Analysts have overlooked the significant economic impact on the Russian economy if the United States designates Russia as a state sponsor of terrorism. Russia’s latest actions, including its attack on a shopping mall in Ukraine, have increased pressure on the United States to declare Russia a state sponsor of terrorism.
What is a state sponsor of terrorism designation? “The United States currently designates as state sponsors of acts of international terrorism the governments of Syria, Iran, North Korea and Cuba,” according to the Congressional Research Service (CRS). “A terrorism designation is only part of the bilateral relationship between the United States and each of these governments.”
The secretary of state is authorized to “designate a foreign government for repeatedly providing support for acts of international terrorism, and to reduce aid or trade to that country accordingly,” notes the CRS. The three statutes that provide for this authorization are 1) Section 620A of the Foreign Assistance Act 1961, as amended; 2) Section 40 of the Arms Export Control Act, which, as amended, which “prohibits exports, credits, guarantees, other financial assistance, export licenses supervised by the Department status and general eligibility related to the provision of ammunition under the law,” according to CRS; and 3) Section 1754(c) of the Export Control Act 2018.
What would be the economic implications for Russia of being designated as a state sponsor of acts of international terrorism? “The impacts would be quite severe,” Jason M. Blazakis, a practice professor at the Middlebury Institute of International Studies in Monterey, said in an interview. “It would probably expand the types of material that couldn’t go to Russia. Dual export restrictions are a key aspect of SST [State Sponsor of Terrorism] regime.
“Secondly, and perhaps more importantly, adding Russia to the state regime sponsor of terrorism would have implications for every government that continues to engage in trade, particularly defense-related, with Russia. The SST list would have side effects for countries engaged in such exchanges and they would become the target of side sections unless the President issues a waiver to exempt the activity.
Blazakis served as Director of the US Department of State’s Office of Counterterrorism Funding and Designations in the Office of Counterterrorism from 2008 to 2018. “Yet in the case of Russia, adding it to the list is important for this very reason. The US government should want to complicate every aspect of another country’s relationship with Russia. It’s pretty clear to me that the balance has tipped again in Russia’s favor and that they have resisted sanctions so far, and although sanctions take time to have an impact, it’s unlikely that that impact will be achieved by winter unless a much greater sanction is imposed — the inclusion of Russia on the list of state sponsors of terrorism.
“It would also have the added benefit of incentivizing more companies to reduce risks from Russia. This would likely include US and non-US companies. Companies don’t like to operate in countries that sponsor terrorism. is why Sudan tried so hard to get off the SST list during the Trump administration.
Major litigation risk for Russia if designated as state sponsor of terrorism: “I believe that if Russia is designated as a state sponsor of terrorism, it will greatly improve the ability of foreigners to sue Russia in US courts,” said Charles H. Camp, a Washington, D.C.-based international attorney who has represented foreigners and nationals. clients in international litigation and debt collection.
Camp points to the 8-0 decision by the United States Supreme Court in Opati c. Republic of Sudan. “It has been more than two decades since Al Qaeda operatives detonated bombs outside US embassies in Kenya and Tanzania, killing more than 200 people and injuring thousands more,” writes Amy Howe for SCOTUSblog . “The victims and their family members later filed a lawsuit in federal court in Washington, DC, seeking to hold Sudan accountable for its role in supporting al-Qaeda. The trial court awarded them billions of dollars, but a federal appeals court cut that sum in half. He ruled that the plaintiffs could not obtain punitive damages from Sudan because Congress did not authorize such damages until 10 years after the bombings. [The] The Supreme Court unanimously (with the recusal of Justice Brett Kavanaugh) overturned that decision, setting the stage for billions of dollars in punitive damages to be reinstated.
“Although foreign governments cannot normally be sued in U.S. courts, the plaintiffs brought their action under the Foreign Sovereign Immunities Act, which governs foreign country immunity and includes several exceptions to the ban. general prosecution. One of these exceptions is the “terrorist exception”, enacted in 1996, which allows foreign countries that have been identified as “state sponsors” of terrorism to be prosecuted in US courts for supporting terrorists.” (Emphasis added.)
One can only speculate on the extent of damages, including punitive damages, that a US jury would award to Ukrainian victims suing the Russian government in US courts.
“Once the United States finally designates Russia as a state sponsor of terrorism, Russia will be stripped of all immunity under the US Foreign Sovereign Immunities Act,” Camp said in an interview. “This will result, above all, in the fact that litigants will be able to obtain not only compensatory damages, but punitive damages against Russia. In my opinion, such judgments that can be made against Russia will be of almost infinite amount and will cripple Russia’s ability to operate financially outside of Russia for decades to come, inflicting more financial suffering on Russia. than any sanctions currently imposed or sanctions that would be imposed on Russia when it is designated as a state sponsor of terrorism.
There is bipartisan support for the designation. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Mitch McConnell (R-KY) agree on one thing: The United States should declare Russia a state sponsor of terrorism. Ukrainian President Volodymyr Zelensky agrees, citing a Russian missile hitting a shopping mall in Kremenchuk and stating that “the Russian state has become the largest terrorist organization in the world.” G7 leaders, including US President Joe Biden, called the missile strike on the mall an “abominable attack”.
What would be the economic impact on Russia if the United States declared Russia a state sponsor of terrorism? The impact would be significant and could weigh on the Russian economy for decades.