Ever since the release of Special Counsel Robert Mueller’s report, Russian business leaders and officials have been pushing Washington not to implement any new sanctions on Moscow or its interests. In a series of meetings and phone calls over the last several weeks, Russians advocating for stronger ties between the two countries have urged U.S. officials to consider focusing on ramping up business partnerships instead of imposing sanctions, according to three American officials.
Those involved, some of whom spoke to The Daily Beast, said they viewed the Mueller Report as a win for Moscow and an opportune time to push forward with the campaign.
The push by Russians and other foreign individuals with business interests in Russia to deter additional sanctions is not new—but has ramped up in recent weeks. For two years an organized group of advocates have met with Washington officials to try to dissuade it from continuing to use sanctions as a foreign policy tool against Russia. In meetings and calls with the Treasury Department and top Democrats on the Hill, business tycoons and advocates argued that sanctions would likely do nothing to change Russian behavior, including preventing it from interfering in elections.
“All the sanctions did, in retrospect, was make it more difficult for the U.S. and Russia to cooperate on a business level,” one American with a prominent business in Russia told The Daily Beast. “And it ended up hurting big-time American businesses with shops in Moscow.” That source said American bankers in Russia in particular were feeling the ramifications of the sanctions.
The rigorous appetite to further sanction Russia for its election interference that once existed on Capitol Hill seems to have faded. A recently drafted piece of legislation has been introduced in Congress that could potentially sanction Russian sovereign debt—the money owed by Moscow to its creditors. But experts such a bill would was unlikely to move forward given how it would impact world markets.
“There are still conversations happening about the possibility of more sanctions coming, but it is really hard to tell if those are a priority to those in Congress right now,” said Angela Stent, a former national intelligence officer for Russia under President George W. Bush. “I think that if you look at the sanctions they have have caused some economic pain in Russia but they haven’t changed much Russian policy. And that idea is certainly gaining more traction in the debates you see around town.”
Those outwardly speaking out against the American sanctions have seized on the opportunity, pushing their long-standing views that the U.S. and Russia should work to normalize trade relations.
According to two individuals with direct knowledge, members of the American Chamber of Commerce in Moscow—a foreign business organization that advocates for stronger private sector ties between the U.S. and Russia—met with Treasury officials two weeks ago in Washington about the need for more business partnerships. Sanctions were making that difficult, they said.
In the meeting, the Russian individuals impressed upon Treasury officials not only the need to hold off on additional sanctions, but also the necessity for the department to conduct more thorough economic impact analyses before announcing designations.
A Treasury spokesperson would not comment on the meeting in Washington two weeks ago but said the department “has regularly and carefully assessed the impact of potential sanctions as a matter of course.”
The discussion between Treasury and the Russian businessmen at one point touched on the designation of oligarch Oleg Deripaska—the one-time patron of jailed Trump campaign chief Paul Manafort—and his companies Rusal and EN+, two enormous firms with a major footprint in the world aluminum market, two individuals present said.
The Treasury Department didn’t simply implement limited financial measures against Deripaska’s companies as it has with other Russian businesses and state-owned enterprises in the past. It blacklisted them—a much more extreme measure.
The American Chamber of Commerce in Moscow, along with a network of business leaders in Russia and the U.S., have pushed Treasury to lift those sanctions to help the world aluminum market.
Eight months later the Treasury Department and Deripaska announced that they had come to a deal whereby the oligarch would divest himself of his stake in the companies and remain personally sanctioned in exchange for lifting the sanctions on his companies.
Parts of the deal leaked to the press, undercutting some of its support as details showed that he transferred some of his shares in EN+ to his children. Treasury vigorously defended its agreement with Deripaska, with current and former Treasury officials described it to The Daily Beast as a “win” for the administration.
“We were able to sever the control of Oleg Deripaska, an oligarch closely linked to the Kremlin, over important companies instrumental to global aluminum markets,” said Unders Secretary Sigal Mandelker when she testified in front of Congress in March.
Others on Capitol Hill argued the deal gave Deripaska the ability to maintain de facto control over his companies.
“No one in the U.S. government had thought about the broader implications in Europe and other places when they sanctioned Rusal,” Stent said. “And so you’ve seen the walkback of those sanctions since then. And you now see Deripaska still essentially maintaining control over a major stake.”
One Moscow-based official said following the Rusal designation the Russian business community still wants assurances that the U.S. will do more to communicate with their community on the potential impacts of Russian sanctions on trade, especially if the designations targeted institutions with a dominant presence on the world stage.
Meanwhile, the conversation about how to actively coordinate business between the U.S. and Russia is a regular topic of conversation among Americans, including some officials, and Russian businessmen in Moscow. Over the last several months executives from U.S. companies sat on a panel with Russian executives to talk about the path forward for cooperating in the technology sector.