Obama's New Russia Sanctions Again Bypass Arms Giant with Pentagon Contracts

President Obama today announced additional sanctions on the energy, arms and finance sectors of the Russian economy — yet again excluding state-owned arms giant Rosoboronexport, which has raked in more than $1 billion in no-bid Pentagon contracts since 2011.


“We’re blocking the exports of specific goods and technologies to the Russian energy sector. We’re expanding our sanctions to more Russian banks and defense companies. And we’re formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia,” Obama said in afternoon remarks.

“At the same time, the European Union is joining us in imposing major sanctionns on Russia, its most significant and wide-ranging sanctions to date.”

The president claimed “the sanctions that we’ve already imposed have made a weak Russian economy even weaker.”

“Foreign investors already are increasingly staying away. Even before our actions today, nearly $100 billion in capital was expected to flee Russia. Russia’s energy, financial and defense sectors are feeling the pain. Projections for Russian economic growth are down to near zero,” Obama continued. “The major sanctions we’re announcing today will continue to ratchet up the pressure on Russia, including the cronies and companies that are supporting Russia’s illegal actions in Ukraine.”

“In other words, today Russia is once again isolating itself from the international community, setting back decades of genuine progress. And it doesn’t have to come to this. It didn’t have to come to this. It does not have to be this way. This is a choice that Russia, and President Putin in particular, has made.”


The Pentagon is expecting the last of the 88 Mi-17 helicopters purchased from Russia for Afghanistan’s air force to be delivered by this fall, a purchase made on the assessment that the Afghans would be better able to operate and maintain the Russian technology.

Today a bipartisan group of lawmakers — Reps. Jim Moran (D-Va.), Rosa De Lauro (D-Conn.), and Adam Kinzinger (R-Ill.) — introduced legislation to reimpose sanctions on Rosoboronexport, which were levied against the arms firm in the George W. Bush administration but lifted by Obama.

The bill would prohibit the direct or indirect use of government funds to enter into contracts or agreements with the Russian company, and prohibit U.S. persons and corporate entities from directly transferring funds, goods, or technology to Rosoboronexport or providing financing for its operations.

“Despite the international community’s overwhelming condemnation, the Russian government continues to support the separatists in Eastern Ukraine responsible for the murder of 298 civilians aboard Malaysian Airlines flight 17. Rosoboronexport is intimately involved in Russia’s illegal actions in Crimea and Ukraine, not to mention the company’s role as the Assad regime’s chief weapons suppliers,” said Moran. “Americans simply should not be doing business with Putin’s arms dealer.”

“Russia has had every opportunity to be a responsible member of the international community, but, under Vladimir Putin, instead has chosen to act as a bully and a thug,” Kinzinger  said. “Placing sanctions on Rosoboronexport will have real effects on Russia’s economy and begin to put pressure on the ruling class responsible for recent aggressions. It is time for the U.S. and our European allies to make the cost of Putin’s actions exceed any benefits he hopes to achieve through regional destabilization.”


Obama was asked at the conclusion of today’s statement whether the U.S. had entered a new Cold War with Russia.

“No, it’s not a new cold war,” he said. “What it is, is a very specific issue related to Russia’s unwillingness to recognize that Ukraine can chart its own path. And I think that if you listen to President Poroshenko, if you listen to the Ukrainian people, they’ve consistently said they seek good relations with Russia.”


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