Russian President Vladimir Putin and Hungarian Prime Minister Viktor Orban attend a joint news conference in Budapest on Thursday. (Alexei Druzhinin / Sputnik / Kremlin Pool/via EPA)
This is the story of how, in the hyperactive Age of Trump, something that initially appeared to be a major change in policy turned into a nothing-burger.
Early Thursday morning, both political and journalistic antennae shot up when the Treasury Department posted a brief paragraph titled “Publication of Cyber-related General License.” Pursuant to last month’s sanctions by the Obama administration on Russia’s intelligence service for interfering in the U.S. election, it said, “certain transactions” with the service, known as the FSB, were to be authorized.
At first glance, the notice appeared to be the first step toward lifting Obama-era sanctions on Russia, something President Trump has indicated he might want to do as he fashioned a new relationship with Russian President Vladimir Putin.
That interpretation was bolstered when former FSB director Nikolai Kovalyov, now a member of the Russian parliament, called it “the first step on the way leading to cooperation in the war on terror.”
“This shows that actual joint work on establishing an anti-terrorism coalition is about to begin,” Kovalyov told Tass. The Russian news site reported that “U.S. authorities have eased” sanctions against Russia’s FSB.
On Capitol Hill, Sen. John McCain (R-Ariz.), a strong sanctions supporter, told reporters that his staff was still examining the matter, although the initial read was that it was a “technical fix.”
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Rep. Eric Swalwell (D-Calif.), a member of the House Intelligence Committee, was far less sure. Instead of punishing Russia for its attacks on “our democracy,” Swalwell said in a statement, Trump “is easing sanctions against its team of hackers, the FSB.” He called on Congress to “act swiftly to reimpose these sanctions so that those who attack America know there’s a price to pay.”
Rep. Bill Pascrell Jr. (D-N.J.) said that Trump had “inexplicably decided to reward” Russia for bad behavior. “For someone who purports to be the ultimate dealmaker,” Pascrell said in a statement, “this sounds like a raw deal to me.”
Sen. Cory Gardner (R-Colo.) chose the moment to announce that he was joining a bipartisan group of sponsors of the “Counteracting Russian Hostilities Act of 2017,” a measure calling for even more sanctions against Russia.
At the White House, press secretary Sean Spicer denied any policy change, saying such tweaks were standard operating procedure.
By midafternoon, after failing to respond for hours to media calls asking for an explanation, Treasury’s Office of Foreign Assets Control organized a call-in briefing with a “senior Treasury official,” who, it cautioned, could not be quoted.
The official explained that U.S. exports of certain communications technology items, mostly consumer goods such as cellphones, tablets and low-level encryption software, were and remain legal. In the Russian system, however, the FSB is responsible for processing their import. Sanctions prohibiting any dealings with the FSB — which charges a fee for its processing service — meant that exports had stopped.
U.S. exporters had complained, the official said, so the new administration looked into the matter and decided they had a point. The fix now allows U.S. companies, prohibited from dealing with the FSB in any other way, to pay up to $5,000 a year in FSB fees so that Russians can buy American-exported cellphones and other consumer items. Other sanctions remain in place.
Another way to think about it, said Richard Nephew, a former sanctions coordinator at the State Department, is that the sanctions tweak “permits Americans to get licenses to sell Russians things that protect them from government eavesdropping. . . . This — in theory — helps Russians get goods that allow them to have encrypted, sensitive conversations away from Russian government prying.”