Defense and security firms named in US's latest Russia sanctions list

Defense and security firms named in US's latest Russia sanctions list
The US Congress has received a list of Russian companies that could face sanctions in 2018, which includes defense-related organisations as well as state security agencies / Wikimedia Commons
By bne IntelliNews October 27, 2017

The US State Department has provided the US Congress with a recommened guidance list of companies that could be included in the next raft of US sanctions against Russia, the department's spokeswoman Heather Nauert said on October 26. 

The list itself is published by the New York Times and includes 33 defense industry related companies as well as state security agencies, such as Federal Security Bureau (FSB), the Foreign Intelligence Service (SVR), the St Petersburg-based Special Technology Centre and Zorsecurity. It also includes state technology corporation Rostec, Russian Helicopters, Sukhoi, MiG, Tupolev aircraft builders, United Shipbuilding Corporation, United Aircraft Corporation, and other defense-related agencies and companies.

Some of the companies of the Russian defence complex were already on the previous list for sanctions following Russia's 2014 annexation of Crimea and the "anti-hacking" sanctions introduced by President Barak Obama shortly before the end of his term.

The new sanctions are set to take effect on January 29, 2018, in particular by toughening the visa regime and limiting financial market activities. The guidance provided by the State Department specifies that only "significant transactions" with the entities on the list, to be determined on a case-by-case basis, could trigger sanctions. Factors that will be considered in deciding whether to trigger the sanctions include whether the transaction has any significant impact on the US's national security and foreign policy interests.

In August, US President Donald Trump signed into law a bill imposing tougher sanctions on Russia, North Korea and Iran, that also limits his own ability to end those sanctions. This ended weeks of uncertainty and opened a new chapter in the sanction regime against Russia.

The Kremlin fumed over the last sanctions and the changing stance of the US president, who had previously slammed sanctions as harmful and boasted he would make ”deals” with Russia. President Vladimir Putin reacted angrily by ordering home 755 American dimplomats, prompting talks of Cold War 2.0.

On October 26 Kommersant daily reported that the Russian government is rushing in a new specialised financing body for the military industry, one that would be shielded from sanctions. Reportedly it would have to manage the RUB23 trillion armament program without putting major local banks such as Sberbank, VTB and state development bank Vneshekonombank under threat.

Most recently Moody's Investors Service said that international sanctions remains the main threat for the stable outlook of most of Russian key corporate areas. 

The latest sanctions package passed by the US could adversely affect the credit rating of the energy sector, and particularly that of gas major Gazprom, Moody's warned.

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