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Ivan Timofeev

PhD in Political Science, RIAC Director of Programs, RIAC Member, Head of "Contemporary State" program at Valdai Discussion Club

Under Secretary of the Treasury Sigal Mandelker made a number of interesting statements during her recent appearance before the House Appropriations Subcommittee on Financial Services and General Government. In Russia, media coverage singled out the establishment of new components within the Treasury’s Office of Terrorism and Financial Intelligence (TFI), since one of them will focus on Russia. The creation of a mechanism of this kind can hardly be regarded as a new step in the sanctions policy toward Moscow. Still, the overall attitude toward Russia is becoming increasingly tough and uncompromising, leaving little space for meaningful dialogue.

Under Secretary of the Treasury Sigal Mandelker made a number of interesting statements during her recent appearance before the House Appropriations Subcommittee on Financial Services and General Government. In Russia, media coverage singled out the establishment of new components within the Treasury’s Office of Terrorism and Financial Intelligence (TFI), since one of them will focus on Russia. The creation of a mechanism of this kind can hardly be regarded as a new step in the sanctions policy toward Moscow. Still, the overall attitude toward Russia is becoming increasingly tough and uncompromising, leaving little space for meaningful dialogue.

The announcement of new components within TFI was part of a detailed report on its performance. TFI is one of the core units within the Treasury Department with several offices within its structure: the Office of Foreign Assets Control (OFAC), the Office of Intelligence and Analysis (OIA), the Office of Terrorist Financing and Financial Crimes (TFFC), as well as the Treasury Executive Office of Asset Forfeiture (TEOAF) and the Financial Crimes Enforcement Network (FinCEN). In other words, TFI is in charge of sanctions policy, fighting financial crime, money laundering, financing of terrorism and international crime, as well as gathering intelligence on these matters.

In her remarks, Ms. Mandelker highlighted several new items in TFI’s structure that promise qualitative rather than quantitative changes. In other words, the new initiatives consisted of streamlining collaboration among horizontal structures rather than expanding the office by adding new units. The new institutional mechanisms that were announced included the establishment of seven Strategic Impact Units (SIUs). These units bring together experts from across TFI in charge of various policy areas. Seven priority areas were identified: North Korea, Russia, ISIS (banned in Russia), Iran, cryptocurrency, and human rights and corruption. What this means is that the SIU on Russia will include experts on sanctions, financial crime, intelligence units, etc. The creation of SIUs can be viewed as an attempt to better coordinate efforts by various units, which is a logical step for any major agency. At the same time, these SIUs could make it easier to carry out priority tasks without overstaffing the relevant services.

It is noteworthy however that the establishment of SUIs within TFI was accompanied by the creation of an even more serious management mechanism designed to streamline efforts both within TFI, as well as its interaction with other agencies. So far only one mechanism of this kind has been created, The Iran Finance Fusion Cell. It is hardly a surprise that Iran took center stage, since the Iranian dossier is one of the oldest and most substantial items on TFI’s agenda. That said, the experience acquired from this mechanism could well be used in other areas of operation in the future.

The establishment of the SUI on Russia was more likely than not a routine initiative that is indicative of a certain trend in US policy toward Russia. However, the narrative on Moscow seems to be changing. While Ukraine topped the agenda until recently, other topics are now coming to the fore, including alleged attempts to undermine Western democracies, cyberattacks against the US and its allies, support for Bashar al-Assad’s government in Syria, links to transnational crime, as well as human rights issues. Russia’s support for the Venezuelan government is also on the horizon, especially after Evrofinans Mosnarbank was designated on the SDN list for its links to Venezuela’s PDVSA.

A slew of initiatives put forward by Congress members also point in the same direction. No matter how eclectic and sporadic, they can still serve as building blocks for system-wide initiatives like the recent draft bill against Russia, titled Defending American Security from Kremlin Aggression Act (DASKAA), or supplement other undertakings, although some of these proposals simply mimic existing DASKAA provisions. Four new legislative initiatives are worth highlighting.

The first relates to countering Russia’s influence on Venezuela (H.R. 1477).This proposal deals with economic and military cooperation between Moscow and Caracas, and mentions visa restrictions for Russians involved in intergovernmental cooperation with Venezuela.

The second proposal is referred to as the KREMLIN Act (H.R. 1617). This draft bill directs US intelligence to submit assessments with respect to the current intentions of the political leadership of the Russian Federation on three matters, including potential military action against NATO members, potential responses to an enlarged United States or NATO military presence in Eastern Europe and potential areas where the Government of the Russian Federation could exploit weaknesses and divisions among the governments of its Western adversaries.

The third proposal is the Vladimir Putin Transparency Act (H.R 1404). In this draft, US intelligence is directed to gather information on the net worth and financial and other assets of Russian President Vladimir Putin, his family members and oligarchs close to him. Interestingly, this initiative is presented as a response to Russian “interference” in the US presidential election.

Finally, the fourth proposal is the Act to prohibit United States Government recognition of the Russian Federation’s claim of sovereignty over Crimea (H.R. 596); it prohibits recognition of Crimea as part of Russia.

There is nothing new about the ideas behind these draft bills. They were already present in one way or another in earlier documents and are sure to resurface in myriad future bills (having many draft bills is one of the distinctive features of the US legislative process). The overall attitude toward Russia that prevails in Congress is close to that of the US President, all other differences aside. For example, Trumps asks for $500 million in his 2020 budget to counter Russia in “Europe, Eurasia and Central Asia” (compared to $250 million allocated to this effect for 2018 and 2019 under PL 115-44, adopted in 2017). As of today, there are no factors on the horizon that could have any major impact on this trend.

However, these and other documents suggest a number of questions. For example, does the US intend to work with Russia to fight terrorism, while using the same bureaucratic mechanisms against it as against ISIS? How will the Russian parliament respond to the initiative to use national intelligence to ensure the transparency of Russian leadership? Will the US improve its security by making Russia an outcast? To answer these questions one needs to think outside the box, which is becoming a rare approach in today’s politics.

Author: Ivan Timofeev is Programme Director of the Valdai Discussion Club, Director of Programs at Russian International Affairs Council (RIAC).

First published in Valdai Discussion Club.


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  1. Korean Peninsula Crisis Has no Military Solution. How Can It Be Solved?
    Demilitarization of the region based on Russia-China "Dual Freeze" proposal  
     36 (35%)
    Restoring multilateral negotiation process without any preliminary conditions  
     27 (26%)
    While the situation benefits Kim Jong-un's and Trump's domestic agenda, there will be no solution  
     22 (21%)
    Armed conflict still cannot be avoided  
     12 (12%)
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     4 (4%)
    Toughening economic sanctions against North Korea  
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