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Since Russia’s invasion of Ukraine, the Biden administration has rolled out broad economic sanctions against Russian companies and individuals. These sanctions are meant to inflict economic pain on Russia, limit Russia’s ability to finance aggression, and hold Putin accountable.
Most recently, on February 24 (the one-year anniversary of Russia’s invasion of Ukraine), the administration announced a 200% tariff on Russian aluminum imports and products manufactured in third countries that use Russian aluminum. announced. This is a good incremental step, but the overall effectiveness of the Biden administration’s sanctions regime has been mixed so far, and news of Russia’s flagrant attempts to circumvent these sanctions is not encouraging.
In January, a former FBI counterintelligence director in New York City was arrested for violating U.S. sanctions laws by accepting payments from a well-known Russian oligarch. The oligarch was paid to try to remove the oligarch from the US sanctions list through an elaborate scheme that included pumping money into him through shell companies in the United States.
President Joe Biden answers questions about Russian President Vladimir Putin at the White House on March 16, 2022. (AP Photo/Patrick Semanski)
The Russian oligarch also evaded sanctions by having his company, a Russian aluminum manufacturer, sell a controlling ownership interest in the company on paper. However, the fact that he bribed senior U.S. intelligence and law enforcement officials denies the legitimacy of this sale he made to a close family member, making it nothing more than a sleight of hand. bottom.
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If the United States is to be taken seriously on the world stage, then in Russia’s eyes we cannot allow serious criminal activity in the United States by Russian oligarchs and others to go unsolved. Despite this, the Biden administration has refused to impose sanctions on many Russian companies, including aluminum producers.
Although the actions involving the former FBI counterintelligence officer were carried out by Russian individuals, not by the nation-state, President Biden should take that very seriously. The aluminum his company produces helps supply the raw materials needed for Russia’s war effort.
President Vladimir Putin delivers his annual speech in Moscow, Russia on Tuesday, February 21, 2023. (Sergei Karpukhin, Sputnik, Kremlin pool photo via AP)
Allowing Russian oligarchs to circumvent US sanctions laws and manipulate US assets defeats the very purpose of imposing sanctions in the first place. And leaving such manipulation unanswered raises serious concerns about President Biden’s leadership, judgment and fortitude. Permitting sanctions evasion weakens sanctions as an effective deterrent and leads to worse consequences.
Russian-born US resident charged with aiding sanctioned billionaire
Biden to effectively ignore this massive provocation because there is a threat of disinformation intrusion in our intelligence agencies and Russian oligarchs have historically served as conduits for such disinformation Administration policy is cause for concern.
Now is the time for the Biden Administration and Congress to tighten US economic sanctions to prevent evasion by bad actors. One possible remedy is to strengthen the so-called “50%” rule of the Office of Foreign Assets Control (OFAC). Her OFAC, which oversees the enforcement of U.S. sanctions, imposes sanctions on a foreign entity if the sanctioned party owns 50% or more of her.
President Joe Biden and President Volodymyr Zelenskiy walk next to St. Michael’s Cathedral in Kiev, Ukraine on February 20, 2023. (Reuters/Gleb Galanich)
Simply put, it means that if a designated person owns 51% of a business, the business is automatically licensed. However, if the sanctioned individual owns as much as 49% of her stock, it would normally not be sanctioned. Such bright lines ignore economic realities.
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We need to lower this threshold significantly so that bad actors cannot evade sanctions by making small changes to the ledger. The 50% rule should be lowered to 25% to align with the US beneficial owner rule.
This is a simple step to hold more villains accountable and prevent them from pretending to be good members of the international economy.
Law-breakers will always find innovative ways to circumvent US sanctions policies. Continually improving and enforcing the US sanctions regime is not only prudent, it is also necessary.
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The latest 200% tariffs announced by the Biden administration fall short of true sanctions. And for tariffs to work effectively, they need to be implemented, not just announced. The administration must also take responsibility, and oligarchs must not be allowed to ignore the rules.
only time will tell.
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