Russian sanctions coming on Monday, what to expect

Last summer the US Senate passed the Countering America’s Adversaries Through Sanctions Act (CAATSA). Trump was unwillingly singed the act into law on August 2nd 2017. The CAATSA contained sanctions against Russia, Iran and North Korea. We all know this. However, for Russia, sanctions were tightened giving congress full veto power on any plans to ease them.
The CAATSA required that within 180 days = that is the 29th January 2018 (Monday next) that:

Sanctions should be imposed on those knowingly engaging in significant transactions related to Russia’s defence or intelligence sectors

Hence we expect next week to see more sanctions towards entities and / or companies that do transactions with Russian defence and intelligence sector. I believe though, that given that CAATSA was effectively forced on the administration, it is quite likely that the harshest measures will avoided.

How is Russia responding?

There are proposals to extend capital amnesty programmes designed to allow tax-free repatriation of assets held by Russians overseas, and by allowing $3bn of special bonds to be issued allowing business owners a way to hold dollars onshore within Russia. In fact President Putin’s spokesman has said about sanctions that “the principle of reciprocity remains”.

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Conclusion:

The US report will be published on 29th January 2018, Monday. The risk that I see here, is that the sanctions are expanded to include “a oligarch list” and an extension of it to Russian Government debt. If this were to happen I think it would have quite negative implications:

• A worsening of geopolitics
  And / or
• A very negative conclusion to the ongoing investigations in the “Russian influence on the US political process”.

These are important events to be monitoring my friends.
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