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<http://wsj.com>
Biden's Promised 'Devastating' Response to Navalny Death Is Largely
Symbolic
Ian Talley and Vivian Salama

The Biden administration, under pressure to deliver on a 2021 promise of "devastating" consequences if top Kremlin critic Alexei Navalny should die
in Russian custody, released a raft of sanctions on Friday to punish
Moscow that U.S. officials privately concede are likely to land a limited
blow.

The latest move, which is also intended to mark the second anniversary of Russia's invasion of Ukraine on Feb. 24, adds nearly 600 targets to U.S. sanction rosters, targeting major financial institutions, government
officials, business executives, shipping companies and manufacturers.

"If Russia is going to turn its industries into wartime producers, then
all Russia's production is now fair game," said Wally Adeyemo, deputy
secretary of the Treasury.

The Biden administration argues that such measures will over time strangle
the Russian economy and defense industry, and hamper its ability to wage
war on Ukraine, while naming and isolating officials complicit in
human-rights abuses. A number of officials linked to the prison where
Navalny died are also targeted, U.S. officials said.

"This is another turn of the crank, another turn of the wheel," national security adviser Jake Sullivan told reporters this week.

Yet this latest move against the Kremlin also demonstrates the limited
options the Biden administration has to respond to the regime's escalating aggression, which has also included the recent detention of a
Russian-American citizen. Unable for months to get a bill that provides supplemental aid for Ukraine through Congress, fearful of the economic consequences a full oil embargo against Russia would unleash in an
election year, and unwilling to risk the potential tit-for-tat likely to
result from seizing Russian assets, the White House is left with imposing
yet more narrowly targeted sanctions.

Some administration officials have privately played down the potential
impact of the new measures, and indicated the package on the whole focuses mostly on eroding Moscow's ability to sidestep existing sanctions and fund
its war. Analysts also express doubt that the latest round will have much impact. Critics of the U.S. sanctions policy say it is another utilitarian
step that only creates an illusion of decisive U.S. actions as Ukraine's defenses are crumbling against Moscow's invasion.

"On the one hand, this next turn of the crank is inevitable because the
U.S. needs to take concrete steps to respond to Navalny's death," said
Charles Kupchan, a senior fellow at the Council on Foreign Relations. "On
the other hand, it's quite clear at this stage that the sanctions package against Russia has fallen far short of expectations."

Kupchan said that he expected the latest round of sanctions to prove "more symbolic than it is impactful."

When the Biden administration unveiled unprecedented sanctions in 2022 in response to Russia's invasion of Ukraine, officials predicted a
devastating effect on Russia's economy. In fact, the most dramatic effects
were short-lived.

Russia's economy initially contracted as exports plummeted and the country struggled to get the financing, goods and services it needed to run. By
the end of last year, the Russian economy was expanding again, albeit
slowly, and Russia signaled it was prepared for a long war of attrition in Ukraine.

The U.S. has levied several rounds of sanctions on Russia related to
Navalny since accusing the Kremlin of trying to assassinate him by
poisoning in 2020. In June 2021, after meeting with Russian President
Vladimir Putin at a summit in Geneva, President Biden was asked what would happen if Navalny, who had returned to Russia after recovering in Germany
and was jailed, should die in Russian custody. "I made it clear to him
that the consequences of that will be devastating for Russia," Biden said.
But officials say the U.S. has been hobbled in its financial war against
Russia in large part by its quest to avoid damage to Western economies.
Fearing a rise in energy prices, the U.S. and its allies have avoided an all-out embargo on Russian oil exports, allowing the Kremlin continued
access to its chief revenue source.

"We are giving huge sanctions relief to Russia's war machine," Rep. Andy
Barr (R., Ky.) told senior Treasury officials before the House Financial Services Committee last week, referring to the continued oil sales. "Why
is the Biden administration green lighting billions of dollars that fund Moscow's war in Ukraine even as you ask Congress to provide supplemental
budget funding for Ukraine," asked Barr, who is also a member of the House Foreign Affairs Committee.

Administration officials say the price cap is working. Russian energy
revenues are, in fact, down from prewar levels, but total government
revenues last year hit a record high as non-oil revenues rose, according
to Russian Ministry of Finance data.

Meanwhile, Russian companies have found workarounds for sanctioned goods
and services, channeling imports through China, Turkey, the United Arab Emirates and Central Asia, say current and former U.S. and European
officials.

Sanctions targeting individuals have punished officials with lives or
property outside Russia, but inside the country, being sanctioned has been touted as a sign of loyalty to Putin's regime, which has shown few signs
of fragility.

While the administration targeted on Friday some of those the U.S.
believes are responsible for Navalny's death, most of the entities added
to the sanction rosters have been vetted for months, former Treasury
officials said.

Much of the administration's focus now in its financial war is filling
holes in the sanctions dragnet-exposing networks of companies helping
Russia evade prohibited trade and finance, and arm-twisting foreign
governments to disrupt those operations within their borders.

"We all need to acknowledge that two years in the sanctions regime has
been more porous than we had hoped," Sen. Mark Warner (D., Va.) said. "I
hope it will mean an increase in sanctions, I hope it will potentially put
more pressure on the Chinese who continue to supply the Russians."

Some proponents of tougher sanctions are also calling for the U.S. to
seize frozen Russian assets. Warner said that asset seizures involve a
"tricky legal road," but he is hopeful that it might work out since it is
far more likely to sting Moscow. Treasury has said such seizures aren't
planned given allied differences on the matter.

Moscow has threatened to retaliate with seizures of its own, should the
U.S. pursue this option.

While the administration has managed to build a coalition of allies to
support Ukraine and pressure Russia through sanctions, Ukraine's losses on
the battlefield and political divisions in the U.S. over war funding have lately overshadowed success.

The most effective method for punishing Russia today would be a raft of military aid to Ukraine, said Kupchan of the Council on Foreign Relations.
"But obviously that is a step that requires congressional approval," he
said. "Sanctions are easy in the sense that they are the product of an executive order."

Alan Cullison contributed to this article.

Write to Ian Talley at Ian.Talley@wsj.com and Vivian Salama at vivian.salama@wsj.com





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Anyone that isn't confused doesn't really
understand the situation.
~Edward R. Murrow USA WWII Correspondent ==================================================

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