"They stop the terror - the world cancels the status": Yermak-McFaul group on recognizing Russia as state sponsor of terrorism

The website of the Office of the President reports.

In the document, experts explained the essence and peculiarities of the status of "country sponsoring terrorism" provided for by American legislation.

Thus, the document provides factual data confirming the compliance of the actions of the Russian Federation with the definition of "terrorism". In practice, Russia's crimes in Ukraine are actually greater than "sponsoring terrorism", since the main perpetrator of these terrorist acts is the Russian Armed Forces, a key institution of the Russian state.

Experts describe in detail the main consequences: restrictions on transactions, loss of sovereign immunity, secondary sanctions, individual sanctions, symbolic influence.

"Such recognition will increase pressure to include Russia on the Financial Action Task Force's (FATF) blacklist. The recognition will also limit aid from the United States and organizations of which the United States is a member; all arms exports and sales will be prohibited; more "control over the export, re-export and transfer of dual-use goods will be strengthened; additional financial restrictions will be introduced," the statement says.

The agency notes that assigning such a status to Russia would facilitate and enable the US to impose secondary sanctions on third parties conducting transactions with the Russian state and private sector entities. By designating Russia as a state sponsor of terrorism, the United States and its allies can impose financial and trade sanctions on any country that continues to cooperate with Russia. Such a threat of secondary sanctions will increase the likelihood of compliance with existing sanctions, thus increasing their effectiveness.

The OP also noted that granting such a status would significantly increase the level of control by international counterparties over many Russian legal entities and individuals of the private sector. Potential business partners should be particularly diligent in their due diligence and Know Your Customer (KYC) procedures.

Complex diplomatic, legal and economic consequences for the US and other members of the sanctioning coalition in connection with the assignment of this status are indicated. However, the paper argues, the laws that allow such status in the United States provide sufficient flexibility to develop effective mitigation strategies for most of these problems.

The designation of Russia as a state sponsor of terrorism, as indicated in the document, will draw more global attention to the nature of the Russian regime and the atrocities and terror it has committed against innocent Ukrainian citizens. This will make it possible to increase the sanctions pressure, volume and effectiveness of measures to influence the Putin regime.

As for mitigating risks, the legislation primarily provides for the possibility of cooperation with Russian entities in joint humanitarian efforts.

It is noted that when assigning the status of a state sponsor of terrorism, an exception can be added, which would make it possible to maintain contact with Russian diplomats while promoting American national interests.  For example, even when Iran was recognized as a state sponsor of terrorism, direct negotiations were held with Iranian diplomats regarding the conclusion of the Joint Comprehensive Plan of Action (JCPOA).

"To reduce concerns that American plaintiffs in the United States could siphon off some Russian government assets currently held in American and other democratic world banks, the United States government could decide that those assets are exempt from potential lawsuits and used for the reconstruction of Ukraine," the message says.

In addition, there may be a condition that if the Russian Armed Forces leave the territory of Ukraine and thus stop terrorizing the Ukrainian population, the world will revoked the status. The U.S. House of Representatives and the Senate could rely on this provision to repeal the status in a joint resolution. If this is done in advance, Russia may have more incentives to end the war.

"Given the high price for testifying about terrorist acts and inaction in response, the Yermak-McFaul sanctions group believes that the benefits of assigning the Russian Federation the status of a state sponsor of terrorism outweigh the risks that can be mitigated," the OP emphasized.

• The Yermak-McFaul Sanctions Group is an international working group of independent experts on sanctions against Russia, which was created at the initiative of Volodymyr Zelenskyi.  It is chaired by the head of the Office of the President of Ukraine Andriy Yermak and the director of the Freeman-Spogli Institute of International Studies (FSI) Michael McFaul. The Yermak-McFaul working group is developing a list of documents, strategies and road maps that contain plans and recommendations for the implementation of sanctions against Russia and Belarus, as well as monitoring their effectiveness.