Why Companies Complying With US Sanctions in Russia Could Be Sanctioned Too

Russian lawmakers have approved a law restricting American imports in retaliation for new U.S. sanctions on the country. An additional measure still under consideration could put any executive working in Russia who complies with U.S. sanctions in jail for up to four years if it gets final approval from the Duma, the Russian parliament.

Washington imposed new sanctions last month, in response to evidence that Moscow had interfered in the 2016 presidential elections, targeting some of Russia’s richest men and senior government officials close to President Vladimir Putin.

There are already some restrictions on imports of some U.S. and Western goods. But both sides are now ratcheting up the pressure.

If the Duma approves the second bill, anyone based in Russia who refuses to do business with a Russian citizen or sanctioned company could be jailed for up to four years, or be fined up to 600,000 rubles (around $9,700).

Russian citizens convicted of helping foreign governments implement sanctions would face up to three years in jail or fines of up to 500,000 rubles ($8,000).

For many foreign enterprises with operations in Russia, it means they will have to choose between breaking the local laws, or their own.

In effect, this is an ongoing information battle, as the Kremlin makes sure it is seen to be standing up to the United States, which also helps to embed its narrative of events.

“The U.S. sanctions are of an absolutely unfriendly type,” said State Duma speaker Vyacheslav Volodin. “They affected over 400 Russian companies and about 200 citizens of our country. We are granting broad powers to our president and government to protect our country, our economy and workplaces.”