Putin signs Russian ‘counter-sanctions’ into law

Russian President Vladimir Putin answers questions from journalists during a joint news conference with Bulgarian Prime Minister Boyko Borissov following their talks at the Kremlin in Moscow, Russia May 30, 2018. Pavel Golovkin/Pool via REUTERS

MOSCOW (Reuters) – Russian President Vladimir Putin on Monday signed into law counter-sanctions legislation that was drawn up by lawmakers in response to U.S. sanctions imposed on Russia in April.

The legislation gives the president, among other things, the power to sever ties with unfriendly countries, and to ban trade of goods with those countries.

However, it has been watered down since it was first conceived by lawmakers in response to the new round of U.S. sanctions on Russian businesses.

Lawmakers initially proposed large-scale restrictions on U.S. goods and services, ranging from food and alcohol to medicine and consulting services.

The law was one of two items of legislation. In the second, lawmakers debated making it a crime punishable by jail for a Russian citizen to comply with the U.S. sanctions.

Russian and foreign business lobbies had said any such law would effectively force firms to choose between doing business with Russia and having dealings with the rest of the world.

Last month Putin said any retaliation against western sanctions must not hurt the Russian economy or partners that do business in Russia.

(Reporting by Andrey Ostroukh; Writing by Tom Balmforth; Editing by Toby Chopra and David Stamp)

U.S. imposes major sanctions on Russian oligarchs, officials

FILE PHOTO: Russian tycoon and President of RUSAL Oleg Deripaska listens during the "Regions in Transformation: Eurasia" event in Davos, Switzerland January 22, 2015. REUTERS/Ruben Sprich/File Photo

By Lesley Wroughton and Patricia Zengerle

WASHINGTON (Reuters) – The United States imposed major sanctions on Friday against 24 Russians, striking at allies of President Vladimir Putin in one of Washington’s most aggressive moves to punish Moscow for what it called a range of “malign activity,” including alleged meddling in the 2016 U.S. election.

The action, taken under pressure from the U.S. Congress, freezes the U.S. assets of “oligarchs” such as aluminum tycoon Oleg Deripaska, a close associate of Putin, and lawmaker Suleiman Kerimov, whose family controls Russia’s largest gold producer, Polyus.

The sanctions are largely a reply to what U.S. intelligence agencies say was Russian interference in the presidential election, although the Treasury Department painted them as a response to a series of adversarial actions by Moscow.

U.S. President Donald Trump has been under fire for not taking strong action against Russia after a series of diplomatic disputes reminiscent of the Cold War era and the sanctions could complicate his hopes for good relations with Putin.

The sanctions are aimed at seven Russian oligarchs and 12 companies they own or control, plus 17 senior Russian government officials. They freeze the U.S. assets of the people and companies named and forbid Americans in general from doing business with them.

Russian Security Council Secretary Nikolai Patrushev said, however, Moscow’s contacts with the U.S. government would not be brought to an end by the sanctions. Russia denies interfering in the U.S. election.

They could hurt the Russian economy, especially the aluminum, financial and energy sectors, and are a clear message to Putin and his inner circle of U.S. displeasure.

In announcing the sanctions, Treasury Secretary Steve Mnuchin said in a statement, “The Russian government operates for the disproportionate benefit of oligarchs and government elites.”

He said Moscow “engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities.”

Shares in Russian aluminum producer Rusal were down 2.2 percent on Moscow’s exchange after the company was named on the sanctions list.

Russian state companies under the U.S. sanctions will receive additional government support, Russian Industry and Trade Minister Denis Manturov said, according to Interfax.


U.S. intelligence agencies last year accused Russia of using hacking and disseminating false information and propaganda to disrupt the 2016 elections and eventually try to ensure Trump defeated Democratic candidate Hillary Clinton.

Special Counsel Robert Mueller is investigating whether Trump’s election campaign colluded with Russia, something that Trump denies. Mueller has indicted 13 Russians and three organizations in his probe.

Elizabeth Rosenberg, a former senior U.S. Treasury Department official who is now a senior fellow at the Center for a New American Security think tank, said the sanctions were significant, although there is more to do.

