Will US impose sanctions against whole world?

Will US impose sanctions against whole world?

New US sanctions, proposed by the US senators, would damage the global economy, the Kremlin spokesman Dmitry Peskov said.

"No doubt, such restrictions will deal additional damage both to bilateral relations and to the global economy and the global energy market. They can lead to certain negative repercussions for our country," Sputnik cited Peskov as saying.

But he added that there is also no doubt that the Russian economic sector will be able to find means to offset and minimize the possible damage if this measure comes to pass.

"So far we are talking about some kind of legislative initiative of the known senators. Of course, we hope that common sense will prevail, and we will still able to overcome the peak of this sanctions rhetoric," Peskov added.

US senators from both parties proposed new sanctions against individuals involved in Russia's building energy pipelines and dealing with nuclear and conventional energy, which could limit President-elect Donald Trump’s ability to improve ties with the Kremlin.

The proposed legislation would set in stone many of the sanctions the Obama administration levied against Russia after revelations of election-related cyberhacking, and significantly broaden the restrictions against companies seeking to invest in Russia’s energy sector and the state-run corporations that dominate the country’s economy.

According to Reuters, the bill mandates sanctions on investments of $20 million or more in Russia’s ability to develop its petroleum and natural gas resources. The bill is also expected to put into law four executive orders from the Obama administration on sanctions against Russia.

The sanctions also would directly target US and foreign banks that help Russia sell sovereign debt. 

A senior analyst of 'Uralsib Capital', Alexei Kokin, speaking to Vestnik Kavkaza, expressed confidence that the sanctions against the Russian energy sector, if they are accepted, will be applied only to future investments.

"Typically, these restrictions apply only to future investments. It is important to remember that the sanctions against those investing in pipelines are not relevant, since none of the foreign companies are investing in Russian pipelines, there are investments only in the international projects such as the 'Nord Stream', but they are not Russian, as they are located outside Russia, and sanctions cannot be applied to them," he pointed out.

As for the sanctions against investors in the Russian oil industry, we should not expect catastrophic consequences here. "There have been no new players in the extraction and processing of oil here for a very long time, and it is unlikely that the restrictions will be applied on old ones. The previous sanctions were also like this: they were against attracting new funding. Accordingly, I do not think there will be serious problems for Russian companies," Alexei Kokin believes.

The head of the finance, monetary circulation and credit department at RANEPA, Alexander Khandruev, in turn, stressed that the sanctions against privatization can be easily bypassed if desired. "It can be done, for example, by entering into structured transactions through companies, which will act under a different flag. There will not be a great damage to Russia from this, moreover, such a policy by the US government will greatly expand not only military-technical, but also economic  and financial cooperation of Russia with other regions, spur the formation of the renminbi zone," the expert expects.

As a result, according to him, the sanctions will rather hit the US itself. "Let me remind you that China has reduced its official reserves for various reasons, a significant portion of which was held in the US Securities. The Americans are shooting themselves in the foot, while we don't care about the sanctions against the participation of foreign companies in the Russian privatization. Oil prices are allowing the budget to do without the sales of state property, in addition, we still have emissions, providing an option of quantitative easing by the Bank of Russia," Alexander Khandruev concluded.


Vestnik Kavkaza

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