Trump Signs “Seriously Flawed” Russia Sanctions Bill

03.08.2017 -

US President Donald Trump has signed the expanded Russian sanctions bill passed by both houses of Congress, while calling it “seriously flawed.” The new sanctions, which will make it harder for companies – especially in the energy sector –  to do business in and with Russia  were overwhelmingly supported by the House of Representatives (419 votes to 3) and the Senate (98-2) but decried in Europe.

There was some doubt as to whether or not Trump would sign the law, which also imposes financial sanctions against Iran and North Korea, due to his alleged close connections to the Kremlin. However, saying he signed "for the sake of national unity,” the president noted also that the bill will "punish and deter bad behavior by the rogue regimes in Tehran and Pyongyang" as well as enhancing existing sanctions on Moscow.

The legislation limits the ability of the president to lift the sanctions unilaterally. In two separate statements, Trump called the provisions “clearly unconstitutional” and said it “encroaches on the executive branch's authority to negotiate” as well as complicating efforts to coordinate with allies.

Most of the attention in the discussion of tougher sanctions has focused on Russia’s alleged interference in the November 2016 US elections. The aim of the measures passed by the US and Europe, however, was to punish Vladimir Putin’s regime for military aggression in Ukraine and Syria. The legislation contains a clause limiting the power of the White House to override sanctions.          

Sentiment in Europe, in particular Germany, is clearly against the extended sanctions. Kurt Bock, CEO of BASF, which owns a stake in the Nordstream pipelines that pump Russian natural gas to Germany, said he believes the US move is an effort to force Europe to buy American liquefied natural gas (LNG), a stance backed by a survey conducted by the group’s subsidiary.

Germany’s business sector committee on eastern Europe, Ostausschuss der Deutschen Wirtschaft, said it was “unacceptable” that European energy policy is being decided in Washington. If European firms are negatively impacted by the sanctions, the committee said it would consider sanctions against US companies “as a last resort.”

In any case, the financial impact on European business, including Russia, could be in the triple-digit million euro range, commented the committee’s chair, Wolfgang Büchele, former CEO of gases and engineering group Linde.