Last Thursday, the White House announced that sanctions are to be placed on Russia for its “harmful foreign activities”, interference in US elections and sweeping cyber-attacks on US government and corporations. The impositions also follow strong international condemnation of Russia’s heavy military deployment at the Ukrainian border. The actions target 32 Russian entities and involve the expulsion of certain diplomats. Biden’s sanctions align with his rhetoric in recent months, during which he has promised to make Putin “pay” for attempting to undermine the American democratic process and accused the Russian government of poisoning Alexei Navalny. The sanctions also sharply contrast from recent American policy towards Russia, a period during which Donald Trump rarely criticised Russia or Putin’s belligerent behaviour on the world stage.
What do the sanctions entail?
The wide-ranging sanctions imposed by Biden’s executive order includes “long-feared” restrictions that ban U.S. financial institutions from participating in the primary market for Russian sovereign debt, effective from June 14th. Once news of the sanctions broke, Russian bonds suffered their largest fall in value for months and the rouble dropped by 2.2%, before making a slight recovery later in the day. Still, a large sell-off of Russian assets was sparked. Nonetheless, one senior Russian official said that the new debt restrictions were the “least painful” option, as they will not affect the secondary debt market, while others have said that a reciprocal response is “inevitable”.
In addition to this, 32 entities and individuals have been sanctioned by Biden’s order. The list includes Russian government and intelligence officials, as well as six Russian companies involved in the Kremlin’s hacking activities. Ten Russian diplomats in Washington are also to be expelled. Some worry that the expulsion of diplomats will worsen intergovernmental dialogue between the two nations, but Putin is still thought to be considering Biden’s offer of a US-Russia summit in the near future.
National Security Advisor Jake Sullivan says that the measures taken by the White House are “proportionate” and that their goal is “to provide a significant and credible response but not to escalate the situation”. Indeed, Biden’s sanctions are consistent with America’s handling of Russian transgressions since its annexation of Crimea in 2014: to punish illegal Russian behaviour but not to escalate tensions further, particularly given the anxiety surrounding Russia’s military build-up at the Ukrainian border.
What has inspired the sanctions?
The US has threatened to place additional sanctions on Russia for a throng of misdeeds over recent years. However, the introduction of these specific restrictions has occurred in close proximity to a recent US intelligent report confirming attempts by the Russian government to rig the 2020 presidential election. Additionally, the order follows a review, ordered by Biden, into other key areas of concern with Russian behaviour that include reports of Russian bounties on U.S. soldiers in Afghanistan, the historic SolarWinds cyber-attack and the poisoning of Putin’s pro-democracy rival Alexei Navalny.
The sanctions are viewed as a single, sweeping response to these various Russian wrongdoings, rather than to one particular incident. This is likely the case for two main reasons. Firstly, the US does not wish to escalate tensions with Russia, but rather wishes to signal that the Biden administration has adopted a harder line than his predecessor. Secondly, devising an individual response to the major SolarWinds cyber-attack would be politically difficult for Biden. Some members of Congress described the attack as “an act of war”, while some highlighted that the US conducts similar operations abroad. Treating Russia’s various offences with a single package of sanctions has allowed Biden to maintain his election promise of a strong stance on Russia while avoiding an image of hypocrisy (i.e., sanctioning Russia for activities similar to those that the US partakes in).
Will Biden’s order result in further US-Russia divergence?
The extent to which the sanctions will damage US-Russo diplomatic relations is still unclear. Many believe that overly harsh sanctions on Russia would be inconsistent with Biden’s offer to hold a summit and normalise relations between the two countries. Given that the sanctions are not disastrously severe, and that Putin is still thought to be mulling over the prospect of a US-Russia summit, it seems that relations between the White House and Kremlin will remain similarly strained. However, Biden signalling a firmer approach to Russia than Trump is not a welcome prospect for the Kremlin, and will likely reduce the belief that they can act with impunity. Indeed, a Kremlin spokesman seemed to explain the increased Russian military activity on its Ukrainian border as a kind of bargaining tool in the case of US action, like sanctions.
Overall, it is difficult to know how the sanctions will affect US-Russo relations. If they are enough to prevent Putin from joining Biden at a summit, then they will have had a clearly negative effect. Otherwise, even in the case of roughly equivalent Russian retaliation, the two countries’ relationship will likely remain as it has been over recent years: strained.