The new text of the bill to toughen U.S. sanctions against Russia include at least five substantive changes that make it not as hard as assumed the original version. The initial bill was approved by the Senate in mid-June (RBC analyzed it here), introduced in the house of representatives on July 12, the version were identical. During this time amendments to the bill lobbied the White house and the American oil and gas company. And this campaign has yielded results.
Sovcomflot can sleep peacefully
The original version of the bill proposed to modify the sanctions regime associated with the actions of Russia in Ukraine, to provide the Treasury Secretary the ability to impose sanctions on Russian state companies operating in the “railway, shipping or metals and mining sectors”. In the new version of “shipping” (shipping) is gone. This in particular means that there is no more threat to the state of the operator of the tanker fleet Sovcomflot. The company specializiruetsya the Maritime transport of oil and petroleum products, serving oil and gas projects on the shelf.
Authorities have long wanted to privatize part of the “Sovcomflot”, but constantly delaying the deal: in mid-June, Reuters reported that the government once again postponed the deal due to “adverse market conditions”.
The loan terms for “Gazprom Neft” and “Rosneft”
In the original version of the bill it was proposed to tighten sanctions against the Russian oil and gas companies: American companies can lend “Rosneft”, “Gazprom Neft”, “NOVATEK” and “Transneft” for up to 90 days, and Congress was going to cut this period to 30 days. In the end, a compromise of 60 days.
We are talking not only about loans in the narrow sense, but also about the conditions of payment for goods or services purchased by Russian companies from American suppliers: for example, if a Russian oil company called sectoral sanctions, buys goods from us, the payment must be made within 90 days (60 days under the bill) — otherwise, the U.S. company would violate sanctions.
Only “new” oil projects
The congressmen propose to modify restrictions on the transfer of American technology for the exploration and production of Russian oil in deep water, Arctic offshore and shale formations. Now American companies are forbidden to supply goods, services or technology to such projects if they are “Gazprom Neft”, “Gazprom”, “Surgutneftegas”, “Rosneft” or LUKOIL. Now, under the ban hit and the projects in which one of the following five Russian companies has “substantial non-controlling interests” — 33%.
While this potentially expands the list of Russian oil projects which will participate to the Americans, the previous version of the bill suggested a much broader ban on participation in deep-water, Arctic and shale projects, where there is any Russian energy company.
Even more important amendment — the ban on export of American goods and technology would only apply to “new” oil projects in deep water, Arctic offshore and shale formations. In other words, existing at the time the law came into force, the projects will not be subject to restrictions.
Trump the right to defer sanctions
Although Congress left in the bill all those provisions which most irritated the White house (U.S. President to suspend or lift sanctions severely restricted) , one assignment is still there. She refers to that portion of the sanctions that legislators need to impose on natural and legal persons (including foreign) engaged in “significant transactions” with the Main Directorate of the General staff of the Russian Armed forces (former GRU), the Federal security service and other state bodies responsible for the exploration or defense. Although such persons cooperating with the Russian special services and are subject to sanctions, should determine the President, he will have the right to defer the imposition of sanctions, if at least once in six months will certify the Congress that the person “reduces the number of significant transactions” with Russian authorities.
The house of representatives needs to consider the bill on Tuesday, July 25. President Donald trump is unlikely to veto it, given the “current political atmosphere”, despite the fact that the bill significantly limits its powers to conduct foreign policy, told the New York Times two high-ranking official in the US administration. In addition, the bill includes sanctions against Iran and North Korea, and from them the White house will be hard to refuse, the publication adds.