U.S., Ukraine apply new rounds of sanctions against Russia

The U.S. Treasury Department’s Office of Foreign
Assets Control (OFAC) announced on Dec. 19 a new round of sanctions against
Russian officials for violating international norms in their activities in
various countries. Among those targeted is Victor Boyarkin, a former officer of
Russia’s Main Intelligence Directorate (GRU) who reports directly to
billionaire oligarch Oleg Deripaska and has led business negotiations on his
behalf. “Deripaska and Boyarkin were involved in providing Russian financial
support to a Montenegrin political party ahead of the Montenegro’s 2016
elections,” said the statement announcing the sanctions, which also targeted 15
GRU members for their involvement in a wide range of malign activity.

Ukraine’s Cabinet of Ministers decided on Dec. 18 to
apply a new round of sanctions against Russian individuals and enterprises that
pose real or potential threats to Ukraine’s national interests, according to
the press service of the Ministry of Temporarily Occupied Territories. They
target 14 enterprises that provide supplies or services to Russian military
factories on the occupied territories, 23 individuals involved in illegal
archaeological activities or activities legitimizing the Crimean occupation,
Russian firms based in Europe that are involved in Crimea, Russian firms
involved in Crimean ports and individuals involved in illegal construction over
the Kerch Strait.

The same day, the cabinet also extended the activity
of two resolutions that restrict the import of Russian products until the end
of 2019. They impose a ban on numerous Russian exports to Ukraine, including
dairy products, alcohol, hygiene products, pesticides, herbicides, and railroad
equipment, among others. They also extend customs duties imposed on certain
Russian exports as of Jan. 2, 2016.

Zenon Zawada: The
sanctions against Boyarkin and others come just as Deripaska reportedly cut a
deal with U.S. officials to significantly reduce his stake in aluminum producer,
United Co. Rusal (486 HK), in exchange for sanctions being removed from the
company. Sanctions against Deripaska are particularly relevant for Ukraine
because the U.S. government has been targeting him with particular intensity,
likely in the hopes that he could become the weak link in the Putin
administration that could eventually lead to regime change.

As for the Ukrainian sanctions against Russia, those
targeting Russians involved in Crimea will have little impact because they
typically don’t have much business in the Ukrainian mainland. Indeed many
Ukrainian sanctions are largely for political statement, considering how deeply
trade ties have been severed (and increasing restrictions such as Russian males
not being able to even travel to Ukraine under this month’s martial law
conditions).