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View Diary: Sanctions Against Russia Now Have Real Teeth (57 comments)

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  •  That makes no sense to me (0+ / 0-)

    What does Russia care if a deal is denominated in dollars instead of Euros?

    Unless you think Euros transferred in a series of transaction carries "the Russians touched this money" seal.

    The article you cite contradicts you:

    The sanctions that are causing the most confusion are those applied to the energy companies Rosneft and Novatek, and the financial companies Gazprombank ( which is the financial arm of the gas giant Gazprom – note NOT Gazprom itself) – and VEB (Vnesheconombank), the Russian state development bank. The confusion arises from the statement I have highlighted in the quotation above. Rather than prohibiting these companies from using US dollars, which has been the approach taken in other sanctions regimes such as those applied to Iran and Sudan, the US administration has banned “US persons” from providing them with long-term financing.

    This means that contrary to reports, “US persons” may not lend ANY currency to these companies for more than 90 days. The sanction is not limited to US dollars.

    So is  the "US person" ban the big issue? Or the "US dollars" ban?

    I personally don't see how the "US dollars" ban has any effect at all when deals can be done in Euros.

    The "US persons" ban could be effective in situations where a country does a lot of business with the United States. Russia is not one of those countries.

    Let me put it this way, how is Europe paying for Russian natural gas now? Surely not in dollars.

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