Russian oligarchs are biting their nails in anticipation of a U.S. Treasury report outlining new sanctions to be enacted Monday on certain Russian business entities and friends of the Kremlin.
However, the Trump administration, which has been characterized as dragging its feet on punitive measures against Russia, is unlikely to enact the most stringent measures recommended in the legislation, analysts have told CNBC.
On Monday, several core provisions of the Countering America's Adversaries through Sanctions Act (CAATSA) come into effect. The bill will lay out 12 measures, out of which the Trump administration must enact at least five. The measures vary in intensity, from banning certain export licenses and corporate visas for sanctioned entities, to prohibiting all bank transfers involving "interests of sanctioned entities" under U.S. jurisdiction.
President Donald Trump is required by the broad mandate granted to him by Congress in July 2017 to act on this report, which will also detail information on Russia's state-owned enterprises; oligarchs and political officials close to Putin and their net worth; potential restrictions on Russian debt and equity sales to the U.S.; and sanctions relating to U.S. support for Ukraine following Russia's 2014 annexation of Crimea.
"The White House is seen as more likely to choose five of the 12 CAATSA measures that would have a relatively minimal impact, but it cannot be ruled out some of the more stringent ones will be imposed," Maximilian Hess, senior political risk analyst at AKE Group, told CNBC on Monday.
"I believe the primary issue will be in compliance, unless Trump chooses some of the more hardline measures," Hess said. "This is because the oligarchs report will effectively serve as a 'sanctions-list in waiting' and will make it more difficult for oligarchs and the businesses they control to access Western financial services."
Nervousness over which oligarchs will be listed in the Treasury report has prompted a rush by large Russian companies to issue debt, as Putin associates and business-owning billionaires fear being named will significantly impede their ability to raise funds in the West. International investors are meanwhile snapping up the high-yield Russian bonds before their access is potentially cut off.