Russia has never turned its back on US business despite 'confusion' over sanctions, commerce chief says

  • Russia has never pushed U.S. businesses away despite the "confusion" and "emotion" surrounding sanctions, the chief executive of the American Chambers of Commerce in Russia, told CNBC on Thursday.
  • Tensions between the U.S. and Russia have increased in recent weeks with the U.S. piling more sanctions on Russia for its alleged meddling in the U.S. election in 2016.
  • The latest sanction list issued in April included Russian oligarchs, government officials and entities that it said were allied with President Vladimir Putin.

Russia has never pushed U.S. businesses away despite the "confusion" and "emotion" surrounding recent sanctions, the chief executive of the American Chambers of Commerce in Russia, told CNBC Thursday.

"Businesses have continued to operate in Russia and continue to do so successfully, the Russian government has never really turned its back on U.S. business, it has been making a consistent and credible message of, 'You're welcome here, operate here, please stay and we like you and we appreciate the business you do here,'" Alexis Rodzianko told CNBC on Thursday at the St. Petersburg International Economic Forum (SPIEF).

Tensions between the U.S. and Russia have increased in recent weeks with the U.S. piling more sanctions on Russia for its alleged meddling in the U.S. election in 2016; the latest sanction list issued in April included Russian oligarchs, government officials and entities that it said were allied with President Vladimir Putin and engaged in "malign activity" around the world.

Notable inclusions on the list are aluminum giant Rusal and its outgoing president Oleg Deripaska, as well as VTB Bank President Andrei Kostin, who was listed as a government official (VTB Bank is majority owned by the Russian state).

Rodzianko said the list was confusing. "I would argue that these oligarchs are not particularly close to Putin, these are holdovers from the (former President Boris) Yeltsin era and they're more tolerated than considered close. So that was a confusing factor and if confusion was the objective then, hey, there's lots of confusion. Uncertainty that anybody could be next is in the air," he said.

The golden domes of the Kremlin's churches and cathedrals sit illuminated at dusk in Moscow, Russia, on Monday, April 9, 2018.
Andrey Rudakov | Bloomberg | Getty Images
The golden domes of the Kremlin's churches and cathedrals sit illuminated at dusk in Moscow, Russia, on Monday, April 9, 2018.

Russia is already under sanctions related to its annexation of Crimea in 2014 and perceived role in a pro-Russian uprising in east Ukraine in the same year.

The sanctions target any individuals or entities deemed to have been complicit in undermining democratic processes in Ukraine and hit specific sectors, including the arms and energy sectors and financial institutions. The restrictions also prohibit imports and exports of goods to — as well as investment in — Crimea by any U.S. person or entity.

Reacting to the latest sanctions, Rodzianko said that there was no clear rationale for the sanctions.

"Emotion has really taken over, unfortunately," he said. "But it works on both sides. We've had the U.S. Congress acting up and all this rhetoric about election interference and then you've got the Russian Duma (Parliament) introducing criminal liability for complying with sanctions that would essentially be a 'scorched-earth' policy for investment in Russia," he said.

The Duma has not yet passed a law that would make it illegal to comply with Western sanctions on Russian soil but if it did, Rodzianko said it would drive away business.

"We hope it doesn't pass but if it does, they'll be doing a much more effective job at sanctioning themselves than the West could ever do," he warned.