- The Washington Times
Thursday, April 15, 2021

The Biden administration imposed its first sanctions on Russia on Thursday to punish Moscow for the “SolarWinds” cyber-espionage attack against the U.S. government and private companies, and for efforts to influence the 2020 presidential election.

The executive order signed by President Biden expels 10 diplomats from the Russian Embassy in Washington, sanctions more than three dozen individuals and entities, and bans U.S. financial institutions from trading in newly issued Russian state-debt and bonds.

Mr. Biden, who spoke to Russian President Vladimir Putin by phone Tuesday, said the sanctions were a response to the “unusual and extraordinary threat to the national security, foreign policy and economy of the United States posed by specified harmful foreign activities of the government of the Russian Federation.”

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“I was clear with President Putin that we could have gone further,” Mr. Biden said. “I chose to be proportionate. The United States is not looking to kick off a cycle of escalation and conflict with Russia.”

But Russian officials said Thursday that retaliation from Moscow was a certainty.

Mr. Biden said he told Mr. Putin to “refrain from any military action” against Ukraine or in the Crimean Peninsula, which Russia annexed from Ukraine in 2014.

“Now is the time to de-escalate,” Mr. Biden said. “We want a stable and predictable relationship.”

He said the U.S. sanctions are “measured and appropriate” but if Russia continues to interfere in U.S. elections, “I’m prepared to take further action to respond.”

By taking action, the U.S. formally blamed Moscow for the sophisticated cyberattack that breached nine U.S. agencies and about 100 of the largest American companies. The administration said the attack was masterminded by the SVR, a Russian intelligence agency that was also involved in the hacking of the Democratic National Committee ahead of the 2016 presidential election.

The sanctions were imposed as Russia was building up its military on the border of Ukraine and in Crimea.

The Russian Foreign Ministry said Thursday that it called in U.S. Ambassador John Sullivan to complain about Mr. Biden’s moves and that it prepared a “harsh message” for the American envoy.

Foreign Ministry spokeswoman Maria Zakharova said the U.S. was entirely to blame for the sharp deterioration in bilateral relations in recent months, The Moscow Times reported.

“Washington must realize that it will have to pay a price for degrading bilateral relations,” she said. “Such aggressive behavior will certainly receive a firm response, and the retaliation to sanctions will be inevitable.”

The Kremlin has said Mr. Putin would be far less likely to take up Mr. Biden’s offer earlier this week for a face-to-face summit if Washington went forward with the sanctions.

Although the sanctions were Mr. Biden’s first major confrontation with Moscow, he held back from steps urged by some lawmakers in both parties, including sanctions over the Nord Stream 2 gas pipeline between Russia and Germany and the poisoning of Russian opposition leader Alexei Navalny.

The top Republican on the House Foreign Affairs Committee, Rep. Michael T. McCaul of Texas, said imposing the sanctions was a “necessary step” but expressed concern that they will “fail to establish a credible deterrent.” He said the administration should have included congressionally mandated sanctions against the gas pipeline.

“If the Biden administration is serious about imposing real costs on the Putin regime’s efforts to undermine U.S. democratic institutions and weaken our allies and partners, then it must ensure the Russian malign influence Nord Stream 2 pipeline project is never completed,” Mr. McCaul said. “I urge the Biden administration to make additional sanctions designations today on the numerous entities widely known to be actively involved in the pipeline project as is required by congressionally mandated sanctions.”

Senate Foreign Relations Committee Chairman Robert Menendez, New Jersey Democrat, said the sanctions are “a welcome departure from four years of Donald Trump’s pandering to Putin.”

“It is reassuring and frankly a relief to have a president willing to clearly call Putin what he is: a killer, a military aggressor in Ukraine, a source of malign influence, a cyberthreat,” Mr. Menendez said.

He said there was “plenty of room to escalate sanctions against key Russian financial and energy actors.”

“As the security situation in Eastern Ukraine grows increasingly tenuous and the Kremlin continues to try and kill imprisoned opposition leader Alexei Navalny, I urge the administration to consider additional measures” against Russian banks, Mr. Menendez said. “I also look forward to working with the administration in its efforts to stop the Nord Stream 2 pipeline.”

The sanctions include:

⦁ Freezing assets of 16 people and 16 entities related to Russian election interference efforts, including SouthFront, NewsFront and the Strategic Culture Foundation, described as disinformation sites with ties to Russian intelligence, and Yevgeniy Prigozhin, a backer of the Internet Research Agency.

⦁ Expelling 10 Russian diplomats, many connected with intelligence operations, from the Russian Embassy in Washington.

⦁ Prohibiting U.S. financial institutions from participating in the primary market for ruble or non-ruble denominated bonds issued after June 14 by the Central Bank of Russia, the National Wealth Fund of the Russian Federation, or the Russian Ministry of Finance. U.S. financial institutions also are barred from lending to those entities.

⦁ Authorizing economic sanctions against Russian government hackers and the information technology companies supporting them, including a half-dozen Russian companies that conduct research and development and technical support to Russian intelligence. The best-known sanctioned company is Positive Technologies, a cybersecurity firm with a global clientele, including major banks and telecommunications businesses.

Analysts said the sanctions are raising the stakes in Washington’s relations with Moscow.

Eric Lorber, senior director of the Foundation for Defense of Democracy’s Center on Economic and Financial Power, said Mr. Biden’s action “is a significant escalation” of the U.S. sanctions on Russia.

“The new executive order is expansive; it allows the U.S. government to target anyone operating in any sector of the Russian economy,” Mr. Lorber said. “That puts U.S. companies operating in Russia on notice that their customers and counterparties could be sanctioned at any time and will likely make U.S. companies think twice about conducting business in Russia.”

Yuval Weber, an assistant professor at the Bush School of Government and Public Service at Texas A&M University, said the sanctions “are unlikely to change Russian behavior in any substantive sense” because Mr. Putin can’t afford to be seen at home backing down against a foreign power.

But he said the sanctions put Moscow on notice “much more explicitly” about what the U.S. won’t tolerate, and they raise “a new area of sanctions” by blocking Russia from taking on new debt.

The Treasury’s Department’s office of foreign assets control took action against 16 entities and 16 individuals who it said attempted to influence the 2020 U.S. presidential election “at the direction of the leadership of the Russian Government.”

“The president signed this sweeping new authority to confront Russia’s continued and growing malign behavior,” said Treasury Secretary Janet Yellen. “Treasury is leveraging this new authority to impose costs on the Russian government for its unacceptable conduct, including by limiting Russia’s ability to finance its activities and by targeting Russia’s malicious and disruptive cyber-capabilities.”

She called it “the start of a new U.S. campaign against Russian malign behavior.”

One of the Russians cited in the Treasury report is Konstantin Kilimnik, a former associate of Trump campaign chairman Paul Manafort who is identified as a Russian intelligence agent.

The Treasury Department said Thursday that Mr. Kilimnik provided Russian intelligence services “with sensitive information on polling and campaign strategy” during the U.S. presidential election in 2016 and “sought to promote the narrative that Ukraine, not Russia, had interfered in the 2016 U.S. presidential election.”

⦁ David R. Sands contributed to this report.

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