“I’m impressed by how aggressive this is,” she said. “I thought it would be serious and this is certainly a very serious statement of U.S. policy.

“I would hasten to say that Russia hawks may welcome this but wouldn’t find it satisfying. And by no means would this be the sum total of what the U.S. government should do to advance its concerns.”

Trump has faced fierce criticism – including from fellow Republicans – for doing too little to punish Russia for the election meddling, aggression in Ukraine, and support of President Bashar al-Assad in Syria’s civil war.

He angered many members of Congress by failing for months to implement sanctions on Russia that lawmakers passed nearly unanimously last year.

But pressure for the United States to take action against Russia, especially from U.S. lawmakers, has been increasing.

Putin’s government has been blamed for the poisoning of a former Russian double agent living in Britain last month and the United States and several European states announced plans to expel more than 100 Russian diplomats in response.

In February, the White House blamed Russia for the international “NotPetya” cyber attack, which has been called the most destructive and costly in history.

On March 15, the Trump administration said it would impose sanctions on 19 people and five entities, including Russian intelligence services, for cyber attacks stretching back at least two years.

Friday’s sanctions were authorized by the Countering America’s Adversaries Through Sanctions Act, known as CAATSA, which Trump reluctantly signed into law in August.

Chris Painter, the former top cyber diplomat at the U.S. State Department, said the latest sanctions are unlikely to deter the Kremlin unless Trump formally condemns Putin.

Painter, who left government last year, criticized Trump’s rhetoric toward Putin – including a congratulatory call last month when Putin won another presidential term in a widely criticized election.

“We need the head of our country saying, ‘This is not going to happen,'” Painter said. “That’s a critical piece.”

(Reporting by Lesley Wroughton and Patricia Zengerle; Additional reporting by Doina Chiacu, Tim Ahmann and Susan Heavey; Writing by Alistair Bell; Editing by Yara Bayoumy and Bill Trott)

Putin faces dilemma after vote win; How to prolong a system based on himself

Russian President Vladimir Putin gestures as he addresses students during his visit to the German Embassy school in Moscow, Russia,

By Andrew Osborn

MOSCOW (Reuters) – Vladimir Putin appears politically invincible after Russia’s ruling party won its biggest ever parliamentary majority this month. But he faces an increasingly pressing dilemma: How best to ensure the survival of a system built around himself.

With a presidential election due in March 2018, Putin, 63, must decide whether or not to run again. He must also decide whether to bring that vote forward to 2017 to reset the system early to hedge against the risk of a flat-lining economy.

Few outside his tiny coterie know what he will do. Most Kremlin-watchers are sure he will run again and win, delaying the successor question until 2024. Others say he may surprise.

On the face of it, staying on looks to be an obvious choice. Polls give Putin an approval rating of about 80 percent, the ruling United Russia party just won 76 percent of seats in parliament, and his annexation of Ukraine’s Crimea sealed his savior-of-the-nation image in many Russian eyes.

But beneath the surface, Putin’s problems are piling up. They include what is forecast to be an anemic economic recovery, the lack of an obvious successor, voter apathy, his own complaints about the physical demands of the job, and the risk of destabilizing clan infighting inside the system.

Increasingly, it also seems that the only way Moscow can reset ties with the West would be for Putin to stand aside. The United States and European Union imposed economic sanctions over Russia’s actions in Ukraine in 2014 and thus far there has been little sign of a lifting of trade restrictions.

Nikolai Petrov, a political analyst at Moscow’s Higher School of Economics, believes Putin could preserve the system’s legitimacy if he handed over to a handpicked successor in 2018.

“It’s a possible scenario,” Petrov told Reuters.

He said he was skeptical Putin would choose that path, however, despite being under pressure to find alternative ways of maintaining broad support for the system beyond nationalism and foreign military adventures.

“Putin is a hostage of his own popularity,” said Petrov.

People who know Putin say he is growing weary. In an unguarded moment picked up by microphones last year, he was heard complaining about how little he slept.

One former high-ranking official close to the Kremlin said Putin, in power either as president or prime minister for nearly 16 years, was fatigued.

