As U.S. President Donald Trump pursues his goal of improving relations with Russia, sanctions may be a stumbling block. Since 2014, the U.S. has imposed travel bans, asset freezes and finance and trade restrictions against hundreds of Russian individuals and companies, part of a multinational effort to punish President Vladimir Putin’s government for alleged trouble-making beyond its borders and online. The U.S. Congress went so far as to limit Trump’s power to ease sanctions on his own.

The Trump-Putin summit in Helsinki in July hasn’t led to a reduction in tensions between the U.S. and Russia. While Congress weighs draft legislation proposing more sanctions that target Russia’s sovereign debt and its largest banks, the U.S. State Department announced new restrictions to punish Putin’s government for the nerve-agent attack on former spy Sergei Skripal and his daughter in the U.K. Russia denies involvement in the poisoning.

1. What U.S. sanctions are in place against Russia?

Almost 700 Russian people and companies are under U.S. sanctions. Individuals face limits on their travel and freezes on at least some of their assets, while some top Russian state banks and companies, including oil and gas giants, are effectively barred from getting financing through U.S. banks and markets. They include billionaires such as Oleg Deripaska and Viktor Vekselberg; close political allies of Putin including his former chief of staff, Sergei Ivanov, and Dmitry Rogozin, a deputy prime minister from 2011 to 2018; and corporate titans such as Rosneft PJSC, Gazprom PJSC, Sberbank PJSC and VTB Group.

2. Why were the sanctions imposed?

Most were imposed by executive order of Trump’s predecessor, Barack Obama, starting in 2014 after Russia annexed the Ukrainian peninsula of Crimea and supported a separatist uprising in eastern Ukraine. More were added after U.S. intelligence agencies concluded that Moscow interfered in the 2016 presidential election, won by Trump. In April, another round of measures in response to Russia’s “malign activity around the globe” hit Deripaska’s United Co. Rusal hardest, limiting its access to the $140 billion global aluminum industry.


The latest U.S. measures are required under the 1991 Chemical and Biological Weapons Control and Warfare Elimination Act, which has only been used previously against North Korea and Syria, and mandates punishment of countries that use chemical weapons in violation of international law. An initial wave of sanctions takes effect Aug. 22 and will limit exports to Russia of U.S. goods and technology considered sensitive on national security grounds, according to the State Department.

More sweeping measures may follow 90 days later, in November, including a downgrading in diplomatic relations, blanket bans on the import of Russian oil and exports of “all other goods and technology” aside from agricultural products, as well as limits on loans from U.S. banks. The U.S. also would have to suspend aviation agreements and oppose any multilateral development bank assistance. The president could give exemptions by declaring sanctions wouldn’t be in the U.S. national interest, though that carries political risks.

3. Where does Trump stand?

As a candidate in 2016, asked if he might recognize Crimea as Russian territory and lift U.S. sanctions, Trump replied, “We’ll be looking at that. Yeah, we’ll be looking.” That led Congress, as part of a 2017 package of expanded sanctions, to codify the measures into a law specifying that it could vote to block any move by Trump (or a future president) to loosen them. Trump called the legislation “seriously flawed” but signed it into law anyway -- prompting Russian Prime Minister Dmitry Medvedev to predict the sanctions “will remain in effect for decades unless a miracle happens.” The U.S. sanctions in April sent the ruble tumbling and roiled metals markets, leading Trump to boast, “Nobody has been tougher on Russia than I have.” But two weeks later, after U.S. Ambassador to the United Nations Nikki Haley declared that new sanctions were forthcoming in response to Russia’s support of the Syrian government, Trump stepped in to squash the idea.

4. What happened after the Helsinki summit?

The summit provoked uproar in the U.S., where Trump was heavily criticized for failing to call Putin to account over election meddling. In August, a bipartisan group of legislators introduced the draft Senate bill to “impose crushing sanctions and other measures against Putin’s Russia until he ceases and desists meddling in the U.S. electoral process.” The proposals call for sanctions on issues of new Russian sovereign debt, something the U.S. Treasury publicly opposed in February, and would prohibit transactions in all property and interests in property of major Russian banks, including Sberbank, VTB Bank, Gazprombank, Promsvyazbank, Rosselkhozbank and Vnesheconombank. The sanctions linked to the Skripal poisoning may blunt the political push for other penalties, however, at least for now.

5. What’s been the impact of the sanctions?

They’ve curtailed investment and Russian access to technology, hitting economic growth. Over the medium-term they could cut the size of the economy by almost a tenth, according to the International Monetary Fund. While sliding oil prices also hit the currency in previous years, the ruble’s been the fifth worst global performer so far in 2018, depreciating nearly 13 percent against the U.S. dollar, even as crude has recovered. The non-resident share in Russia’s domestic debt fell to 27.5 percent in July from 34.5 percent in March. There also is collateral damage, felt outside Russia.

6. What sort of collateral damage?

The April sanctions targeting Rusal initially disrupted the global supply chain for aluminum and sent prices soaring by 30 percent. That affected, among others, soda-can makers, the world’s biggest miners and big banks that finance the aluminum trade. Repercussions from sanctions have also been felt in the European Union. The Trump administration has threatened to sanction German and other European companies involved in Nord Stream 2, a planned natural gas pipeline under the Baltic Sea to Germany. Congress gave the Trump administration the right to target foreign investment in new Russian energy export pipelines.

7. Who else has sanctions on Russia?

The EU slapped sanctions on Russia’s financial, energy and defense sectors in response to the annexation of Crimea and in a bid -- unsuccessful so far -- to push Putin into a more conciliatory stance over the conflict in Ukraine. On July 5, the EU extended those sanctions for another six months. Other Western powers have adopted similar measures.

• The U.S. State Department lists the sanctions against Russia.

• Trump still leaves the door open to recognizing Russia’s grab of Crimea.

• The New World order, according to Trump and Putin.

• Putin and Trump have nothing to talk about, Bloomberg Opinion columnist Leonid Bershidsky writes.

• QuickTake explainers on sanctions as financial warfare, Russian gas and renewed U.S.-Russia tensions.

--With assistance from Tony Halpin.

To contact the reporters on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net;Laurence Arnold in Washington at larnold4@bloomberg.net;Olga Tanas in Moscow at otanas@bloomberg.net

To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net, Tony Halpin, Gregory L. White

©2018 Bloomberg L.P.