EXPLAINER: Why US sanctions can target individual Russians

WASHINGTON (AP) – The White House and US officials have threatened Russia with financial sanctions that will have “serious consequences” if it invades Ukraine, but so far many people have been the prime target of Western pain.

Experts say it’s unlikely the US and its allies would agree to anything as sweeping as a total trade ban with Russia or an embargo. Rather, industries and individuals will likely continue to bear the brunt of the sanctions as the crisis deepens.

The Kremlin has shrugged off sanctions imposed on Russian officials and business leaders by the US and its allies. Spokesman Dmitry Peskov said last week that congressmen don’t seem to realize that Russian law prohibits officials from owning foreign assets.

The US claims that the targets are losing significant revenue and assets to fines that could, for example, curb an oligarch’s shopping sprees and investments.

Geopolitics, Europe’s dependence on Russian natural gas, and Russia’s sheer size are some of the reasons preventing the US from imposing a broader embargo on Moscow, similar to what is being observed in Cuba, North Korea, and Iran.

A look at how and why the West might choose to target sanctions at specific individuals or industries in Russia rather than go big:

WHY TRACK PEOPLE INSTEAD OF ORGANIZATIONS?

Sometimes the narrower thrust is intended to prevent unintentional pain being inflicted on ordinary people or actions that push back Western interests.

A recent report by the Congressional Research Service said the US and European Union intend to impose sanctions “in a way that could persuade Russia to change its behavior while causing collateral damage to the Russian people and economic forces.” Minimize interests of countries imposing sanctions”.

The German leadership has promised that the future of the new Nord Stream 2 pipeline is “on the table” if Russia moves against Ukraine. The pipeline was built to transport Russian natural gas directly to Germany, bypassing Ukraine. A blockade would hit Russia’s gas exports in a crucial market.

WHO ARE THE PEOPLE THAT BECOME TARGETED?

According to CRS, several politically-affiliated Russian billionaires and their companies are targeted by sanctions. The Treasury Department’s Foreign Assets Enforcement Division has listed at least 445 individuals and companies as “specially designated nationals and blocked individuals.” These are largely related to the destabilization of Ukraine, the misappropriation of assets and operations in Crimea, the Black Sea peninsula that Russia took from Ukraine.

Targets include government officials and heads of state companies, including Russia’s interior minister, directors of foreign intelligence and the federal prison service, and the heads of both chambers of parliament. The CEOs of the state oil and gas companies Rosneft and Gazprom, the armaments group Rostec and several banks could also expect sanctions.

WHAT KIND OF SANCTIONS HAS THE USA ACTED AGAINST RUSSIAN IN THE PAST?

Western sanctions imposed when Russia invaded and annexed Crimea in 2014 included trade restrictions, the freeze on assets under American jurisdiction and restrictions on access to the US financial system, which remain in place for at least 735 individuals, entities and ships to this day to the Office for Foreign Assets Control.

Last year, the US imposed additional sanctions.

This month, the US Treasury Department sanctioned four people – two of whom are members of Ukraine’s parliament – allegedly involved in Russian government-led activities aimed at destabilizing Ukraine. Last April, 16 individuals and organizations were sanctioned for what Treasury Secretary Janet Yellen described as “the start of a new US campaign against Russian malicious behavior.”

White House press secretary Jen Psaki recently warned that Russian President Vladimir Putin and his top officials could face personal penalties over Crimea “far beyond what was done in 2014.”

HOW EFFECTIVE ARE SANCTIONS AGAINST INDIVIDUALS?

Personal sanctions are not nearly as effective as those against industries, which the administration is also considering. But they can cause psychological pain and turn targets into international pariahs. For example, some Republicans in Congress want the US to consider sanctions against Alina Kabaeva, an Olympic gold medalist in rhythmic gymnastics who is said to be Putin’s girlfriend.

Assets owned by Putin himself are hard to come by.

“His fortune is hidden all over the world and it’s not easy to track down this stuff. But it will make his life more difficult,” said Scheherazade Rehman, professor of international economics and international affairs at George Washington University.

Asked last week whether Biden was keeping the door open to personal sanctions against Putin if Russia invaded Ukraine, Peskov warned that such a move would be “politically destructive” for Russia’s relations with the US

US sanctions against Russia can have wide-ranging economic effects when applied to economically significant targets – and some programs do this by both targeting specific individuals and companies and prohibiting specific types of transactions.

WHAT OTHER TYPES OF PENALTIES ARE IN THE US TOOLKIT?

Multiple federal agencies may also have a role in enforcing sanctions or restricting commercial activities. The State Department can restrict visas and foreign aid, and the Commerce Department can restrict licenses for commercial exports. The Department of Defense can restrict arms sales, and the Department of Justice can prosecute those violating export laws. In addition, the Department of Homeland Security and the FBI can review visas issued for travel to the United States.

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Associated Press writers Vladimir Isachenkov in Moscow and Aamer Madhani in Washington contributed to this report.

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