23rd May 2022

US signals Iran-type ban on Russia trade

  • Wendy Sherman at Nato HQ in Brussels on Wednesday (Photo:
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Washington has signalled that any firms worldwide doing business with Russia could in future be cut off from US trade — the same way they were over Iran in the past.

Wendy Sherman, the US deputy state secretary, issued the warning in Brussels on Thursday (21 April), while admitting the measures — called secondary sanctions — might be unpopular in Europe, which is lagging behind America on banning Russian energy imports.

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"The US uses secondary sanctions — you know that. We've said to countries who are evading the [Russia] sanctions — you're going to pay a price", Sherman said at an event organised by the Friends of Europe think-tank.

Europe has in the past "not been a fan" of such measures, Sherman said after meeting Nato and EU officials Wednesday.

"I'm not going to make choices for the EU and for Europe," she also said, when asked if the US wanted the EU to tighten up its Russia energy embargo, which currently covers coal, but not oil or gas.

But "sometimes it [secondary sanctions] is necessary as an enforcement tool — and it is here," Sherman added, without going into details on when such measures might be imposed.

US secondary sanctions on Iranian oil exports were widely credited with helping to crush Iran's economy and bring it to the negotiating table on nuclear non-proliferation — a deal which Sherman personally helped to broker as the lead US negotiator on the so-called Joint Comprehensive Plan of Action with Iran.

The veteran US diplomat also said China would face economic consequences if it bailed out Russia in financial or military terms.

"They've seen what we've done in terms of sanctions on [Russian] exports and designations [of Russian firms and individuals] ... so that should give them [the Chinese] some idea of the menu from which we can choose, if they were to provide material support [to Russia]," Sherman said.

"We're trying to be very transparent here," she added, listing multiple US-China talks on the subject in recent weeks.

The transatlantic unity against Russia's war on Ukraine should also make Beijing think twice about its geopolitical calculations, Sherman said.

"I hope the PRC [People's Republic of China] will learn the right lessons from this — that you can't split us from our allies and partners and that Europe will not separate itself from like-minded states," she said.

Sherman took China to task for helping to spread Russian propaganda, some of which paved the way for potential Russian chemical or biological weapons use in Ukraine.

But she took a softer line on India, which has also refused to condemn Russia's actions.

India was a "democracy" and a US "partner" in Asia, alongside Australia and Japan, Sherman said.

India was also understandably "worried", the US diplomat added, because India had depended on Russian arms supplies in the past to help keep China at bay, but Western sanctions meant Russia's military-industrial complex "doesn't have future".

"What we're aiming for here is strategic failure for [Russian president] Vladimir Putin and the Kremlin and I believe it's already happening," Sherman said Thursday.

Russia had become "a pariah" on the world stage, even if not quite all UN countries had yet turned against it, she noted.

And "hundreds of US companies" had already left the Russian market and "are not returning any time soon", she added.

"The tail on that [Western trade sanctions] is pretty long," she said, in terms of the long-term economic damage Russia would suffer.

"This is, like, six weeks old — it feels like a year, maybe three years, but it's like weeks old what we've done. It's extraordinary," she said.

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