The US Treasury Department’s Office of Foreign Assets Control on Thursday published an amendment to President Barack Obama’s sanctions order against Russia to “authorize certain transactions” with Russia’s Federal Security Service.
The new authorization will allow US companies to pay up to $5,000 a year to the FSB – which oversees technology imports into Russia – to secure licenses from the security services to export information technology products to Russia, as long as other aspects of the sanctions order aren’t violated, according to the document published by the Treasury.
Obama issued harsh sanctions against the FSB – first in April 2015 and again in December of last year – which it accused of playing a role in hacking campaigns targeting US citizens and infrastructure during the 2016 presidential campaign.
US citizens and companies were prohibited from doing business with FSB entities under Obama’s Cyber-Related Sanctions Designations, known as Executive Order 13694. But that may have been an “unintended consequence” of the original sanctions order, according to Eric Lorber, a senior adviser at the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance.
“The new General License permits US persons who are shipping technology goods to Russia (which is generally permitted) to get certificates/licenses, etc. from the FSB to continue exporting those goods to Russia,” Lorber wrote on Twitter.
“Once the FSB was designated [by Obama], however, securing these licenses became prohibited, and US exporters could no longer send their goods to Russia,” Lorber continued. “This was very likely an unintended consequence of the 13694 designation, and hence why OFAC provided a GL to correct” it.
“What likely happened is [OFAC] got a high enough volume of specific license requests” from American companies “that they decided to issue a GL,” Sam Cutler, a Senior Analyst at Horizon Client Access and former policy adviser at Ferrari & Associates – a Washington, DC-based law firm specializing in OFAC representation and compliance – wrote on Twitter. “The Executive Order was never intended to stifle US exports into Russia, it was to target the FSB.”
Nikolai Kovalyov, the former director of the FSB who is now a member of Russia’s State Duma, or lower house of parliament, characterized the Treasury’s move as an “easing” of sanctions that “shows that actual joint work on establishing an antiterrorism coalition is about to begin.”
“This is the first step on the way to leading to cooperation in the war on terror,” Kovalyov told the Russian news agency TASS. “Without easing these sanctions it would have been impossible to take the next step. These practical actions indicate that US President Donald Trump has been consistent.”
Russian state media is apparently interpreting the Treasury’s change as a broad easing of the sanctions against the FSB. TASS wrote that the Treasury change meant that “all transactions and activities” involving the Russian Federal Security Service had become “authorized with certain exceptions.”
House minority leader Nancy Pelosi slammed the Treasury change in a statement on Thursday:”Putin’s thugs meddle with an American election, and President Trump gives them a thank you present. I have been asking the same question for awhile: What do the Russians have on President Trump?”
White House press secretary Sean Spicer said on Thursday, however, that the Trump administration was “not easing sanctions” on Russia. He argued that it’s “common for Treasury after sanctions are put in place to go back and look at specific carve-outs for different industries or products and services.”
“It is a regular course of action that Treasury does often when sanctions are imposed,” Spicer said.
The change came during Trump’s second week in office. Trump and Russian President Vladimir Putin spoke by phone last Saturday in a call in which they “underlined the importance of restoring mutually profitable trade and economic connections between the business circles of the two countries,” according to a readout from the Kremlin.