Russia to Sanction USA

Russia to Sanction USA

Russian lawmakers have drafted a bill suspending cooperation with US companies in the nuclear, missile and aircraft-building spheres, as well as introducing restrictions on imports of alcohol and tobacco produced in the US.

“The bill is about alcohol and tobacco products and about ceasing or suspending international cooperation in the nuclear sphere, rocket engine building and aircraft building between Russian companies and organizations under US jurisdiction,” one of the bill’s sponsors, MP Ivan Melnikov (Communist Party), was quoted as saying in the State Duma’s Twitter message.

“The bill charges the government and top officials in Russian regions with the task of developing mechanisms to replace US goods and services on the Russian market. We expect this to become a push for the development of the Russian economy,” Melnikov said.

Another provision included in the current version of the draft is the proposal to allow Russian companies to produce various goods copyrighted in the United States or in countries allied with the US without getting licenses from copyright holders. “This will be like a punch to the solar plexus for the Americans, because all achievements and all domination of the Anglo-Saxon, Western world are based on intellectual property and we are targeting this very right,” MP Mikhail Yemelyanov (Fair Russia) said in comments to Interfax. The particular list of patents that fall under the counter-sanctions will be formed by the government.

The bill, which follows the latest round of US sanctions on Russia, was drafted on Friday jointly by State Duma speaker Vyacheslav Volodin and the heads of all four parliamentary caucuses.

The lower house will have the first discussion on the bill and work out the schedule for passing it on Monday, said MP Aleksandr Zhukov (United Russia).

Deputy Duma speaker Pyotr Tolstoy (United Russia) said that the parliament could consider the bill on reciprocal measures in reply to the United States’ unfriendly actions towards Russia in May.

“At least, we are giving an adequate reply to the United States of America. We are stopping the cooperation with the USA in three very important spheres: the nuclear industry, the aircraft building industry and the rocket engine industry,” the head of the Fair Russia party, Sergey Mironov, said.

The head of the Liberal Democratic Party of Russia, Vladimir Zhirinovsky, added that the import restrictions on US goods and services would not be applied to purchases made by individuals, but rather on wholesale batches.

On April 6, The US Treasury Department released a list of 24 Russian citizens and 14 Russian corporations that fall under new sanctions imposed over Russia’s foreign policy. Earlier this week, Prime Minister Dmitry Medvedev said that Moscow will ban imports of US goods as part of a response to Washington’s latest move.

“These can be not only American securities… but also a whole range of other goods that are delivered to the Russian market or produced by American businesses on the territory of our country,” Medvedev said, answering questions from the Russian State Duma on Wednesday.

The prime minister stated that Moscow’s response to new sanctions should be adequate and measured. “Response measures should be well-calculated, should not harm ourselves, they must be adequate,” he said.

On Friday, Vladimir Putin’s press secretary, Dmitry Peskov, told reporters that Kremlin officials have not studied the State Duma proposal on reciprocal sanctions in detail, but said that “it is possible to assume with confidence that any measures that will be taken would not hurt Russia’s national interests.”

Russia’s Federation Council is looking to adopt counter-sanctions against the US, under which the country may ban exports of titanium components to aircraft giant Boeing, according to Russian Senator Sergey Ryabukhin.

“Among the rare earth metals that Russia supplies to the United States is titanium, which is necessary for the technological cycle of production of Boeing,” Ryabukhin told RIA Novosti.

Russia could also ban the supply of RD-180 engines used by NASA and the Pentagon, the senator added.

“These rocket engines are used not only by NASA, but also by the Pentagon on their satellites. It means the US uses these rocket engines to launch their military satellites,” he said.

Earlier on Friday, Russian deputies announced an upcoming response to the American sanctions imposed last week. According to State Duma Vice Speaker Ivan Melnikov, the Russian response would include ending cooperation with the US in the nuclear industry, aircraft building and airspace.

“Russia is able ‘to annoy’ the US by stopping or severely restricting cooperation in outer space, or by cutting supplies of components for Boeing aircraft, [and] close the supply of titanium,” said Petr Pushkarev, chief analyst of TeleTrade.

Under the proposed response by the Russian government, the US and its allies could also be banned from participating in Russian privatization deals. At the moment, the list of legal entities that can organize privatization transactions in Russia includes Goldman Sachs, JP Morgan, Credit Suisse, Morgan Stanley, BNP Paribas, UBS, Citi and several other foreign banks.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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