“Putin is tired, he’s getting older,” the source, who declined to be named, told Reuters.

Dmitry Gudkov, a liberal opposition politician who lost his seat in this month’s elections, told Reuters Putin looked certain to run again regardless because he was afraid stepping down might leave him vulnerable to prosecution for his actions in Ukraine.

“With a lot of enemies both inside and outside the country, he’s starting to feel less secure. It doesn’t look like a time when he’d give up control,” said Gudkov.

Putin is fond of a surprise though. Many thought he would not step down from the presidency in 2008, but he did, albeit to make a triumphant return to the office four years later.

The source close to the Kremlin said the outcome of the U.S. presidential election and how the winner dealt with Russia initially was likely to influence Putin’s decision.

“Putin is rather taken by global politics and won’t run unless ‘a firm hand’ is needed,” said the source. “Otherwise he will leave it to (Prime Minister Dmitry) Medvedev.”

Democratic candidate Hillary Clinton would take a tough line with Moscow, unlike Republican contender Donald Trump who has said he wants to reset ties with Russia, people close to the Kremlin believe.


The economic outlook is bleak. More than two years after the West imposed sanctions, their impact appears to be waning and the economy is expected to return to modest growth next year.

A continuing dearth of foreign investment, something that has played a major role in kick-starting growth in the past, means the recovery is likely to take years however and growth is forecast to reach only around 0.5 percent in 2017 and stay that way for a prolonged period.

Maintaining a semblance of popular support amid signs that growing numbers of voters believe their participation in elections is an empty ritual is becoming harder too.

Turnout at the Sept. 18 vote fell to a post-Soviet low.

And while there are no signs of serious unrest among the elite, Putin’s allies are starting to worry that a threat might emerge from within the system one day.

“Our state is always destroyed from the top and from inside,” Dmitry Olshansky, a columnist for the pro-Kremlin Komsomolskaya Pravda tabloid, wrote after the election, saying the appearance of the state’s victory might be deceptive.

Such fears and the need to reshuffle officials to create the impression that the system is renewing itself help explain why Putin has replaced a slew of senior Kremlin, security and regional officials in recent months, a process seen continuing.


Putin will have to make his mind up about the timing of the next presidential election soon.

Alexei Kudrin, an economics adviser to the government and a former finance minister, suggested bringing the vote forward to next year from 2018, saying that would allow the authorities to win a new mandate to launch tough reforms.

Kudrin, a Putin ally, did not say who he thought should stand, but the country’s elite assumed he was talking about Putin.

The finance ministry fueled speculation that such a decision has already been taken, publishing a letter in July talking about a presidential vote in 2017.

The same source close to the Kremlin said there was now a more than 50 percent chance of an early presidential election.

Political analyst Petrov said he thought early elections were highly likely unless Trump won the U.S. presidency and lifted sanctions.

A different source close to the Kremlin said:

“By 2018, the economy won’t be any better and the population will be weary. There will be more negativity around, Putin’s rating will be falling, and our financial reserves will be running out,” the source, who also declined to be named, said.

“All this backs the argument for early elections.”


Even if, as is widely expected, Putin decides to run for president again, he will need to begin preparing a successor.

After years of fawning state TV coverage, many voters say they struggle to imagine political life without Putin.

“The president will find himself in a trap,” the Carnegie Moscow Center said this month. “Legitimacy bestowed on a charismatic leader is not automatically passed down to his successors.”

The only other politician regularly given prominence on state TV is Medvedev, the prime minister. He stood in as president from 2008-12 to help Putin skirt a constitutional ban on anyone serving more than two back-to-back presidential terms.

He is a potential successor, though many voters find his style too soft.

Speculation about other possible successors ranges from the defense minister to the governor of the central bank to the new and unknown head of the presidential administration.

One new name to have emerged after the elections is Vyacheslav Volodin, the former deputy head of the presidential administration. Putin has said Volodin should be the new speaker of parliament, a job that would give him a high public profile.

(Additional reporting by Elena Fabrichnaya, Katya Golubkova and Daria Korsunskaya; Editing by Janet McBride)