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Obama's Russia Sanctions Elicit A 'Meh' From Moscow To Washington

03/17/2014 06:11 pm 18:11:26 | Updated Mar 18, 2014

WASHINGTON -- The United States responded Monday to Crimea's secession vote by announcing sanctions against seven Russian and four Ukrainian officials. The goal was to impose costs on Russia for making military moves in Ukrainian territory and encouraging Crimea to rejoin the Russian Federation.

"The actions we're taking today have an impact in making very clear that we are imposing real costs on the Russians and on the Russian economy for the actions that have occurred and setting up a very clear deterrence for being contemplated," said a senior Obama administration official on Monday.

The individuals under sanction are prohibited from conducting business with U.S. citizens or in U.S. dollars, which the official said would have an impact on "some or all" of them. "The people who we designate tend to find great difficulty in accessing financial services elsewhere in the world, particularly in Europe and the Gulf," the official added.

But the dire tone coming out of the White House was not shared by many who stand to lose the most from the sanctions. In Moscow, sanctioned Russian officials mocked the U.S. announcement, while in Washington, U.S. lobbyists who represent foreign clients said they were relieved that the sanctions amounted to little more than a slap on the wrist. Even the Moscow stock markets, which had been dragged down by the uncertainty in Crimea, responded positively to the news, posting some of the first gains they've had in weeks.

In Russia, one sanctioned official, Dmitry Rogozin, the deputy prime minister of Russia in charge of defense, used Twitter to ridicule the U.S. action. "I think some prankster prepared the draft of this Act of the US President)," he wrote. "Comrade @BarackObama, what should do those who have neither accounts nor property abroad? Or U didn't think about it?)"

Andrei Klishas, a Russian lawmaker who was targeted, said that the U.S. rebuke was "no tragedy" for him and that he was happy to be in the company of the other sanctioned Russians. Yelena Mizulina, a member of Russia's parliament best known for authoring the country's controversial anti-gay propaganda legislation, said she owned no U.S. "real estate" and was "surprised" to be included, given that her role in the Crimean vote was "very modest."

One particularly juicy response came from adviser to Russian President Vladimir Putin and spinmeister Vladislav Surkov, known as the "grey cardinal" of the Kremlin. "I see the decision by the administration in Washington as an acknowledgment of my service to Russia. It's a big honor for me. I don't have accounts abroad," he told the Russian newspaper Moskovsky Komsomolets. "The only things that interest me in the U.S. are Tupac Shakur, Allen Ginsberg, and Jackson Pollock. I don't need a visa to access their work. I lose nothing."

In Washington, the narrow scope of the sanctions drew sighs of relief from the city's lobbyists, many of whom have energy and banking clients that could stand to lose tens of millions of dollars should tensions escalate further between the U.S. and Russia. According to one lobbyist with foreign clients, the sanctions amounted to the narrowest action the United States could have taken while still appearing to "take action."

Speaking on background, the lobbyist said the U.S. announcement came as no surprise to her or to her clients, which include foreign governments and major corporations with business in Eastern Europe. "We knew [the Crimean] vote was coming, and U.S. sanctions have been part of the deal since the beginning," she said. The sanctions "are surgical and designed not to create future problems."

For those lobbyists who represent Russian business interests in the United States that could draw Treasury Department scrutiny under the new sanctions, the answer is just to change the payment structure, said another lobbyist on background. "The funding mechanism is the easiest thing to get around," said the lobbyist, referring to the new prohibition on conducting business with the sanctioned Russian officials. "All it takes is a nonprofit group that will pay you to do the work," thereby creating a diversionary paper trail -- one that doesn't trace back to a sanctioned individual.

The casual attitude of both the lobbyists and the Russians regarding the sanctions was compounded by the fact that some key players in Putin's Crimea strategy escaped any sanctions at all. A detailed report in the Russian newsmagazine Kommersant Vlast' identified more than a half-dozen top Russian officials who helped craft Ukraine policy. Only three of these men were on the American sanctions list -- Rogozin, Surkov and Putin adviser Sergey Glazyev.

Key officials absent from the list included First Deputy Prime Minister Igor Shuvalov, Finance Minister Anton Siluanov, Foreign Affairs Minister Sergei Lavrov, his deputy Grigory Karasin, and Russia's ambassador to Ukraine, Mikhail Zurabov. Also missing were any executives at Gazprom, Russia's state-owned gas corporation and the main supplier of natural gas to Ukraine, which has threatened to end discounts to that country. A White House spokeswoman said that the Obama administration could respond with further sanctions as events developed.

Complicating matters is the fact that those top three Russians sanctioned by the United States -- Rogozin, Surkov and Glazyev -- have been dropped from a list of officials who will be sanctioned by the European Union, according to The Wall Street Journal. A senior Obama administration official dismissed the significance of any differences between the U.S. and EU sanction lists, saying that the joint actions had a "multiplying effect."

Russian stock indices -- which have been in the dumps since Russian troops entered Crimea more than two weeks ago -- rose with the realization that the sanctions were limited to individuals, not companies.The RTS went up 4.9 percent, and the MICEX rose 3.7 percent.

Putin also appeared unmoved by the sanctions. On Monday, he signed a decree declaring Crimea a "sovereign and independent" state.

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