The Defending American Security from Kremlin Aggression Act of 2018 (DASKAA), aimed at increasing economic, political and diplomatic pressure on Russia in response to Moscow’s alleged continuing interference in US elections, proposes to bring all existing sanctions against Russia - from CAATSA to the Magnitsky Act into a single base, according to the draft law seen by Kommersant and RBC.
The bill was introduced last week by a bipartisan group of US senators: Lindsey Graham, Robert Menendez, Cory Gardner and Ben Cardin.
The bill suggests sanctions against Russian political figures, oligarchs, family members and other individuals as well as restrictions against transactions related to investment in energy projects supported by Russian state-owned or parastatal entities. Another important measure of the initiative is the demand to ban transactions pertaining to the Russian sovereign debt.
Another clause would ban any transactions in US property by seven of Russia’s largest banks, including Sberbank, VTB, Promsvyaznabk, Vnesheconombank.
It also proposes the creation of an Office of Cyberspace and the Digital Economy, with the State Department to lead diplomatic efforts on cyber security, and a centre to respond to Russian disinformation threats.
Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, speaking to Vestnik Kavkaza, noted that if sanctions are imposed in the most radical form, Russia's finances will be in a difficult situation. "If the US freezes the assets of Russian banks, then the circulation of non-cash dollars will stop here, which will deal a huge blow to the economy. We trade in dollars, especially while selling gas, oil, coal, steel, and it can be stopped. According to the rules for Bank activities, the non-cash currency is stored in the issuing country, that is, our dollars are stored in US banks - and these American assets can be frozen. Therefore, if sanctions are adopted in this form, it's not good, especially if similar restrictions are imposed by Europe," he said.
The ban on operations with the Russian national debt will be virtually invisible against this background. "The Americans have already withdrawn almost all their money from the Russian national debt. Only about $5 billion remained, and not all of them are held by the Americans. We were ready for this three months ago and also went out from US securities," Yudenkov stressed.
The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, in turn, drew attention to the fact that bans on operations with state debt do not pose a significant threat. "Restrictions on state debt are significant if the state has a deficit budget, while the Russian budget has been proficient for quite a long time," the expert explained.
At the same time, he focused on the fact that the possible freezing of assets of all major Russian banks is fraught with much more serious consequences. "The problem is that US dollars can be attributed to US assets, which actually means paralysis of any deals with the use of US dollars," the advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house believes.
According to him, if the US adopts such restrictive measures in relation to Russia, the ruble exchange rate will greatly weaken. "Previously, Citibank's forecast about the possible decline of the ruble exchange rate by 15% was published, but if it comes to such sanctions, the decline will not be limited to 15%," the expert said.
