On January 29, 2018, the U.S. Department of the Treasury, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA), delivered five reports to the designated Congressional committees:
Sec. 241: Report on Senior Foreign Political Figures and Oligarchs in the Russian Federal;
Sec. 104(e): Report on Contributions to Iran’s Ballistic Missile Program:
Sec. 242: Report on Effects of Expanding Sanctions to Include Sovereign Debt and Derivative Products;
Sec. 273: Examining the Counter-Terror Financing Role of the Department of the Treasury in Embassies; and,
Sec. 311(d): Designation of Additional Persons Related to North Korea.
Section 241 of CAATSA required Treasury, in consultation with the Department of State and the Director of National Intelligence, to provide a report regarding senior political figures and oligarchs in the Russian Federation and Russian parastatal entities.
The names of senior political figures and oligarchs in the unclassified version of the report were selected based on objective criteria drawn from publicly available sources.
- Senior political figures: The report included individuals who are: i) senior members of the Russian Presidential Administration; ii) members of the Russian Cabinet, Cabinet-rank ministers, and heads of other major executive agencies; iii) other senior political leaders, including the leadership of the State Duma and Federation Council, other members of the Russian Security Council, and senior executives at state-owned enterprises.
- Oligarchs: The report included Russian individuals with an estimated net worth of $1 billion or more.
- Parastatals: The report analyzed entities that are at least 25% owned by the Government of Russia and that had about $2 billion or more in revenues in 2016.
Treasury’s press release states the report is not a sanctions list. The inclusion of individuals or entities in any portion of the report does not impose sanctions on those individuals or entities. Nor does it create any other restrictions, prohibitions, or limitations on dealings with such persons by either U.S. or foreign persons. Treasury states that inclusion in the report does not constitute the determination by any agency that any of the individuals or entities meet the criteria for designation under the sanctions program.
The law is designed to punish Russia for its alleged interference in the 2016 U.S. elections and its actions in Ukraine.
The unclassified sections has 210 https://www.cnn.com/2018/01/30/politics/full-us-list-of-russian-oligarchs-with-putin-ties-intl/index.html names, 114 senior political figures and 96 oligarchs.
On Jan. 30, 2018, the Trump administration said it will not implement Russia-related sanctions mandated by Congress last year because the threat itself is acting as a “deterrent.”
Although inclusion on the so-called “Putin” list does not mean the persons have been sanctioned, the consequences are potentially significant; (1) financial institutions who subscribe to anti-money laundering and international enforcement watch lists will now encounter their names and some compliance officers will likely determine that the individuals are “high-risk” persons, requiring financial institutions to either close their accounts or pay enhanced due diligence; (2) some of the listed individuals may encounter problems when they travel internationally; and (3) some of the listed persons will likely have trouble doing business, because of the potential negative taint of doing business with listed persons, especially due to the risk that the may be sanctioned in the future.
A more comprehensive discussion will appear in the February issue of the IELR.