© AFP 2019 / Tobias Schwarz
“Hell of sanctions” is returned in the information field and the legislative agenda of the US. Under attack from senators and congressmen — rouble state bonds of Russia, oil companies and pipelines. As a “bonus” in the US can officially announce that Russia is “a country — sponsor of terrorism” with all the ensuing consequences of the sanctions.Due to the fact that in the American Parliament are at different stages in the consideration of some of the sanctions initiatives against our country, sometimes difficult to keep track of which segments of the Russian economy and financial sector may be under pressure. If you look at all the sanctions landscape from a bird’s flight, it is possible to allocate three packages of anti-Russian measures. The first package involves indirect sanctions against “Northern stream — 2”, and he, according to American media, was included in the military budget of the States for 2020, which passed a vote in Congress on Wednesday. Us lawmakers hesitate to impose sanctions on buyers of Russian gas, or specifically against “Gazprom”, but decided to hit the European companies whose unique ships-the pipe layers are now engaged in laying the “Nord stream — 2” off the coast of Denmark. The calculation is that the threat of blocking their dollar operations and capabilities of the United States or American companies will force them to withdraw from the project, thereby forcing “Gazprom” to the full preservation of gas transit through Ukraine, and on favorable conditions for Ukraine.However, the Wall Street Journal reports: “the Representative of “Gazprom” said that if Allseas (the Swiss owner of pipelayers. — Approx. ed.) will be forced to leave the project, “Gazprom” itself completes the job, adapting their own vessels and vessels owned by Russian contractors.”
Second sanctions package — is also a blow to the “Nord stream — 2”, but in a more direct option. In the case if this bill passes a vote in Congress and the Senate and then be signed by trump, under the sanctions fall the so — called sponsors of the Russian gas pipeline that is a European company that financed its construction. The effectiveness of these measures, there are doubts due to the fact that the pipeline is nearly finished and all necessary financing involved.
Moreover, when a similar project was considered by the Senate in 2017, official Berlin has not just condemned him, but was threatened with “retaliatory measures”. Reuters reported: “Germany has threatened to retaliate against the United States, if new sanctions against Russia, proposed by the Senate, will lead to the punishment of German firms. <…> Minister of economy of Germany Bridget cipres said that Berlin will have to think about countermeasures, if trump would support the plan.”There is no reason to believe that the position of the German authorities has changed.The third sanctions package is the most “hellish sanctions” about which so like to speak the most Russophobia representatives of the Republican party of the United States. The official name of the bill is “About protecting American security from the aggression of the Kremlin” (DASKA), and it can be considered in the coming weeks. Reuters reports on the objectives of the bill: “the Proposed targeted sanctions against Russian banks, supporting the efforts to intervene in elections abroad, cybertecture Russia; the new public debt; persons who are deemed to “directly or indirectly contribute to illegal and corrupt activities on behalf of (the President of Russia Vladimir Putin)”. The bill also provides a number of strict measures against Russian oil and gas sector, which accounts for about 40 percent of incomes of the Russian Treasury, including sanctions against persons providing goods, services or financing for the development of the oil industry of the country.”
Not to mention that, from the point of view of American legislators, all of the above measures — this is self-defense against Russia. To paraphrase the famous joke, “Russia threatens NATO, is increasingly bringing its territory to its bases”, we can say that the congressmen and senators sincerely perceive any oil field that does not belong to US, as a personal affront, a violation of universal justice and a threat to national security. Use against Russia the same methods, what the USA used to solve the “oil problem” in other countries (e.g., Syria), it is impossible because the Russian army, Navy and the nuclear triad. So we have senators and congressmen to look for workarounds in the form of sanctions.However, the most acute emotions in American politicians and the expert community are cause for sanctions against the oil sector of Russia and against the Russian national debt. The proponents of these “infernal sanctions” hope that the ban on Russian government bonds will cause the demand for the ruble on the currency market, and the consequences of this pressure on the foreign exchange market will lead to a weakening of the Russian currency.
Panic in the financial markets and difficulties with the exchange rate probably are the instruments with which the authors of the sanctions hope to break the Russian economy and society. This theory has several problems. Chief among them: Russia (and it’s hard to understand American lawmakers, some of which are poorly oriented in the geography of the planet, not to mention the history and the economy of other countries) is not a typical “third world country”, for which disabling of external financing through blocking investment in government bonds is a disaster. Most of the problems associated with the blocking of external financing of the private sector in international markets, our country experienced in the years 2014-2016, and the problem of the state, depending on external borrowing Russia has decided in the 2000s.
This does not mean that “hell’s sanctions” will not have any impact on the Russian financial and currency markets. The effect will be. But the expectations of Americans in terms of getting Russia to economic hell is clearly not justified. Moreover, the idea of “hell” sanctions old. She really likes one particular category of senators and congressmen, specifically, the Russophobes who don’t understand Finance.Treasury Secretary Steven Mnuchin not one of those. He also does not like Russia, but he is a financier and now, two years does not use its sanctions law and actively prevents parliamentarians to pass laws that could impose such sanctions mandatory. It is worth Recalling that in response to one of the past attempts to impose “sanctions are hell” Mnuchin wrote to congressmen and senators with a letter that explained his position.His arguments will sound very unpleasant for those who still believes that the United States can act with impunity and that the lack of financial sanctions against Russia — only a question of the mythical American compassion. In fact, it is the result of some administration officials trump real knowledge and instinct of self-preservation: “due to the fact that the economy of Russia has extensive links real and financial sectors with the global business and investors, the impact of sanctions will not be limited to Russian authorities and business. In particular, the extension of sanctions can hinder the competitiveness of large American (funds and banks. — Approx. ed.), asset managers, and potentially can have negative side effects on the global financial markets and for financial companies, although competitive distortion can be partially mitigated if the EU to impose similar sanctions. The extension of US sanctions on transactions with the new Russian sovereign debt, without appropriate measures, the EU and other partners, the United States can undermine efforts to preserve the unity of the sanctions against Russia. Given the scale of the Russian economy, its interconnectedness and the prevalence in the global asset markets, as well as probable excessive adherence to global firms of U.S. sanctions, the magnitude and scope of consequences of increased sanctions on sovereign debt and derivatives is unclear, and the effects can be dangerous both for the Russian Federation as well as American investors and companies.”
Financial English Russian — experience of the Secretary of the Treasury are as follows: if sanctions of this kind will not be administered and the EU (and the EU even doesn’t want to do anything like that), Washington will face not only the retaliation from the Russian side, but also with the fact that investors — that is the ultimate foreign buyers of Russian bonds — just leave us banks and investment funds in the European, Japanese, Chinese or offshore financial institutions, to continue to have access to Russian assets. Moreover, Russian assets are now even more attractive for international investors than they were in 2018, because only in emerging markets (and especially in our country) the European investors can still expect a positive and high return on investment in government bonds. So “hell’s sanctions” will likely result in short term discomfort for Russia, for which the us financial sector will pay for loss of money and customers.Perhaps the “hell of sanctions” and the entire set of measures against the “Nord stream — 2” will indeed be introduced. However, even American officials reasonably doubt their effectiveness. No wonder for the past five years, the most notorious deals of this kind are stuck on the sidelines of the Congress and Senate or fall under the carpet in the presidential administration.
But if us lawmakers decide to hurt the American financial sector and to give additional impetus to the process of freeing the EU from excessive us custody in the sphere of Finance and energy, then that clearly should not worry.Ivan Danilov