After the “Kremlin report” – debt obligations: what to expect from US

Washington revealed details of the so-called “the Kremlin list” — new U.S. list of Russians, against whom can be applied the personal economic and political sanctions. This document is not to be considered as a specific tool to damage life caught in it, officials and businessmen — who get arrested account, others will lose business with Western partners. However, the US is not going to rest on our laurels and are preparing another surprise — the state Department trump is going to hit where it hurts and to prohibit the circulation of debt obligations of our country. This measure is able to discard the Russian stock market decades ago.


photo: AP

Steven Mnuchin, head of the U.S. Treasury, part of “the Kremlin report.”

For Russia, the most piquant news was the inclusion of “the Kremlin list” Prime Minister Dmitry Medvedev and all members of the government as a whole. Previously under the restrictions, only private entrepreneurs, deputies, senators, permanent representatives and representatives of the state of business, whereas specific managers — members of the Cabinet — there almost was not.

While the presence of high-ranking officials in the list to get the sanctions do not carry anything scary. Judging by the statements of officials, most of them do not have a property abroad on which you can seize. Another thing — their image. Ordinary citizens can slip in the question: why this figure caught in the sanctions list of persons and possibly it really is property or other assets abroad? Dependent on the West to Russian politicians, the voter does not like and will be sure to be interested in the sources of income and property abroad.

The most important point is the presence in the list of big businessmen and top managers of state corporations. They are much more vulnerable in the sense of potential sanctions. Entrepreneurs can arrest accounts in foreign banks and freeze the assets abroad. Based on this list of American and international agencies that deal with the control of financial transactions, may restrict business operations in the territories, where there is U.S. jurisdiction, and, of course, to deny entry into the United States.

Difficulties included in the list of entrepreneurs may arise, even if they will use the services of affiliates, the names and activities of which will be transparent to the initiators of the sanctions. In other words, the inclusion of Directors of public and private corporations in the sanctions of the Protocol can harm the entire business. Foreign partners, fearing that the US sanctions will apply to them, unable to abandon long-established trade relations, including imports. And potential business partners, especially from the US and Europe, most likely, will not risk to cooperate with the defendants in the “Kremlin report”, even if formal restrictions will not. Without foreign technology support, the business of domestic companies at risk if not collapse, then be seriously affected.

As suggested by the former Advisor of the President of Russia, and now lectures in the US and criticizing the policy of the Kremlin, Andrei Illarionov, Moscow is seriously concerned about the emergence of a new list of the USA. Allegedly, even in Washington long before the publication of the report was sent to the scouts, the purpose of which is to avoid or discredit the experts involved in the development of its criteria.

Much more unpleasant if you are correct rumours in the global stock market since the end of last year. In accordance with U. S. lawmakers may soon pass a law which will stipulate the prohibition of American investors to buy bonds of Federal loan of Russia, as well as securities of Russian public companies. Given that foreigners owned more than a third of Russian Federal loan bonds, the waiver of non-residents from transactions with these securities would represent a significant blow to their profitability, and as a consequence, a decline in interest for this debt instrument from the investors. If foreign exchange players will get rid of stock of state corporations, the quotations, as well as the capitalization of the companies, will lose weight that will negatively affect the investment attractiveness of their projects.

Maybe for most of our compatriots, the securities market is something ephemeral, but the fall of stock exchange quotations of shares of Russian companies can lead to very poor outcomes and discard of domestic stock markets for two decades, the cost of “Gazprom” — one of the largest domestic suppliers of foreign exchange earnings — will drop to prices of garage cooperative in new York.

official channels

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