Don’t ‘Burn Down The Barn To Get Rid Of The Rats’ With Sanctions On Russia

by Major General Bob Dees: As a former Army officer, I was sickened by reports that Russia was paying bounties for killing American soldiers fighting the Taliban in Afghanistan. In the face of credible intelligence that Russia remains determined to spread division and misinformation as U.S. elections near, the United States is justified in taking punitive action.

The challenge in formulating a meaningful response is avoiding unintended consequences. However wide the chasm between our perceived interests, the two countries are tied together economically and geo-strategically. We cannot allow our just outrage to drive policy that unintentionally hobbles the U.S.

The gravity of Russia’s latest affront has stirred discussions of tough, new economic sanctions and renewed support for the Defending American Security from Kremlin Aggression Act (DASKA), specifically from sponsor Senator Robert Menendez (D-NJ). However, if passed in its current form, the measure could reverberate back negatively on the U.S. economy more than Russia as we cope with a global pandemic and its economic fallout. In essence, Congress must not “burn down the barn to get rid of the rats.”

Approved by the Senate Foreign Relations Committee late last year, DASKA’s worthy intent is to punish Russia for its past infractions and establish new contingencies to combat future election intrusion. For example, the legislation institutes an Office of Cyberspace and Digital Economy at the State Department and works to counter Russian disinformation efforts and other emerging threats by creating a National Fusion Center to respond to hybrid threats. These steps will be helpful in bridging gaps in America’s cyber defense.

Unfortunately, the measure also carries the risk of self-inflicted economic damage for the U.S. and the forging of stronger ties between America’s foes and Russia. DASKA has the potential to significantly harm U.S. global economic competitiveness by dissolving American relations with Russian industry, specifically the energy, aerospace, and agricultural sectors.

For example, provisions of the sanctions legislation would prohibit U.S. engagement in crude oil production and projects worldwide that have a nexus with Russian enterprises. Industry groups estimate that the legislation would force American companies to withdraw from nearly 150 energy projects that involve Russian firms in more than 50 countries.

As written, the legislation would effectively eliminate Russian-American business dealings with goods, services, technology, financing or other support of energy projects. This would bring considerable harm to American companies that make parts, equipment and provide services to these international projects. These companies employ thousands of Americans, drive economic growth, and enhance our energy security.

From the State Department to small business advocacy groups, a variety of players in the international relations, defense, and business advocacy space have highlighted concerns around DASKA. The Small Business and Entrepreneurship Council recently sent a letter that extensively details the direct impacts on American industries operating in Russia.

Regrettably, the problems with DASKA go even further. For example, sanctioning new Russian sovereign debt (another DASKA target), would weaken the dollar in the world economy and could have “negative spillover effects” on global financial markets and businesses. Furthermore, the legislation would enable Russia to fill the vacuum left by withdrawing U.S. businesses in strategically important markets with our nemeses abroad. Important markets in Central Asia and Eastern Europe will likely be ceded to Chinese or Iranian interests.

Existing sanctions legislation is also at risk of being undermined by DASKA. The Countering America’s Adversaries through Sanctions Act (CAATSA), passed in 2017, imposes targeted sanctions on individuals conducting business with malignant Russian actors. In March 2018, it was used to sanction five entities and nineteen individuals involved in election interference, allowing the United States to punish malignant actors with targeted sanctions without disrupting the global economy as a whole.

DASKA, if enacted in its current form, would undermine a delicately balanced and effective sanctions policy. In addition, the bill would prevent the President from waiving or terminating individual sanctions, no matter how justified. Blanket, indiscriminate sanctions are more likely to advertently tip the scales against American interests abroad.

I am a believer in hard-nosed international policies that punish our enemies, but policymakers must always consider the collateral damage to American interests. Russia’s complicity in killing American soldiers and its attempt at election sabotage require action, but hasty enactment of DASKA would be a flawed response. Now is the time for Congress to consider ways to strengthen and refine the bill so it would inflict economic pain and political pressure on Russia’s ruling elite and shore up rather than undermine U.S. economic and strategic position around the globe.
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Bob Dees is a retired Major General an experienced field commander with significant European and Pacific expertise, and a graduate of the Royal College of Defense Studies in London, England. H.T. Issues & Insights.

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