The Treasury Department warned Congress that ramping up financial sanctions on Russia could restrain the country’s economy and force action against the United States, according to a memo reported by Bloomberg.
Treasury wrote that increasing restrictions on financial trades involving Russian debt would lead to “Russian retaliation against U.S interests.”
“Expanding [U.S. sanctions] to include dealings in new Russian sovereign debt and the full range of related derivatives would likely raise borrowing costs for Russia,” Treasury wrote, according to the memo.
The department warned that further sanctions on new debt would “put downward pressure on Russian economic growth; destabilize financial markets,” and “increase strain on Russia’s banking sector.”
Treasury also said that new sanctions could disadvantage U.S. investors against international counterparts because Russian debt is widely traded among other major international economies. The loss of business for U.S. investment firms could be mitigated by similar EU sanctions to even the market, Treasury wrote.
“The magnitude and scope of consequences from expanding sanctions to sovereign debt and derivatives is uncertain and the effects could be born by both the Russian Federation and U.S investors and businesses.”
The memo was sent to Congress with a list released Tuesday of suspected financiers of Russia’s political and military actions against U.S. interests. The list of roughly 200 Russian oligarchs and the memo were both mandated by an August law boosting financial sanctions on Russia.
The release of the memo and list without additional sanctions on Russia enraged Democrats who suspect subversive relationship between President TrumpDonald John TrumpSchiff: Nunes gave Trump ‘secretly altered’ version of memo Davis: ‘Deep state’ existed in ’16 – but it elected Trump Former Trump legal spokesman to testify to Mueller about undisclosed call: report MORE and the Russian government. It also raised concerns among Republicans who fear Russia’s increasing efforts to interfere with U.S. politics.
Treasury Secretary Steven MnuchinSteven Terner MnuchinFrederica Wilson: Trump won’t impose Russia sanctions because ‘they have something on him’ CBO: Debt-limit deadline likely in first half of March The Hill’s 12:30 Report MORE said Tuesday the Trump administration will impose financial sanctions on dozens of wealthy Russians despite the president declining a congressional deadline to do so.