New Russia sanctions bill puts US companies in the firing line
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Present-day relations with Russia are highly strained with the president and many representatives on Capitol Hill correctly calling for Russia and Vladimir Putin to feel the consequences of tough, punitive sanctions.

Russia makes no effort to hide its hostility toward the United States. Recent efforts to pry into our national elections, duplicitous commitments regarding global peace, the annexation of Crimea, and the brazen financing of some of the most dangerous regimes around the world mark actions that warrant hard-hitting measures, a strong warning to Putin to back off. 

The Senate’s version of a sanctions bill is not that. It’s short-sighted, ineffective and would punish American businesses far more than Russian companies. The measure, as its written, is far too broad and it unnecessarily threatens our own economic interests while jeopardizing the commercial diplomacy we have forged with some of our closest allies in Europe.

Hundreds of U.S. companies spanning almost every industry have significant investments in Russia.

Food service, automotive and technology sectors showcase several major American players. PepsiCo is the largest food and beverage company in the region. Ford has invested $1.5 billion with car company Sollers to manufacture cars for Russia and other countries. Caterpillar operates heavy equipment plants and General Electric has joint ventures to manufacture natural gas turbines. Even Russian rocket engines, former top secret military projects in the Cold War era, are exported to the United States as a part of the United Launch Alliance’s operations.

The U.S.-Russia Business Council has a membership of nearly 170 U.S. companies who conduct business in Russia. Many of these companies stand to lose significant revenue streams under Senate Bill S. 722. 

The Senate’s bill could easily damage critical relationships with key trading partners in Europe and potentially destabilize Europe’s energy supply. European allies have warned that unilaterally rolling out these sanctions without coordinating with other major economic players would risk the stability of the transatlantic sanctions coalition.

Germany and Austria have threatened retaliatory measures against the United States if it proceeds with the sanctions outlined in Senate Bill S. 722. Europe’s energy supply is wholly dependent on gas import infrastructure which also includes some Russian investment. Germany and Austria have accused the United States of using political issues to further their own commercial interests. 

If these international partnerships are halted, who stands to gain? Putin will inevitably forge new business alliances with his own allies and slice billions from American companies. We witnessed this with previous sanctions that negatively impacted Visa and MasterCard. These credit companies provided payment services to 90 percent of the Russian market but when Crimea-related sanctions were enacted, Putin developed a Russian payments system which ended Russia’s reliance on the American payments industry.

Sanctions intended to punish will only undercut American financial firms and insulate Russia from U.S. economic influence. 

Finally, the bill is arguably unconstitutional as it strips the president’s authority to enforce executive waivers — meaning the president would no longer have the power to ease or lift sanctions, given unforeseen consequences or if various sanctions pose a threat to national security. This bill would essentially cede any waiver authority to Congress, a move that would negate the president’s role dating back to the very first administration.

There is broad, bipartisan support for imposing sanctions against Russia. A new poll finds nearly 3 in 5 registered voters support action against Russia, giving Republicans and Democrats ample opportunity to work together on an effective sanctions bill. But Senate Bill S. 722 was so hastily written and sent to the Senate floor that the result is a risky, ineffective play.

While the United States postures to look tough against Russia, we are only punishing American companies and jeopardizing international business partnerships that need not be part of this mix. Under the bill’s hurried provisions, the United States could also lose a number of geostrategic assets in Russia. 

We risk emboldening an autocrat while weakening our allies and sowing discord. Congress should take additional time and deliberative care to get the sanctions legislation right. Any bill passed must be a comprehensive solution which properly considers aspects of global trade, American business interests, and national security.

Bill Walton is chairman of the board for the Council for National Policy Action, a conservative educational nonprofit.

The views expressed by contributors are their own and not the views of The Hill.