On the eve of the US elections, supporters of sanctions against Russia are stepping up their efforts. On Thursday night, five congressmen from both parties submitted an anti-Russian sanctions bill to the lower house of Congress, similar to Senators Marco Rubio and Chris Van Hollen’s DETER Act presented back in 2018. It presupposes sensitive sanctions – for example, a complete ban on investment in the Russian national debt in the event of Russian interference in the American elections.
The bill was introduced by four congressmen (two from the Republican and Democratic parties), led by the representative of the state of Illinois, Democrat Brad Schneider. Among the co-authors is the deputy Brad Sherman, known for his tough stance towards Russia – a year ago he proposed to amend the US defense budget to completely ban operations with the Russian national debt. Now American banks are prohibited from participating only in the initial placements of Russian Eurobonds, but not in the ruble OFZ, which make up the bulk of the state debt.
The text of Schneider’s draft has not yet been released, but a press release from the congressman says that it is a mirror bill (Companion Bill), duplicating the Senate DETER Act, introduced in 2019 by Senators Marco Rubio and Chris Van Hollen. Mirror bills are introduced to ensure their simultaneous consideration by both chambers of Congress (in the usual case, one chamber first votes for an act, and then another). It is believed that this can speed up the passage of the project and increase its chances of acceptance.
The DETER Act was first introduced in the summer of 2018 as a response to a bilateral meeting between Donald Trump and Vladimir Putin in Helsinki, which Trump’s opponents considered almost treason. In April 2019, the authors submitted a revised version of it to the Senate.
According to the draft (you can read its full text here), within 30 days after the US federal elections, the director of the Department of National Intelligence (DNI) must determine whether Russia or other foreign states interfered in the elections. Interference implies illegal gaining access to the electoral infrastructure, creating obstacles in the operation of the electoral system, illegal posting of electoral advertisements and, most importantly, disseminating information on social networks or the media in the United States without indicating that it is being distributed by a foreign government or its agents.
If the head of the DNI states that a Russian intervention has occurred, the following sanctions are automatically imposed against the country:
- The blocking of all assets in the United States, as well as the prohibition or strict restrictions on the opening and use of correspondent accounts in the United States of two or more of the five Russian systemic banks: Sberbank, VTB, Gazprombank, VEB, and Rosselkhozbank.
- A ban on all transactions with debt obligations of Russia, including government bonds issued after the introduction of new sanctions, as well as with all debt obligations of state-owned companies.
- Blocking all American assets of “high-ranking politicians and oligarchs” included in the report of the director of national intelligence. They will also be denied a visa and expelled from the United States.
- A ban on any new investments in the Russian fuel and energy sector by citizens and legal entities who are American residents or work in the United States.
- Six months after the sanctions were imposed, the president is obliged to submit to Congress a report on the assets and property – as well as the sources of their receipt – Russian President Vladimir Putin and other high-ranking Russian officials.
This summer, the authors of the DETER Act, the second time, managed to introduce it as one of the amendments to the US defense budget. Each of the two chambers has already approved its own version of the budget, but the agreed version is unlikely to be adopted before the November 3 elections.
Ivan Timofeev, program director of the Russian International Affairs Council, is not surprised that the Congress returned to the DETER Act during the election campaign: the topic of Russian interference in the American media and political circles sounds and it would be strange if it did not sound, he says.
Even now Timofeev assesses the chances of passing the bill as low and considers its introduction to the House of Representatives as a political gesture of congressmen. Firstly, in the United States, at the level of Donald Trump’s executive order 13848, there is already a legal mechanism for determining the fact of foreign interference in elections and applying sanctions in this case, Timofeev explains, and this mechanism was even used after the 2018 congressional elections. Then it was concluded that there was no interference. This suggests that the DETER Act mechanism is redundant.
Secondly, the measures proposed in the DETER Act are rather harsh and at the same time deprive American diplomacy and leadership of flexibility, Timofeev said. “Blocking sanctions against large banks will shock the markets and hurt Russia. To accept such sanctions without a good reason means going on a very serious escalation in relations, this is a risk for financial markets, ”he says. The DETER Act obliges the White House to impose sanctions automatically in the event of interference in elections – and the administration needs a tool that will leave it with the choice of using sanctions at a convenient moment. And the third, the main argument – there are no serious signs that now there is Russian interference in the elections, the expert concludes.