Posts Tagged ‘geoff dyer’
US considers sanctions on Russian banks
The Obama administration is considering placing Iran-style banking sanctions on selected Russian financial institutions if Moscow were to send troops into eastern Ukraine.
The banking sanctions are one of a series of measures that the administration has been discussing with Congress in recent days as it seeks to find ways to isolate Moscow diplomatically and economically, according to congressional aides and officials.
Banking sanctions are a powerful tool which take advantage of the US’s central role in the international financial system and which have helped place considerable pressure on the Iranian economy over the past two years. If a Russian bank were targeted, then any bank in the world that continues to do business with it can be cut off from the US financial system.
The banking sanctions are being examined as secondary series of measures, which are aimed more at deterring Russia from taking military action in eastern Ukraine. In response to the immediate crisis in Crimea, the administration is considering placing senior Russian officials on a visa ban and asset freeze list. The idea of broader trade and investment sanctions, which secretary of state John Kerry alluded to at the weekend, is only being analysed as a much more distant prospect.
The debate in Washington over what sort of economic tools to use against Russia comes amid some signs of friction between the US and Europe over how quickly – and how aggressively – to apply economic pressure.
European diplomats have expressed frustration that they are portrayed as dithering while the US is seen as decisive, when the stakes are far higher on their side.
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Cyber theft: A hard war to wage
Washington is angry. Really angry. It is just not sure what to do about it. US officials have accused Chinese hackers of stealing corporate trade secrets since the mid-2000s but during the past few months the outrage has reached a political tipping point. cyber security has been thrust to the top of the agenda in US-China relations.
The Obama administration, members of Congress and the think-tanks that advise them have cast around for ways to punish hackers from China and elsewhere. Washington is considering a series of unilateral trade and other sanctions against Chinese entities and individuals.
“We will start sending a message to countries, especially China, that there is a consequence to your economic espionage,” says Mike Rogers, the chairman of the House intelligence committee who is preparing a bill to penalise hackers. “We should have a dial we can turn up and a dial we can turn down. That means adding some teeth.” When Barack Obama welcomes Xi Jinping for their first presidential meeting on Friday, he will press his Chinese counterpart on the issue of cyber theft.
Yet while political pressure is building for Washington to find ways to do something about the theft of trade secrets, it faces two big problems. First, it is not clear if any of the suggested remedies are workable. Moreover, given that China denies the US allegations, American attempts at retaliation risk escalating into a broader trade war between the world’s biggest economies.
John Veroneau, a former deputy US trade representative, worries that the mounting tensions over cyber theft could cause deep damage to the global trading system. “The great recession did not cause a surge in protectionism despite many predictions,” he says. “But cyber theft is changing things.”
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Magnitsky bill opens door to wider targets
When the Magnitsky bill first started making its way through the US Congress a couple of years ago, its authors had one target in mind: to punish Russian officials behind the death of Sergei Magnitsky, a lawyer who blew the whistle on a government corruption case and died in jail.
With human rights causes, however, one powerful example can sometimes open the door to much broader action. This could well happen with the Magnitsky bill. As the legislation gets closer to passage – potentially this month – the human rights lobby is on the verge of winning an important tool to influence US foreign policy.
While Russian corruption was the initial target, some in Congress are already thinking about other causes it can be used to pursue. And they have some big fish in mind. “If the bill stays as it is at the moment,” says one Senate staff member involved with the legislation, “this will be as much about China as it is about Russia.”When Magnitsky was doing some legal work for the Hermitage investment group, he discovered evidence that a group of Russian officials had effectively stolen $230m in tax payments made by Hermitage. When he detailed his allegations, he was arrested in late 2008 and accused of fraud.
Nearly a year later, he died in jail after being denied medical treatment.
Two years ago, a couple of Democrats in Congress started to push a bill that named the 60 Russian officials and police officers they said were behind Magnitsky’s death.
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Obama set to press Putin on Syria at G20
After a week when it sometimes felt as if the cold war had never ended, Barack Obama will finally get some quiet time on Monday with Vladimir Putin to press the new Russian president on the crisis in Syria.
With senior diplomats from both countries trading unusually aggressive barbs in recent days, Mr Obama plans to use a meeting on the sidelines of the G20 summit in Mexico to privately test whether the US and Russia can find common ground on Syria, according to senior US officials.
The first encounter between the two presidents since Mr Putin’s return to presidential office will be a critical showdown in the diplomacy of the Syrian crisis. But it also will provide an indication of where US-Russia relations are headed under a leader who has a notoriously sceptical view of US power – and who declined to attend last month’s G8 summit at Camp David, a move many interpreted as a snub.
Mr Obama faces the delicate task of trying to forge a good working relationship with Mr Putin while Congress is moving close to passing the Magnitsky bill, which criticises Russia’s human rights record.
Complicating matters even more, Mr Obama is in the midst of an election campaign in which his Republican opponent is looking to pounce on any signs of concessions.
“The Magnitsky case … supports my point that we are in for much more difficult times in the relationship with the US,” says Alexei Pushkov, chairman of the Russian parliament’s foreign affairs committee.
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