“The amendment would do a number of things. It would codify and
strengthen six existing Obama administration Executive orders on Russia
and Ukraine and on Russian cyber activities and the sanctions flowing
It would provide for strict congressional review of any effort by the
President to relax and suspend and terminate or waive Russian sanctions
patterned after the Iran Review Act.
It would require mandatory imposition of sanctions on malicious cyber
activity against the United States, on corrupt Russian actors around
the world, on foreign sanctions evaders violating the Russia, Ukraine,
and cyber-related sanctions controls, on those involved in serious
human rights abuses in territories forcibly controlled by Russia, and
on special Russian crude oil projects around the world.”
Seems reasonable in light of what’s been going on to keep the sanctions, codify them, and give Congress a hand in the process in case the administration tries to modify them. Although there is an argument to be made that allowing Congress to interfere with the sanctions process is problematic, there is a valid counter argument asserting that when an administrative proclivity toward softening sanctions against an international ‘bad actor’ is displayed, Congress needs to have some mechanism for putting on the brakes. We might also want to pay particular attention to that last line in the amendment description, “and on special Russian crude oil projects around the world,” because this element is a thorny proposition in relation to the pro-fossil fuel policy of the current administration and State Department.
The amendment description continues:
“It would authorize broad new sanctions on key sectors of Russia’s
economy, including mining, metals, shipping, and railways, as well as
new investments in energy pipelines.
It would crack down on anyone investing in corrupt privatization
efforts in Russia–something we have seen a lot of over 20 years.”
This, of course would definitely not be music to the Oligarchs’ ears. The “privatization schemes” began in the 90s, including the Aluminum wars and the oil grabs, along with other highly questionable distributions of Russian assets, natural and manufacturing. The Wilson Center analysis is one of the better, more succinct, summaries:
“The small groups of individuals who emerged in control of the privatized enterprises fall into three different groups, according to Goldman. The first is former factory directors that became factory owners. This group outmaneuvered the workers, who were not organized, to gain control of the factories. The next two groups, argued Goldman, were the ones who obtained the greatest wealth–the nomenklatura and non-nomenklatura oligarchs. The nomenklatura oligarchs were the Soviet economic elites who took advantage of their positions to privatize the industries that they regulated. For example, Viktor Chernomyrdin, who oversaw natural gas production during the Soviet era, went on to head up Gazprom, the Russian natural gas monopoly and richest company. When Chernomyrdin went on to become Prime Minister, he passed control on to his deputy who worked under him in the Ministry.”
It’s easy to see why and how privatization became piratization. And now we come to some of the items in the amendment the current administration might find potentially problematic:
“It would broaden the Treasury Department’s authority to impose
geographic targeting orders, allowing investigators to obtain ATM and
wire transfer records so Treasury can better target illicit activity of
Russian oligarchs in the United States.
It would require Treasury to provide Congress with a study on the
tangled web of senior government officials from Russia and their family
members and any current U.S. economic exposures to Russian oligarchs
and their investments, and that includes real estate.”
Let’s move to a side track for a moment and look at those geographic targeting orders in light of recent activity by FinCen:
“The Financial Crimes Enforcement Network (FinCEN) today (2/23/17) announced the renewal of existing Geographic Targeting Orders (GTO) that temporarily require U.S. title insurance companies to identify the natural persons behind shell companies used to pay “all cash” for high-end residential real estate in six major metropolitan areas. FinCEN has found that about 30 percent of the transactions covered by the GTOs involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report. This corroborates FinCEN’s concerns about the use of shell companies to buy luxury real estate in “all-cash” transactions.”
Now, who’s in the “high end residential real estate” business? This brings to mind that transaction between Donald Trump and the Fertilizer King in south Florida. Sometimes, it appears, the shells weren’t even thought necessary? However, the high end real estate market is attracting a stream of foreign “investment” which is perilously close to, if not definitively part of, good old fashioned money laundering. Thus, providing Congress with a study of those tangled webs of Russians and their ‘investments’ and our economic exposure to their machinations might be embarrassing to the current administration?
The amendment also gives the administration some homework:
“It would require the administration to assess and report to Congress
on extending secondary sanctions to additional Russian oligarchs and
state-owned and related enterprises.” (link to pdf)
Not only would be administration be tasked with enforcing or perhaps even increasing sanctions on the Oligarchs, but it would have to study whether secondary sanctions should be applied on those with whom they do business.
We should recall that this bill, including this amendment, sailed through the Senate on a 98-2 vote. No sooner did the bill hit the House of Representatives than the leadership thereof displayed a heretofore relatively quiet amorous relationship with the Origination Clause. Senator Bob Corker (R-TN) thought the origination questions had been settled in the final version of the Senate bill, but House Republicans continued to argue the question had not been resolved.
And now we turn to Nord Stream 2 pipeline, not exactly a subject of banner headlines in the US, but nevertheless an important piece in the sanctions discussion. The Financial Times reports that the pipeline will pump gas from Russia to European countries in 2019, and is a “flagship project” for Gazprom; among those sanctioned would be investors in the pipeline. The Oil and Gas lobby is particularly “concerned,”
“Rep. Bill Flores, a Republican from Texas, said he’s been approached by “five or six of the majors” based in his state. The energy companies have told him they worry the bill as it stands is overly broad.
“You could restrict the sanctions of those activities within the borders of Russia, that might be a quick fix and also the national security carve out as well,” Flores said when asked how the sanctions bill might be changed to address those concerns. “Most of us are fine with having sanctions on U.S. interests operating inside Russia, with Russian companies, but then going outside of Russia is too broad.”
“Going outside of Russia” appears to be code for “Nord Stream 2.” Somewhere between Nord Stream 2 and the inspection of money laundering and other dubious transactions in the high end real estate business may lie the explanation for administration/House Republican opposition to the passage of S 722.
While Nevadans are calling Senator Heller’s office urging him to vote “no” on the health insurance bill, they may also want to contact our Congressional Representatives about advancing S 722.
Representative Mark Amodei (R-NV2) can be reached at 775-686-5760 (Reno) 775-777-7705 (Elko) or 202-225-6155. Representative Ruben J. Kihuen can be reached at 702-963-9360 or 202-225-9894. Representative Jacky Rosen’s Las Vegas office number is 702-963-9500 and Representative Dina Titus can be reached at 202-225-5965 or 702-220-9823.