U.S. hits Russian oligarchs, senior officials with new sanctions

The United States has imposed sanctions against Russian businessmen, companies and government officials, striking at associates of Russian President Vladimir Putin in one of Washington's most aggressive moves to punish Moscow for activities including alleged meddling in the 2016 U.S. election.

The action, taken Friday under pressure from the U.S. Congress,freezes the U.S. assets of "oligarchs" such as aluminum tycoonOleg Deripaska and lawmaker Suleiman Kerimov, whose familycontrols Russia's largest gold producer, Polyus.

Kirill Shamalov, a minority shareholder with petrochemicalcompany Sibur, was also sanctioned.Shamalov married Putin's youngest daughter Katerina inFebruary 2013, multiple sources who were at the wedding toldReuters.

After the marriage, he swiftly grew his wealth throughinvestments in Russia's biggest petrochemical company Sibur, which is not under sanctions.Unconfirmed media reports say Shamalov and Putin's daughter havesince split.

Other businessmen onthe sanctions list include Viktor Vekselberg, key owner ofRenova holding group, ranked by Forbes magazineas Russia's ninthrichest businessman with a net worth of $14.4 billion US. He isfamous for bringing back a collection of Faberge eggs to Russia.

The Treasury Department sanctions on seven Russian oligarchsand 12 companies they own or control, plus 17 senior Russiangovernment officials, are likely to complicate U.S. PresidentDonald Trump's hopes for good relations with Putin.

"The Russian government operates for the disproportionatebenefit of oligarchs and government elites," Treasury SecretarySteve Mnuchin said in a statement.

He said Moscow "engages in a range of malign activity aroundthe globe, including continuing to occupy Crimea and instigateviolence in Eastern Ukraine, supplying the Assad regime withmaterial and weaponry as they bomb their own civilians,attempting to subvert Western democracies, and malicious cyberactivities."

Russian lawmaker Konstantin Kosachev, chairman of theinternational affairs committee of Russia's upper house of
parliament, said the sanctions were baseless and unfriendly,Interfax news agency reported.

Economic impact

The sanctions could potentially hurt the Russian economy,especially the financial and energy sectors, and are part of Washington's effort to hold Russia to account for allegedlyinterfering in the election, which Moscow denies.

Shares in some Russian companies targeted by the sanctionsplummeted, but the broader market and ruble showed littlereaction to the new round of geopolitical tensions.

Shares in EN+ Group, which was put on the sanctions list andmanages Deripaska's aluminum and hydropower assets, were down19.7 per cent on the London stock exchange.

Rusal, a Russian aluminum giant also included on the list,fell 10 per cent on the Moscow Exchange. Deripaska stepped downas president of Rusal in February.

Reactions defiant

Gazprom CEO AlexeyMiller said Friday he is proud of the company's inclusion on the sanctions list, noting that it means the state-owned gas company is doing something right.

Andrey Kostin, CEO of Russia's VTBBank said he had tried to support good relations with U.S. banks, and the sanctions show a high level of misunderstanding by the U.S. administration.

Russian state companies under the U.S. sanctions willreceive additional government support, Interfax cited Russia's Industry and Trade Minister Denis Manturov as saying.

U.S. intelligence agencies say Russia used hacking andpropaganda in an effort eventually aimed at favouring Trump overDemocrat Hillary Clinton.

Special counsel Robert Mueller is investigating whetherTrump's campaign colluded with Russia in the 2016 election, something that Trump denies. Mueller has indicted 13 Russiansand three organizations in his probe.

Slow action on Russia

Trump has faced fierce criticism including from fellowRepublicans for doing too little to punish Russia for the
election meddling, aggression in Ukraine, and support ofPresident Bashar al-Assad in Syria's civil war.

He angered many members of Congress by failing for monthsto implement sanctions on Russia that lawmakers passed nearlyunanimously last year.

But pressure for Washington to take action against Russiahas been mounting in a series of disputes reminiscent of ColdWar tensions.

Putin's government was blamed for the poisoning of a formerRussian double agent living in close U.S. ally Britain last month, and the United States and several European statesannounced plans to expel more than 100 Russian diplomats inresponse.

In February, the White House blamed Russia for theinternational "NotPetya" cyberattack, which has been called the most destructive and costly in history.

On March 15, the Trump administration said it would imposesanctions on 19 people and five entities, including Russian intelligence services, for cyberattacks stretching back atleast two years.

More sanctions possible

Friday's sanctions were authorized by the CounteringAmerica's Adversaries Through Sanctions Act, known as CAATSA,which Trump reluctantly signed into law in August.

Under the law, the U.S. Treasury Department released apublic list of 210 people, including 96 wealthy Russian businessmen close to Putin's government and network, who couldbe subject to future sanctions.

The oligarchs were not immediately sanctioned then, but theexistence of the list and a more detailed classified annex created uncertainty over international business dealings withsome Russian sectors.

Chris Painter, the former top cyber diplomat at the U.S.State Department, said the latest sanctions are unlikely to deter the Kremlin unless Trump formally condemns Putin.

Painter, who left government last year, criticized Trump'srhetoric toward Putin including a congratulatory call last month when Putin won another presidential term in a widelycriticized election.

"We need the head of our country saying, 'This is not goingto happen,'" Painter said. "That's a critical piece."