{
  "id": "R43895",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R43895",
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  "versions": [
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      "source": "EveryCRSReport.com",
      "id": 586821,
      "date": "2017-02-17",
      "retrieved": "2020-01-02T14:49:15.654455",
      "title": "U.S. Sanctions and Russia\u2019s Economy",
      "summary": "In response to Russia\u2019s annexation of the Crimean region of neighboring Ukraine and its support of separatist militants in Ukraine\u2019s east, the United States imposed a number of targeted economic sanctions on Russian individuals, entities, and sectors. The United States coordinated its sanctions with other countries, particularly the European Union (EU). Russia retaliated against sanctions by banning imports of certain agricultural products from countries imposing sanctions, including the United States.\nU.S. policymakers are debating the use of economic sanctions in U.S. foreign policy toward Russia, including whether sanctions should be kept in place or further tightened. A key question in this debate is the impact of the Ukraine-related sanctions on Russia\u2019s economy and U.S. economic interests in Russia. \nEconomic Conditions in Russia\nRussia faced a number of economic challenges in 2014 and 2015, including capital flight, rapid depreciation of the ruble, exclusion from international capital markets, inflation, and domestic budgetary pressures. Growth slowed to 0.7% in 2014 before contracting sharply by 3.7% in 2015. The extent to which U.S. and EU sanctions drove the downturn is difficult to disentangle from the impact of a dramatic drop in the price of oil, a major source of export revenue for the Russian government, or economic policy decisions by the Russian government. \nThe International Monetary Fund (IMF) estimated in 2015 that U.S. and EU sanctions in response to the conflict in Ukraine and Russia's countervailing ban on agricultural imports reduced Russian output over the short term by as much as 1.5%. Russia's economy, more recently, is showing some signs of recovery, in part due to higher oil prices, a flexible exchange rate regime, and sizeable foreign exchange reserves, among other factors. The IMF projects Russia\u2019s economy will grow by 1.1% in 2017.\nU.S. Economic Interests\nWhen the sanctions were announced in 2014, U.S. business groups raised concerns that sanctions harm American manufacturers, jeopardize American jobs, and cede business opportunities to firms from other countries. When the sanctions were rolled out in 2014, news reports cited a number of U.S. firms that were adversely affected by U.S. sanctions on Russia and Russia\u2019s retaliatory measures. There are questions about the overall impact of the sanctions on the U.S. economy, however. Russia accounts for a small portion of total U.S. trade and foreign investment. U.S. sanctions also target specific Russian individuals and entities and, in some cases, restrict only specific types of economic transactions.",
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      "typeId": "REPORTS",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4786,
          "name": "Europe, Russia, & Eurasia"
        },
        {
          "source": "IBCList",
          "id": 4923,
          "name": "International Financial Markets"
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      ]
    },
    {
      "source": "EveryCRSReport.com",
      "id": 438007,
      "date": "2015-02-04",
      "retrieved": "2016-04-06T19:32:33.619131",
      "title": "U.S. Sanctions on Russia: Economic Implications",
      "summary": "In response to Russia\u2019s annexation of the Crimean region of Ukraine and ongoing military intervention in eastern Ukraine, the United States has imposed a number of economic sanctions on Russian individuals, entities, and sectors. The United States coordinated its sanctions with other countries, particularly the European Union (EU). Russia has retaliated against sanctions by banning imports of certain agricultural products from countries imposing sanctions, including the United States, for one year.\nMany Members of Congress have been strong proponents of economic sanctions on Russia. In December 2014, Congress unanimously passed the Ukraine Freedom Support Act of 2014 (P.L. 113-272), which authorizes the President to impose sanctions on specific Russian individuals and entities. The President signed the bill but also stated that he would not impose additional sanctions on Russia at this time. As the conflict in Ukraine continues, some Members of Congress are calling for tighter economic sanctions on Russia, in addition to other measures.\nAnalysts have debated the potential effects of current U.S. sanctions on Russia and Russia\u2019s retaliatory measures. Russia is a major player in the international economy; it has the world's ninth-largest economy and it is a major producer and exporter of natural gas and oil. However, there is relatively little overall trade and investment between the United States and Russia, although ties at the firm-level are significant in some instances. \nEconomic conditions in Russia have deteriorated at a faster rate in recent months. Capital flight from Russia has accelerated, the ruble has depreciated by more than 50%, inflation has increased, and the Russian economy is projected to contract by 3.0% in 2015. It is difficult to assess whether, and if so how much, targeted U.S. sanctions on Russian individuals and entities have contributed to worsening economic conditions in Russia, since other factors are likely contributing to Russia\u2019s economic challenges. In particular, oil prices have fallen by 50% in the past six months, and oil is a major Russian export and source of revenue for the government. However, many analysts, including senior officials at the International Monetary Fund, have argued that sanctions are at least one factor contributing to the increasingly difficult economic situation in Russia. \nU.S. business groups have raised concerns that sanctions will harm American manufacturers, jeopardize American jobs, and cede business opportunities to firms from other countries. However, there are questions about the extent to which the sanctions and retaliatory measures will affect U.S. economic interests. Russia is a relatively minor trading and investment partner for the United States overall. U.S. sanctions target a specific subset of Russian individuals and entities and, in some cases, restrict only specific types of economic transactions. \nThe full economic impact on U.S. firms and the U.S. economy remains to be seen. To date, news reports have cited a number of U.S. firms have been adversely affected by U.S. sanctions on Russia and Russia\u2019s retaliatory measures. Russia is taking steps to develop alternative economic partners, particularly in emerging markets. Some analysts argue that the impact on U.S. firms should not be overstated; some firms were able to prepare for the disruptions, and the impact could be minimized as alternative markets are located. More broadly, U.S. exports to Russia have remained relatively robust but a weaker ruble and a contraction of the Russian economy may provide additional challenges to U.S. exports to Russia.",
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      "typeId": "REPORTS",
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      "topics": [
        {
          "source": "IBCList",
          "id": 283,
          "name": "Russia and the Caucasus"
        }
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    }
  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs",
    "Industry and Trade"
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}