Bipartisan Group of Senators Introduces Draft Bill to Expand U.S. Sanctions against Russia

On January 11, 2017, a bipartisan group of senators introduced a draft bill that, if adopted, would cement and significantly broaden U.S. sanctions relating to the Russian Federation and Ukraine.

The authors have styled the bill as the “Counteracting Russian Hostilities Act of 2017,” but the scope of the bill goes well beyond recent allegations of cyber activities said to have targeted the U.S. presidential election.  The bill appears to have broad support, but the position of the Senate Republican leadership is not yet clear, nor is that of the incoming Trump Administration.  It is theoretically possible, though not likely, that the bill could be enacted during the last days of the Obama Administration.  Amendments prior to enactment are also possible.

If adopted, the proposed legislation would codify into law existing sanctions on the Russian Federation, preventing the incoming Trump Administration from unilaterally terminating these sanctions. The bill would also create significant new secondary sanctions targeting transactions relating to core sectors of the Russian economy, regardless of the jurisdictions involved or the currencies used.  Persons of any nationality engaging in such transactions could find themselves on U.S. sanctions lists, limiting or prohibiting their interaction with the United States economy and financial system.

The targeted transactions include:

• investing in or providing  goods and services to oil, gas, and pipeline projects in the Russian Federation, or the civil nuclear sector
• investing in or facilitating the issuance of new debt by the Russian Federation or any state-owned or state-controlled entity
• investing in or facilitating investment in Russian state-owned assets being privatized. 

Other provisions target human rights abuses, entities involved in cyberattacks on the United States, Russian defense and intelligence agencies, and Russia-backed media outlets.