Russia

The One Big Problem With New Russia Sanctions

Congress won't let Trump waive penalties, which gives Moscow no reason to change its behavior.

Awkward.

Photographer: Saul Loeb/AFP/Getty Images

The latest round of congressional sanctions against Russia garnered much attention for the message they sent to President Donald Trump: We don’t trust you to decide when to lift or ease sanctions on Moscow. True, it was an important signal to the American people, the president and the rest of the world that nearly all of America’s legislators felt Russia had to pay a price interfering in the 2016 U.S. presidential elections.

But there were two other important messages embedded in the sanctions bill that are equally interesting and consequential.

The statement of congressional distrust of the president was indeed remarkable. It is extremely unusual for a bill instituting sanctions or other penalties not to give the president some power to override or delay them. This is usually achieved through a built-in "national interest waiver." For example, President Bill Clinton used waivers to diffuse growing tension between the U.S. and Europe over the 1996 Iran-Libya Sanctions Act, which called for secondary sanctions on European firms that invested in the energy sectors of those two countries.

The new law does include a national interest waiver, but a weak one -- it does not give the White House the final word on whether sanctions are implemented or lifted. Instead, Congress can to review any presidential move to issue a waiver within 30 days of the executive branch informing lawmakers of its intention to employ it.

While this override of a traditional presidential prerogative got most of the attention last week, it's important to consider the other messages Congress sent. The second was perhaps unintentional -- and it was about the type of Russia strategy lawmakers want to see the administration pursue. In my 2003 book "Shrewd Sanctions," I identified three broad types of approaches to economic coercion: one for containment, one for regime change and one for behavior change. Depending on the goal policy makers have in mind, the structure of the sanctions regime should be crafted accordingly.

Most legislators, I imagine, would say that the purpose of these sanctions is to penalize Russia for its interference in the U.S. elections, to deter it from similar action in the future, and to convince it, ultimately, to cease its meddling in domestic American affairs altogether. In short, they want Russia to change its behavior.

Yet by taking away the administration’s ability to calibrate sanctions in response to improvements in Russian actions, Congress essentially handcuffed the executive branch in terms of trying to change Russian behavior. Where sanctions have been an effective tool in this approach -- such as in the normalization of relations with Vietnam or the more recent effort to get Iran to the nuclear negotiating table -- the executive branch needed both flexibility and credibility in promising carrots like the lifting of sanctions to the country in question.

But now, the authority to lift or maintain sanctions on Russia effectively rests with the 535 members of Congress. As a result, the Trump administration cannot promise with confidence that a positive move by Moscow will be met with a reciprocal action by the U.S. No country knows the hazards here better than Russia, due to its experience with the 1974 Jackson-Vanik amendment -- a law denying the Soviet Union (and then Russia and other post-Soviet states) permanent normal trade relations with the U.S. until it allowed the free emigration of Soviet Jews.

The Clinton administration certified that Russia was in full compliance with the amendment in 1997. But it was not until 2012, when Russia joined the World Trade Organization, that Congress “graduated” Russia from Jackson-Vanik, and even then, it did so in the context of the newly passed Magnitsky Act, which imposed other sanctions based on human-rights abuses. As this historical episode suggests, by giving Congress the ultimate say in whether sanctions are lifted or eased, the new law essentially limits the ability for the U.S. to pursue a pragmatic strategy toward Russia -- one that seeks cooperation in some areas and accepts confrontation in others. Instead, it makes a firmer but less nuanced containment approach to Moscow almost inevitable.

While the first two messages of the sanctions law were clear warnings to the Trump administration, the third signal is one the White House should welcome. While Congress clearly does not want Trump negotiating with Russia, it encourages him and his team to negotiate with others about Russia. It gives the executive several additional tools -- and the discretion to use them or not -- to cajole our European and Asian allies, among others, into aligning their strategies with a tougher Washington line.

For instance, the law gives the administration license to penalize companies constructing pipelines to transport Russian natural gas to Europe, but does not require that Trump put them in place. Similarly, the law includes sanctions to terminate U.S. and foreign-company involvement with the Russian defense and intelligence sectors. But it also gives the Trump administration significant flexibility in how -- and even whether -- these measures are enacted against non-American entities.

It is how these additional tools are used that will in the end decide whether the sanctions are a gift or a scourge to Russia. If employed wisely by the Trump administration, they will create leverage in getting our partners not to undermine pressure on Moscow by allowing their firms to fill in where American companies have been made to pull out. The ability to decide not to employ certain sanctions against foreign companies could provide Trump a heightened ability to get other countries to join in upping the ante on Russia in other sectors. This sort of pragmatic multilateral action is a key to a successful sanctions regime.

Alternatively, if these additional tools are used brazenly by the Trump administration, they could well help Russian president Vladimir Putin achieve one of his most coveted goals: dividing the U.S. and Europe. Understandably, the Europeans are already nervous. The row over the Iran-Libya Sanctions Act is still fresh in their minds.

Trump’s unwillingness to acknowledge what a majority of Americans and virtually all members of Congress seem to believe -- that Russia tried to interfere in the U.S. presidential election -- invited the new sanctions legislation. Yet in giving the president an unusually small amount of discretion, Congress did much more than slap Trump on the wrist. It drove the U.S. squarely in the direction of a policy seeking solely to contain Russia, limiting options for a more sophisticated approach of using economic pressure to move the Kremlin back in line with some basic norms of international behavior.

Policy makers should be nervous about an approach that tells Russia that no change in its actions will be rewarded. To correct the balance, Congress could look for an early opportunity to signal that, while it retains oversight over the sanctions, it is willing to review and, where appropriate, make adjustments. Moreover, while encouraging Europeans to increase their pressure on Russia, the U.S. could make explicit some off-ramps in a signal to Moscow that a change in its behavior would be welcomed and acknowledged by the international community.

Otherwise, with the risk-taking Vladimir Putin ruling the Kremlin, these sanctions could easily result in more Russian bad behavior rather than less.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Meghan L. O'Sullivan at Meghan_OSullivan@hks.harvard.edu

    To contact the editor responsible for this story:
    Tobin Harshaw at tharshaw@bloomberg.net

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