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25 Jun, 2014 15:32

US business to run ads against Russian sanctions

Two top US business lobbies plan to run newspaper adverts warning that more Russian sanctions risk harming US workers and businesses. The trade associations warn that economic sanctions will translate into huge damages from lost trade with Russia.

The adverts will be published in the New York Times, Wall Street Journal and Washington Post by the US Chamber of Commerce and National Association of Manufacturers on June 26, Bloomberg cites a person familiar with the plans, who asked not to be identified.

US trade associations fear even temporary sanctions would inflict long-lasting damage on exports to Russia. Besides spoiling relations with Russia sanctions will force a reassessment of the political risk associated with exports and raise the cost of future financing.

Even a limited group of large Russian banks impacted by the sanctions would slow the national economy and make US imports more expensive as the ruble declines.

According to industry executives US energy companies would be required to apply for licenses for exporting technology to Russia if sanctions were agreed. Moreover, those companies exporting products with more than 10 percent of US technology content won’t be granted licenses at all.

If restrictions on technology transfer applied, exports to Russia will become more complicated. That will lead to additional expenses for US companies, especially in the energy sector which is full of high technology.

The only effect of imposing additional sanctions will be “to bar US companies from foreign markets and cede business opportunities to firms from other countries,” Bloomberg cites a copy provided by the person familiar with the plans.

President and CEO Jay Timmons of the National Association of Manufacturers (NAM), (Alex Wong / Getty Images / AFP)

The White House’s intentions face opposition from both US business and European countries who say that Washington’s unilateral action will deal nothing than a competitive disadvantage to the national economy.

The Yamal LNG gas project between France's Total and Russia's Novatek is highly dependent on US technology and will experience serious difficulties if sanctions are imposed, says Yves-Louis Darricarrère the President of the Exploration & Production Division at Total.

Yes, we need US technologies. Oil industry involves the use of the technologies of different countries around the globe. That’s why we need cooperation instead of a conflict,” Vedomosti quotes Darricarrère as saying.

German Chancellor Angela Merkel told members of her party on Tuesday that further sanctions against Russia could be back on the agenda at the Brussels summit on Friday, if Russia doesn’t take measures to de-escalate crisis in Ukraine.

Merkel praised Russian President Vladimir Putin for asking the Russian upper house of parliament to cancel his right to deploy troops abroad, describing it as a “a first step” in de-escalating the crisis.

However the Chancellor stressed that “substantial progress” with which they can go into sustained negotiations is needed.

We help, wherever we can. But when nothing helps, then sanctions can come back on to the agenda,” she added.