PROPOSED ECONOMIC SANCTIONS BILL LIKELY TO PASS

UNCLAS SECTION 01 OF 02 MOSCOW 012232

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL ECON RS
SUBJECT: PROPOSED ECONOMIC SANCTIONS BILL LIKELY TO PASS
DUMA

Summary
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1. (U) On October 27, United Russia Duma Deputies submitted a
bill that would empower the Russian President to impose
economic sanctions against any country, legal entity, or
person in the event of an "emergency situation." The bill is
still in its early stages. While there are differing views
about its ultimate prospects, with some suggesting it will
not be speedily adopted, an initial push from President Putin
and backing from the pro-Kremlin United Russia suggest it
could quickly become law. Although purportedly based on the
U.S. International Emergency Economic Powers Act, the bill
lacks any provision for a legislative check on the
President's ability to impose or lift sanctions. Some
observers argue the bill would be redundant, as the
appropriate legislative tools for regulating relations with
Georgia and other CIS states already exist. End summary.

Background on Process, Prospects
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2. (U) On October 27, United Russia Duma Deputies Vladimir
Pligin and Vladislav Reznik submitted a bill to the Duma that
would empower the President to impose economic sanctions
against any country, legal entity, or person in the event of
an "emergency situation." We understand that the bill has
not yet left the "assigning" committee.


3. (U) Once introduced by a deputy or deputies, a Duma bill
goes to the assigning committee and, once vetted, to the Duma
Council, which vets it again, then decides if it should be
introduced at the Duma. At either of these stages, the bill
can be returned to the author(s) for re-drafting. The
purpose of vetting is to determine if it complies with
constitutional law and which committee(s) will shepherd it
through the legislative process.


4. (U) After it has been assigned to a committee, a bill must
pass three readings in the Duma. The first reading is
essentially an introduction. According to Galina Bodrenkova,
an expert working on the Civil Affairs and Religious
Associations Committee, the real drafting work occurs between
the first and second readings of a bill, when interested
parties contribute their input for the drafting committee's
consideration. If a bill passes the second reading, the
third reading is generally pro forma, as is the approval by
the Federation Council and the President. Laws come into
effect upon publication in the state newspaper Rossiskaya
Gazeta.


5. (U) According to media reports, the genesis of the
sanctions bill was a meeting on Georgia that President Putin
had with Duma faction leaders. Observers predict a first
reading in November, although the bill is not yet on the
publicly-accessible Duma calendar.


6. (SBU) Aleksandr Moskalets, first deputy on the
Constitutional Affairs Committee, told us, however, that he
did not expect swift passage. Contrary to the 1990s, when
crucial legislation was passed in days, today's Duma prefers
to examine potential legislation more carefully. Indeed,
Moskalets thought the bill might not pass. He detected in the
Duma a significant minority opposed to the bill, in part
because many believe that the Ministry of Emergency Affairs
already has legislation at its disposal for such purposes.
Political analyst Dmitriy Oreshkin agreed that concerns about
Russia's image might dampen enthusiasm for the legislation.
Neither Moskalets, nor Oreshkin had seen a complete text of
the bill.

The Draft
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7. (U) The draft bill defines an "international emergency
situation" as a "combination of factors, which present a
threat to the health, to human and civil rights, as well as
the security of the state." The bill permits sanctions to be
imposed for four years, with extension for an additional two
years possible if "the situation continues to be dangerous to
the health, rights, and lawful interests of Russian citizens,
or the security of the state."


8. (U) The bill would empower the President to suspend
economic, military, or technical assistance programs; ban or
limit financial transactions; ban or limit external economic
operations; suspend trade or other international contracts;
change import/export duties; sever or limit sea and air
transportation links; restrict tourism; and/or, limit
technical and scientific exchanges.

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9. (U) The proposal to impose such sanctions may be made by
the President, the Federation Council, the Duma, or the
Government. The ultimate decision to impose them, however,
is the President's. The same four entities may propose that
sanctions be suspended but that decision, again, rests with
the President.

Like the U.S. Law?
--------------


10. (U) The Russian press has made much of the fact that the
U.S. International Emergency Economic Powers Act (IEEPA) was
purportedly used as a model for this draft bill. There are a
few key differences, however. In the IEEPA, the President
must report regularly to Congress, which has the power to
override via concurrent resolution any sanctions imposed by
the President.

Comment
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11. (SBU) Given that the Duma is controlled by the
Kremlin-compliant United Russia, we believe this bill --
Moskalets's caveats notwithstanding -- has a good chance of
becoming law. References to U.S. sanctions law appear to be
an effort to give the bill the appropriate pedigree. If
passed, the bill would retroactively legalize measures that
Russia has already imposed on a number of CIS countries
(Georgia, Moldova, Belarus, and Ukraine).
BURNS