Will EU join new US sanctions on Putin elite?

In recent years, the executive - the White House - and not the Congress has managed most US sanctions. The president has issued an executive order, or decree, and the department of the treasury, the state department, or the department of commerce has specified the sanctions.

The reason was that it has proven difficult to reverse sanctions imposed by Congress. The outstanding example is the Jackson-Vanik amendment to the US trade act of 1974. It forced the USSR to allow emigration of Jews, but it still applies to several former Soviet republics long after the end of the USSR and any problem of Jewish emigration.

Various congressmen from both parties drafted legislation on sanctions against Russia, but they quietly dropped them when the Barack Obama-era White House explained that it would do what they wanted in any case. While the Congress trusted president Obama, it did not trust president Trump, so it adopted CAATSA.

The Congress feared that Trump would swiftly end Ukraine-related sanctions against Russia by decree, as he threatened to do. It codified these sanctions so that the president cannot end these sanctions without the explicit approval of the Congress.

CAATSA has several serious implications for Europe. When Congress adopts a law, its natural ambition is to proceed. This act contains eight sections that call for reporting or actions.

The different actions have to be taken from 30 days to one year from the adoption of the law. Even if the US administration proposes the actual sanctions, the US Congress drives the process. The administration cannot ignore strong bipartisan views, and the Congress finds it hard enough to coordinate within itself.

To date, the most significant measure is that the US state department on October 27 named 41 Russia entities in the defence and intelligence sector, according to CAATSA section 231. These were all expected state-owned bodies.

On 31 October, according to sections 225 and 232, CAATSA led to a minor tightening of the oil sanctions, blocking some of Russian oil firm Rosneft's offshore drilling in the Black Sea. Germans have raised concerns that section 232 would be used against the construction of Nord Stream 2, a Russian gas pipeline in the Baltic Sea, but that will hardly be the case.

Cooperation dwindling

While these three early examples have been of little significance, they show how EU-US coordination of Ukraine-related sanctions on Russia is dwindling.

Without public explanation, US Secretary of State Rex Tillerson abolished the coordinating office of the director of sanctions at the state department. Under Obama, a senior diplomat, Daniel Fried, held that post. He had been ambassador to Poland, senior director for Europe at the National Security Council, and assistant secretary of state for Europe.

Tillerson has delegated that task to deputy director of the secretary's policy planning staff, David Tessler.

He is highly qualified with a distinguished career at the Department of the Treasury, as senior advisor to the director of the Office of Foreign Assets Control (OFAC) and then as senior advisor to the under secretary for terrorism and financial intelligence, but he does not have Fried's formal authority.

Coordination is further complicated by CAATSA giving different authorities the task of reporting on the eight sections requiring actions, complicating coordination within the US government.

While these elements offer difficulties, neither the US administration nor the Congress have in any way indicated any objection to the European positions. The concerns are not differences of principle but problems of coordination.

Oligarch clause

The most interesting new element in CAATSA is its section 241, which mandates the administration to submit to the Congress within 180 days "identification of the most significant senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to the Russian regime and their net worth." 

The deadline falls on 29 January.

Together with Fried and two other Russia experts, Andrei Illarionov and Andrei Piontkovsky, I have argued that the US should focus on people who have made their money on close connections with Russian president Vladimir Putin and other Kremlin leaders, rather than on rich Russians who have made their money through entrepreneurship.

However the US administration policy comes out, the EU will hardly be part of the discussion. Will the EU go along with the US policy line or not? More formal coordination between the EU and the US would be desirable.

Anders Aslund is a senior fellow at the Atlantic Council, a think tank, and an adjunct professor at Georgetown University in Washington