Sanction Russia, and Russia Only

Regardless of what one may think of the events that transpired in the 2016 election cycle, lawmakers on both sides of the aisle have come to one common conclusion: The Russian government actively sought to undermine the integrity of our election, and we must prevent them from ever doing it again. Efforts by members of both parties last year resulted in the passage of the Countering America’s Adversaries Through Sanctions Act, or CAATSA.

CAATSA gave the Treasury Department a few extra arrows in its arsenal to pierce the previously impervious veil around Kremlin wealth, forcing Russian oligarchs and the institutions they control to bend to the wrath of the US government. Unfortunately, however, it appears these efforts were not enough. Russian-sponsored actors continue to try using cyberattacks against election infrastructure and political organizations. Most recently, Microsoft cybersecurity professionals discovered Russian hackers trying to penetrate Senate offices and conservative policy groups ahead of the midterm elections.

Thankfully, Microsoft has released tools to help American political groups fend off Russian attacks. But more needs to be done, and our legislators understand that CAATSA wasn’t quite enough. This year, two bills have emerged in the Senate to give the U.S. greater sanctioning capabilities against Russia. They are called the DETER Act (Defending Elections from Threats by Establishing Redlines) and DASKAA (Defending American Security from Kremlin Aggression Act).

Both of these bills are born of zealous patriotism and goodwill. But each will fail to accomplish their goals without also harming Americans.

In an age of brute-force domestic politics, the United States now faces a foreign policy challenge that requires its governing institutions to delicately thread a needle. Our leaders must punish Russia so severely through economic means that it cannot bear the idea of interfering with our elections any further. However, we must be able to impose that level of sanctions without accidentally harming our own country’s businesses that operate around the world, and which come into contact with Russian enterprises.

Unfortunately, both the DETER Act and DASKAA would take a sledgehammer to American companies doing business abroad, while still not doing enough to cause the Russian government to end its election interference (much less other atrocious activities, like supporting the use of chemical weapons by Syrian dictator Bashar al-Assad, or assassinating people in Britain).

Taken together, the DETER Act and DASKAA would cause a great deal of pain for American manufacturers and exporters. They would prohibit US businesses from transporting goods via Russian railways. Unfortunately, that is the best way for American goods to reach landlocked Central Asian economies like Kazakhstan, Kyrgyzstan and others. These nations are growing export markets for the U.S., have been reliable partners supporting American efforts to curtail terrorism in Afghanistan, and they have not sought to undermine our elections. Neither these countries nor the American companies building economic ties in the region should be punished for Russian crimes.

These bills would also largely prohibit American energy companies from participating in joint ventures with Russian firms. This would force companies like Exxon and Chevron to lose billions of dollars they have invested not only in Russia, but elsewhere like Kazakhstan, Azerbaijan and even Vietnam. These massive enterprises underpin the long-term value of American energy companies, whose stocks are cornerstones of nearly every American pension and retirement savings account. Cutting them out of markets abroad would cause their stocks to be instantly devalued, harming the retirement investments of millions of Americans overnight.

Instead of causing harm to Americans, there are better alternatives. Congress could offer tax incentives to companies that compete against Russian state-backed firms in markets such as Central Asia, encouraging American companies to take market share from Kremlin competitors. Congress could also explicitly sanction oil and gas projects that are solely Russian owned and operated, forcing those companies to invite American ones to become joint venture partners, entitling American businesses (and shareholders) to a slice of profits that would otherwise be controlled by Moscow.

Of course, there are many complicating factors that would make such solutions hard to achieve. But we should strive to accomplish such objectives, even though they are hard, because the right thing for American policymakers to do is to support both the economic and political vitality of the American public. America can protect both its economy and elections. But acting to support one at the expense of the other would be immensely short-sighted.


Jack Anderson is a Eurasia-focused analyst at political risk consultancy Global Risk Insights.

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