Treasury amends Russian sanctions to allow US tech exports

The Treasury Department on Thursday amended former President Obama’s most recent slate of Russian sanctions to allow U.S. technology companies to export products to Russia.

Treasury’s Office of Foreign Assets Control (OFAC) clarified that American tech companies can seek licenses from Russia’s Federal Security Service (FSB) to export their goods to Russia, so long as the products aren’t used in Crimea and don’t violate pre-existing sanctions.

The White House on Thursday denied that it is rolling back sanctions on Russia, put in place by Obama in response to Russian interference in the election. 

"I haven't eased anything," President Trump told reporters in the Roosevelt Room of the White House. 

Press secretary Sean Spicer argued that it’s “common for Treasury after sanctions are put in place to go back and look at specific carve outs for different industries or products and services.”

“It is a regular course of action that Treasury does often when sanctions are imposed.”

FSB, Russia’s domestic security service, was one of several entities sanctioned by Obama in December related to Russian hacking of Democratic political organizations and operatives. FSB must also approve certain encrypted technology imports to Russia per domestic law.

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The move was widely interpreted as President Trump relaxing sanctions on Russia.

But foreign policy experts insisted that the OFAC’s amendment was likely meant to clean up unintended consequences on American tech companies.

“This isn't Trump weakening sanctions,” said Eric Lorber, sanctions consultant at Financial Integrity Network, on Twitter. “Unintended consequences popped up, OFAC dealt with them.”

 

Sen. John McCainJohn McCainTrudeau, Trump speak for second night about US-Canada trade McCain: China has done ‘nothing’ on North Korea Trump administration weighing order to withdraw from NAFTA MORE (R-Ariz.), one of the fiercest proponents of increasing sanctions on Russia, also downplayed the change Thursday. 

"It's a technical fix," he told reporters, adding that his desire to increase penalties on Russia "has nothing to do with this."

Trump’s warmer stance on Russia — and his reluctance to accept intelligence officials’ assessment that President Vladimir Putin tried to help him win the White House — has led to widespread speculation that the new president will unravel Obama’s sanctions. 

The sanctions targeted two of Russia’s main intelligence organizations thought to be behind the hack of the Democratic National Committee (DNC) and others, as well as four individual officers and three companies who provided support to the operation.

The U.S. and European Union have also imposed sanctions against Russia for its 2014 military intervention in Ukraine.

The president and his senior advisers have been noncommittal on what the White House will do — but have not ruled out removing the sanctions in service of a better relationship with the Kremlin. Trump has argued that “only ‘stupid’ people” do not want a good relationship with Russia.” 

Thursday’s move — however technical — nevertheless fulfilled Russia hawks’ worst fears and gave ammunition to critics who say Trump is in the pocket of the Kremlin. 

“Russia attacked our democracy. It should be punished. Instead, President Trump is easing sanctions against its team of hackers, the FSB,” Rep. Eric Swalwell (D-Calif.) said in a statement. 

“Easing these sanctions allows Russia to sharpen its knives and import tools from the United States to hack us again. Congress must act swiftly to re-impose these sanctions so that those who attack America know there’s a price to pay.”

Democratic leader Nancy Pelosi (D-Calif.) said even suggestions from the White House that sanctions might be scaled back could have perilous consequences for NATO and U.S. allies in Europe. 

"What the president has to understand is that when you're president of the United States your words weigh a ton. So even with your administration putting out [the message], 'We're going to review that,' is really staggeringly dangerous," Pelosi said during a press briefing in the Capitol.

Lawmakers from both sides of the aisle have been pushing for more aggressive penalties. The targets of the sanctions were unlikely to travel to the U.S. or have any interaction with the U.S. financial system — making the economic bite of the measures limited.

Republicans have publicly urged Trump to maintain the limitations, in some cases threatening to step in if he choses to remove the measures. 

"For the sake of America’s national security and that of our allies, I hope President Trump will put an end to this speculation and reject such a reckless course," McCain said in a statement last week. "If he does not, I will work with my colleagues to codify sanctions against Russia into law." 

Majority Leader Mitch McConnellMitch McConnellLawmakers push one-week stopgap funding bill Overnight Finance: Inside Trump's tax plan | White House mulls order pulling out of NAFTA | New fight over Dodd-Frank begins Dem rep: Trump's tax plan as believable as 'magic, unicorns or Batman' MORE (R-Ky.) similarly said he was against removing any sanctions on Russia — but declined to comment on whether he would support McCain’s threat to codify existing measures. He was also hesitant to endorse adding new sanctions.

Trump has treated any suggestion that Russia intervened on his behalf as an attack on the legitimacy of his presidency, stoking widespread doubts that Obama’s sanctions would last long once he took office. 

To levy the sanctions, Obama broadened a 2015 executive order giving the president the authority to punish foreign actors who carry out cyberattacks against the U.S. — making it easy for Trump to unravel them. 

Although many had called for stronger measures, both Republicans and Democrats praised the sanctions. 

“Russia is our adversary, they are not our allies,” Rep. Will Hurd (R-Texas), a member of the House Intelligence Committee and a former CIA officer, said Friday morning on CNN. 

“The sanctions against Russia are an important tool, not only because of this most recent hacking, but because of their previous activity — going into Crimea, going into Syria.”

Trump has suggested the U.S. and Russia should work together to combat the Islamic State in Iraq and Syria (ISIS) in Syria — an idea that counter-terrorism policy experts on both sides of the aisle find dubious. 

“I don’t know Putin, but if we can get along with Russia that’s a great thing, it’s good for Russia, it’s good for us, we go out together and knock the hell out of ISIS, because that’s a real sickness,” Trump told Fox News on Friday night. 

While the U.S. backs moderate rebel groups in the fight against ISIS, Russia has been providing support to President Bashar al Assad. Obama had insisted that Assad must go.

A ceasefire in Syria brokered by Russia and the U.S. late last year failed, and coordination between the two countries is now limited to communication between the Defense Department and the Russian military to ensure the safety of aircrews. 

Putin has proposed a “broad, international terrorism coalition” to combat ISIS, which Moscow argues is its core focus in Syria. 

"I don't know who would deny that the fight against terrorism is the main priority for all of us," Foreign Minister Sergey Lavrov has said. 

But U.S. officials say Russia has achieved few counter-ISIS objectives and is only intervening to prop up Assad, thereby ensuring its influence in the region. 

 

- Jordain Carney contributed. 

- Updated at 2:52 p.m.