The Russian parliament's new sanctions bill against the US is significantly watered-down from the tough legislation initially introduced. Analysts say the Kremlin fears public backlash and scaring off foreign investors.
Russia's parliament, the State Duma, on Tuesday passed a controversial bill outlining the country's retaliatory measures in response to sanctions from the United States.
On April 6, the US annonunced new measures against seven Russian businessmen and 12 companies they control, as well as 17 government officials. Among those put on the blacklist were Viktor Vekselberg, who owns Russian conglomerate Renova Group, and aluminum tycoon Oleg Deripaska.
One week after the US announced its sanctions, Duma lawmakers drafted a retaliatory bill outlining punitive measures against Washington. They included import restrictions on alcohol and tobacco, agricultural products and raw materials. The document also suggested that Russia should ban the import of US medication, with exemptions for drugs that could not otherwise be produced in Russia or elsewhere.
The medication provision in particular sparked large public outcry, with many arguing that the available alternatives to US drugs would be inadequate or less effective.
Public and private pressure
Moscow-based political analyst Ekaterina Shulman believes that backlash may be one of the reasons why lawmakers decided to weaken the bill. "The work by NGOs, the public chamber, petitions, social networks — such a stable and high-profile public outcry scared the authors of the bill and showed them that citizens are irritated, which is absolutely unfortunate right after the presidential elections," she told Current Time, a US-government funded Russian-language broadcaster, adding that pressure from the business sector also played a role.
The current version of the bill, which has yet to be approved by the Federation Council, Russia's upper house of parliament, or signed by President Vladimir Putin, doesn't mention any specific industries, goods or services. The concrete measures outlined in the initial draft have been replaced by broader language.
According to the document, Russia will be able to ban or limit the import of products and raw materials from the companies registered in "unamicable countries" but, most importantly, the president will have the final say in approving those measures. Furthermore, essential goods without Russian-produced equivalents, as well as goods imported for personal use, will be exempt from the sanctions. US companies will be barred from participating in government contracts and the privatization of state-owned businesses.
Letting nationalists 'blow off steam'
Chris Weafer, a senior partner at Moscow-based consulting firm Macro-Advisory, called the possible steps outlined in the bill a "purely symbolic" gesture. "Russia could hurt a few US industries, which are reliant on it for materials or have big investments in the country, but the longer-term damage to Russia would be considerably greater, so the Kremlin would never allow any of that," he said via email.
Ultimately, explained Weafer, Putin does not want to take action that would damage the Russian economy. The country's GDP lags behind its targeted annual growth of 4 to 4.5 percent, with foreign investment needed to stimulate it.
By refusing to intervene when the tough retaliation measures were initially proposed, the Kremlin let the nationalists in parliament "blow off steam," Weafer said. "It was always clear that the final legislation would be a lot less severe and not cause any major problems for Western companies."
However, he added, even the softer measures approved by the Duma make little difference, since the final decision as to whether to take action or not ultimately lies with the president.
The final version of the document that was passed on Tuesday "doesn't bind anyone to anything," said Shulman, explaining that passing retaliation through parliament was critical, in order to show that the Duma plays a role in setting Russia's foreign policy. "This idea wasn't fully brought into life, but an effort had been made," she said.