absurdity,” arguing that the US was punishing companies that have longstanding business ties to the US. The Russian Foreign Ministry said the US was “striking at ordinary Americans” by jeopardising “thousands of jobs”.

“American democracy is clearly degrading,” the ministry said. “Of course, we will not leave the current and any new anti-Russian attack without a tough response.”

To the dismay of Mr Trump’s critics and of Russia hawks, the president has continued to avoid directly criticising Putin himself and recently invited the Russian leader to meet with him, possibly at the White House. Yet in recent weeks Trump’s administration has rolled out a series of actions — including several economic and diplomatic steps — to increase pressure on Putin and those presumed to benefit from his power.

“Nobody has been tougher on Russia than I have,” Mr Trump said at a news conference on Tuesday.

Yet even as it rolled out the new penalties, Mr Trump’s administration left open the possibility of “a good relationship with Russia” in the future. And at the White House, spokeswoman Sarah Huckabee Sanders said discussions with Moscow about a Trump-Putin summit would not be called off.

“Not at all,” Ms Sanders said. “We’ll continue.”

Those being punished are not necessarily involved in the Russian actions in Syria, Ukraine or elsewhere that have drawn consternation from the West. But officials said the goal was to put pressure on Mr Putin by showing that those who have benefited financially from his position of power are fair game.

The target list includes some who are closely tied to Mr Putin himself, including top-tier officials involved in Kremlin decision-making and heads of the top state-controlled business entities. Yet others on the list are far from the Kremlin’s orbit, including some who long have fallen out of favour or hold technical positions.

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Kirill Shamalov (Kommersant Publishing House/AP)

Targets include:

— Kirill Shamalov, who is reportedly Mr Putin’s son-in-law, married to his daughter Katerina Tikhonova, although neither Mr Putin nor the Kremlin have acknowledged that she is his daughter.

— Igor Rotenberg, the son of Arkady Rotenberg, a friend of Mr Putin’s since they were teenagers.

— Andrey Kostin, named among government officials, heads the nation’s second-largest bank, VTB, which is controlled by the state.

— Alexei Miller, the longtime head of Gazprom, the state-controlled natural gas giant. Both Mr Miller and Mr Kostin are longtime key members of Mr Putin’s team.

A state-owned arms-dealing company, accused by the US of selling to Assad, was also targeted, along with a subsidiary bank. Many other targets were associated with Russia’s energy sector, including parts of Gazprom.

The sanctions freeze any assets that those targeted have in US jurisdictions and bar Americans from doing business with them. But the administration said it would give guidance to Americans who may currently have business with them about how to wind down that business and avoid running afoul of the sanctions. Some, but not all, of the individuals sanctioned will also be prohibited from entering the United States.

The US also has punished Russia for other troubling activity, including its alleged involvement in the poisoning an ex-spy with a military-grade nerve agent in Britain. In tandem with European allies, the Trump administration expelled dozens of Russian diplomats and shut down the Russian consulate in Seattle.

Press Association

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