War of Sanctions against Russia

BERLIN/MOSCOW/WASHINGTON | | russische-foederationusa

BERLIN/MOSCOW/WASHINGTON (Own report) - German business circles are readying themselves for a new round of US sanctions against Russia and are warning against a second "Iran scenario, " because of a comprehensive package of US punitive measures, intended to affect also all Russian energy projects abroad. The new sanctions may not only prevent an LNG terminal Novatek plans to build in Rostock, but also facilitate steps against the three - of the twelve - large German refineries in which Rosneft holds shares. As in the case of Iran, from which German companies have almost completely withdrawn following the imposition of US sanctions, the fear of Washington's punitive measures is now foiling new business deals with Russia on a large scale. In addition to the package of sanctions, the Trump administration is expected to impose a second round of punitive measures for Moscow's alleged responsibility for the Salisbury nerve-agent attack. The US President is also threatening to expand its war of sanctions because of Russian support for Venezuela.

"Very Severe Sanctions"

In the war of sanctions waged against Russia by western powers, a new round of economic reprisals is looming. The Bloomberg news agency reported at the end of last week that the White House is expected to approve sanctions for the Russian government's alleged responsibility for the nerve-agent attack in Britain's town of Salisbury. Washington's exact plans are not yet clear. Last fall it was announced that a "very severe second round of sanctions" were being prepared that would include not only Russian banks but also a prohibition on procurement of defense articles.[1] US Foreign Minister Mike Pompeo informed his Russian counterpart Sergey Lavrov in a phone call already in February, of the impending steps, both, Russian and US American sources confirm.

DASKA

In addition, another more comprehensive package of sanctions is being prepared in Washington, allegedly as an answer to "Russian aggression. " The bill introduced in the Senate is entitled "Defending American Security from Kremlin Aggression Act" ("DASKA") and is described as particularly comprehensive. According to reports, the legislation would target projects, initiated by Russian energy companies outside of Russia, also businessmen associated with President Vladimir Putin and banks, allegedly guilty of participating in cyber-crimes. It could also include the Russian shipbuilding sector. The effects on the financial market are already considered "unpredictable. " "The sanctions could also target Russian state bonds and the banking market, " the Chair of the German Eastern Business Association (OAOEV), Michael Harms, recently noted.[2]

The Iran Scenario

Particularly the DASKA sanctions are arousing massive concern in Berlin and in German business circles. DASKA is not specifically targeting Nord Stream 2 - which Washington threatens with other sanctions [3] - but affects all liquified gas projects with Russian participation, including a liquified gas terminal, that Russia's Novatek plans to build in Rostock, in cooperation with Belgium's Fluxys.[4] The gas storage facilities in Germany belonging to Gazprom could be affected by sanctions, along with three of the twelve German refineries where Rosneft owns shares.[5] In particular, all German companies doing business with the sanctioned Russian companies can expect penalties. Observers cite the example of Volkswagen which is cooperating with Russia's GAZ automobile manufacturer.[6] German business circles are already comparing the expected impact with that of US sanctions on Iran. After the latter took effect, German business with Iran nearly broke down completely, because almost none of the German companies doing business in Iran were prepared to forego their much more lucrative business relations in the US, in favor of the profits they expect to make in Iran.[7]

Atmosphere of Alarm

Accordingly, an atmosphere of alarm reigns among German companies active in Russia. Last week the Russia Working Group of the German Eastern Business Association (OAOEV) held an in-depth meeting with Andrej Sobolev, the head of the Russian Embassy's Bureau of Trade and Economy in Berlin, to prepare for the expected application of new US sanctions. Sobolev offered "rapid and non-bureaucratic" aid in case that becomes necessary.[8] "Several company representatives and business consultants reported on the companies' fears of violating current or possibly newly imposed US sanctions on Russia," wrote the OAOEV about the meeting. The insecurity is contributing to the fact "that planned investments are being delayed or cancelled completely and current projects are coming under pressure." The OAOEV announced "a briefing on the sanctions especially for the legal departments of the companies and major consulting firms." An "East Contact Lunch" has been announced for this Monday, where, in light of the "looming new US sanctions," the question "whether business with Russia is worth it," will be addressed.[9]

A Question of Power

The US is extending its sanctions, after the EU and the other western powers had taken their most recent steps in their joint sanctions war against Russia. Just this past March 15, Brussels, along with Washington and Ottawa imposed new punitive measures - under the pretext that Russia must be sanctioned for its handling of the attempted breakthrough by Ukrainian warships last year in the Straits of Kerch.[10] In addition, the Trump administration is now threatening to expand the sanctions war on Russia, because of Russia's support for Venezuela. The arrival of Russian military experts in that South American country in support of Caracas is Washington's pretext. According to Russian explanations, the purpose is to carry out maintenance on Russian-made military equipment. Venezuela is among the countries being supplied by Russian arms manufacturers. The Russian experts are working in the country on behalf of the country's government. President Donald Trump demands that they be immediately withdrawn, or he will impose further sanctions on Moscow.[11] There is no legal basis for this presumption. Instead, Washington and Berlin are themselves in violation of international law with their unqualified recognition of the seditionist Juan Guaidó as the country's "transitional president."[12] Naturally, because of their political, economic, and military power, they do not have to expect sanctions imposed for not only their alleged, but their actual illegal acts.

 

[1] Saleha Mohsin, Nick Wadhams: U.S. Readying Russia Sanctions for U.K. Poison Attack, Sources Say. bloomberg.com 29.03.2019.

[2] Neuer Sanktions-Schreck aus Amerika. Frankfurter Allgemeine Zeitung 15.03.2019.

[3] See also The Power of the Pipes.

[4] NOVATEK and Fluxys Plan to Build an LNG Terminal in Rostock. novatek.ru 17.10.2018.

[5] See also German-Russian Oil Cooperation.

[6] Neuer Sanktions-Schreck aus Amerika. Frankfurter Allgemeine Zeitung 15.03.2019.

[7] See also War of Sanctions against Iran.

[8] AK Russland diskutiert über Cybersicherheit. oaoev.de 25.03.2019.

[9] OstContact Lunch: Fünf Jahre Sanktionen - Lohnt sich das Russland-Geschäft noch? oaoev.de.

[10] See also Machtkampf im Asowschen Meer.

[11] See also Aufforderung zum Putsch.

[12] US-Regierung droht Russland mit Sanktionen. tagesspiegel.de 29.03.2019.