U.S. sanctions target Putin’s allies

The U.S. struck at the heart of President Vladimir Putin’s inner circle on Friday, imposing sanctions on seven of Russia’s most influential oligarchs and stoking a diplomatic crisis that some have dubbed a new Cold War.

Those hit include metals magnate Oleg Deripaska, described as operating for the Russian government, as well as Alexei Miller, director of state-owned energy giant Gazprom. Any assets they hold in areas under U.S. jurisdiction could now be frozen.

Also on the list are tycoon Suleiman Kerimov, under investigation in France over allegations he brought in millions of euros in suitcases full of cash, and Kirill Shamalov, a billionaire reported to be Mr. Putin’s son-in-law.

Russia’s state arms exporter, a key tool in Mr. Putin’s efforts to support the modernisation of his own military by selling advanced hardware around the world, was also added to the sanctions list.

In all, President Donald Trump’s administration targeted seven oligarchs, 12 companies they own or control, 17 senior Russian officials and a state-owned arms export company.

“The U.S. is taking these actions in response to the totality of the Russian government’s ongoing and increasingly brazen pattern of malign activity across the world,” one official said. “This included their occupation of Crimea, instigation of violence in eastern Ukraine, support for the Assad regime in Syria... and ongoing malicious cyber-activity.”

“But most importantly, this is a response to Russia’s continued attacks to subvert western democracies,” said the official.

Campaigners against Kremlin corruption welcomed the U.S. move. Bill Browder, a U.S.-born British financier whose lawyer Sergei Magnitsky died in a Russian jail after protesting alleged tax fraud, tweeted that Washington was “finally hitting Putin and his cronies where it counts”.

Election interference

Russia analyst Boris Zilberman, of Washington think tank Foundation for Defense of Democracies, said the sanctions might finally give Mr. Putin’s allies pause as “until there is a change in the Kremlin’s behaviour their bottom lines will suffer and their ability to enjoy the spoils of their corruption will be hampered.”

The measures were taken under a U.S. law passed to punish Russia for its alleged bid to interfere in the 2016 presidential election, engage in cyber-warfare and intervene in Ukraine and Syria.

But Friday’s announcement also came as Washington and its allies face a new diplomatic crisis with the Kremlin over the attempted poisoning of a former Russian double agent on British soil.

Mr. Trump begrudgingly signed the Countering America’s Adversaries Through Sanctions Act (CAATSA) in August last year, despite arguing that it undermined his own authority to lead U.S. foreign policy.

Cyber espionage

The President had long disputed the idea that Russia's alleged cyber-espionage and propaganda efforts sped him to victory in the election, seeking better relations with Mr. Putin.

But Congress persisted, backed by evidence from U.S. intelligence agencies, and in March the administration finally imposed sanctions on 19 Russian entities for “malicious cyber attacks.”

U.S. officials confirmed that their action against the oligarchs was in part related to Russia’s alleged interference in the U.S. vote, but stressed the broader nature of their concerns.

“The Russian government operates for the disproportionate benefit of oligarchs and government elites,” Treasury Secretary Steven Mnuchin said. “Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government's destabilising activities.”