Bridging the credibility gap on Russian sanctions

In late November, while many of us in the United States were still in recovery mode after binging on turkey and Netflix, Russia seized three Ukrainian vessels passing through the Kerch Strait on their way to the Sea of Azov. Vessels and crew alike were then taken to Crimea — the peninsula that Russia seized from Ukraine in 2014, prompting U.S. and European Union sanctions — where the 24 sailors await trial. This all follows what E.U. security minister Julian King describes as a year-long disinformation campaign by Moscow meant to prepare the public to accept Russian hostility in the Azov.

Ukrainian Foreign Minister Pavlo Klimkin called on the E.U. to go beyond simply renewing existing sanctions against Russia and impose fresh measures. E.U. representatives responded by offering to provide financial aid to areas of Ukraine destabilized by Russian belligerence, a bit like offering victims of a burglary money to fix their broken window and clean the carpets while the perpetrator paces nearby looking for somewhere to plug in his new television.

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The E.U. response is both frustrating and understandable. The unanimous consent among member states required to impose and expand E.U. sanctions is notoriously difficult to achieve, and with Brexit looming like a zeppelin above all the other urgent issues Europe is grappling with, time and political capital are in short supply.

Not so in the United States, at least when it comes to Russia. Last year, Congress quickly drafted and passed the Countering America’s Adversaries Through Sanctions Act of 2018, or CAATSA, a piece of legislation that inspired fear in capitals around the world by setting up a potential sanctions domino effect among foreign firms. Fear became outright panic in April of this year when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on a slate of Russian oligarchs and companies they owned or controlled. Had OFAC not issued narrow authorizations allowing some activities with those entities to continue, the dominoes CAATSA arranged might have fallen.

Now it looks like we soon might be tempting fate again. Congress seems intent on more Moscow sanctions. One bill, the Defending Elections from Threats by Establishing Redlines Act of 2018 (DETER), aims the most severe sanctions at OFAC’s disposal at Russia’s biggest banks and energy companies and sets a hair trigger for imposition. The idea is that the financial doomsday device will make the Kremlin think twice before interfering in any more U.S. elections. Dr. Strangelove approves.

There are questions galore worth asking about this approach, but the answer to almost all of them is the same: the credibility gap. Many in Congress simply do not trust President TrumpDonald John TrumpSupreme Court comes to Trump's aid on immigration Trump is failing on trade policy Trump holds call with Netanyahu to discuss possible US-Israel defense treaty MORE to be tough on Russia. This, despite the world-upending oligarch designations in April.

International partners and allies also are subjects of skepticism. While many in Washington are sympathetic to E.U. political dynamics, a frequent talking point about new sanctions not being warranted, absent further escalation from Russia, does not play as well. Considering everything the Kremlin has done to consolidate its hold on Crimea — building the Kerch Strait Bridge, taking over ports, circumventing E.U. sanctions to transfer turbines to power plants on the peninsula — one can see why. And that’s leaving aside all the broken ceasefires, the 2017 cyber attacks on Ukrainian institutions, and, of course, the recent fracas in the Azov.

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Addressing the credibility gap starts with diplomatic engagement among the U.S. executive branch, the European Union, and other partners and allies in which all sides frankly acknowledge three things. The credibility gap and its consequences are the first. The second is that, with respect to Crimea, consolidation is escalation, and Russia never stopped escalating after seizing the territory in 2014. The third is that failing to regularly refresh sanctions on a target with significant resources is tantamount to relieving pressure, which only encourages more bad behavior. Taken together, these last two mostly explain the current state of the moribund Minsk agreements to which E.U. sanctions are tied.   

Acknowledging all of this sets the table for working-level discussions about what significant new measures might be possible. These will be difficult conversations laden with compromise. The chance of them bearing fruit anytime soon is slim. But that they would be happening at all might help reduce the credibility gap by at least a small margin if Congress were kept abreast.

Legislators who feel included in deliberations about how most effectively to employ sanctions are more likely to take other views into account when drafting laws. This is Relationships 101: everyone benefits when everyone feels heard.    

Some might argue that no matter what the president and international partners do, Congress will not share the reins when it comes to Russia sanctions. We should all hope that isn’t the case. As an OFAC alumnus and now practicing sanctions attorney, I can attest that sanctions work best when governments have time and space to harmonize and tailor them. The alternative, in which solidarity and calibration are mostly afterthoughts, hurts us as much as the target of our sanctions, if not more. Then it’s all hands on deck again at the departments of Treasury and State, bailing water while Vladimir Putin looks out from Moscow at where next to hoist the black flag.       

Michael Dobson is a former senior sanctions policy adviser in the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), where he was one of the government’s leading sanctions officials in the development and implementation of U.S. sanctions policy toward Russia and throughout the Western Hemisphere. He is now a Washington-based member of the national security practice group at a global law firm and represents clients in sanctions matters, including some related to Russia.