US to Impose Export and Other Sanctions on Russian Government over Nerve Gas Attack

After a 15 day Congressional notification period, the sanctions will take effect when published in the Federal Register, which is expected to take place around August 22, 2018.

Under the CBW Act, the following sanctions are required to go into effect:

1. Foreign Assistance. Termination of foreign assistance under the Foreign Assistance Act of 1961, except for urgent humanitarian assistance and food or other agricultural commodities or products. Department of State officials stated there would be a waiver for the provision of foreign assistance to Russia and to the Russian people;
2. Arms Sales. Termination of sales under the Arms Export Control Act of any defense articles, defense services, or design and construction services, and licenses for the export of any item on the United States Munitions List;
3. Arms Sales Financing. Termination of all foreign military financing for that country under the Arms Export Control Act;
4. Denial of US Government Credit/Financial Assistance. Denial of any credit, credit guarantees, or other financial assistance by any department, agency, or instrumentality of the United States Government, including the Export-Import Bank of the United States; and
5. Prohibition on Export of National Security-Sensitive Goods and Technology. Prohibition of the export to the affected country of any goods or technology on the Commerce Control List of national security controlled items.

Of these five sanctions, the fifth, the prohibition on the export of national security controlled items to the Russian Government is likely the most significant. Department of State officials indicated that these export control sanctions will be applied to exports to all Russian state-owned or state-funded enterprises, estimated to be on the order of 70 percent of the Russian economy and 40 percent of the Russian workforce.

Lessening this blow, however, State Department officials indicated there will be carve-outs from the export control sanctions permitting case-by-case licensing of items for export to the Russian Government for:

• Space flight activities;
• Safety of commercial passenger aviation;
• Exports to wholly-owned subsidiaries of US companies and other foreign companies in Russia;
• Deemed export licenses for Russian nationals that are employed by firms in the United States; and
• Possibly other items exported to purely commercial end users for civilian end uses.

The CBW Act requires ratcheting up of sanctions against the Russian Government unless within three months of implementation, the President determines and certifies in writing to the Congress that:

1. The Russian Government is no longer using chemical or biological weapons in violation of international law or using lethal chemical or biological weapons against its own nationals;
2. The Russian Government has provided reliable assurances that it will not in the future engage in any such activities; and
3. The Russian Government is willing to allow on-site inspections by United Nations observers or other internationally recognized, impartial observers, or other reliable means exist, to ensure that that government is not using chemical or biological weapons in violation of international law and is not using lethal chemical or biological weapons against its own nationals.

It remains to be seen whether the Russian Government would be willing to provide these assurances and agree to inspections. If it does not, the additional sanctions are:

1. Multilateral Development Bank Assistance. The United States Government shall oppose the extension of any loan or financial or technical assistance to that country by international financial institutions.
2. Bank Loans. The United States Government shall prohibit any United States bank from making any loan or providing any credit to the government of that country, except for loans or credits for the purpose of purchasing food or other agricultural commodities or products.
3. Further Export Restrictions. The authorities of section 6 of the Export Administration Act of 1979 shall be used to prohibit exports to that country of all other goods and technology (excluding food and other agricultural commodities and products). This means that all items subject to the Export Administration Regulations (EAR) could be prohibited for export to the Russian Government.
4. Import Restrictions. Restrictions shall be imposed on the importation into the United States of articles (which may include petroleum or any petroleum product) that are the growth, product, or manufacture of that country.
5. Diplomatic Relations. The President shall use his constitutional authorities to downgrade or suspend diplomatic relations between the United States and the government of that country.
6. Presidential Action Regarding Aviation. The President is also authorized (but not required) to suspend the authority of foreign air carriers owned or controlled by the government of that country to engage in foreign air transportation to or from the United States.

The President can waive the application of the second round of sanctions if he determines and certifies to the Congress that such waiver is essential to the national security interests of the United States.