McCain concerned over 'selective' enforcement of U.S. sanctions on Russia

15:40, 05 June 2016
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U.S. Senator John McCain (R., Ariz.) says he is concerned that the Obama Administration is 'selectively' enforcing sanctions on Russia for its invasion of Ukraine's Crimea, according to The Washington Free Beacon, an American politically conservative political journalism website.

John McCain / Photo from UNIAN

In his letter to Treasury Secretary Jack Lew, McCain suggested that the Obama administration is giving special treatment to a Russian rocket manufacturer that due to a recent restructuring fell under control of Russia's federal space agency, Roscosmos, The Washington Free Beacon wrote on June 3.

The United States currently purchases Russian RD-180 rocket engines from the manufacturer, known as NPO Energomash, to use during national security space launches.

"I write to express my concern with the appearance of selective enforcement of sanctions imposed in response to the invasion of Crimea by the Russian Federation," McCain wrote. "I am particularly troubled that, today, the Administration is allowing for the procurement of rocket engines for military space launches that result in the payment of money to a Russian state-owned corporation controlled by officers and directors who have been individually sanctioned in connection with the invasion."

A pair of executive orders signed by President Obama in March 2014 placed economic sanctions on individuals and entities deemed by the U.S. government to have contributed to the conflict in Ukraine.

The Treasury Department's Office of Foreign Assets Control concluded in March that the recent restructuring of Russia's space program did not lead to an "affirmative determination" to impose economic sanctions on NPO Energomash or Roscosmos. However, the department did note that the control of the rocket manufacturer by sanctioned individuals "could be a potential basis" to impose sanctions, a basis that McCain sought to prove in his letter to Lew.

McCain wrote that "numerous Roscosmos board members and executives" have either been subject to economic sanctions for Russia's invasion of Ukraine or are connected to Russian corporations targeted by sanctions.

Among them is Sergei Chemezov, a member of Roscosmos' board and CEO of Rostec Corporation, a state-owned defense company that is also subject to U.S. economic sanctions. A Rostec-owned bank that finances Roscosmos' operations, called Novikombank, is also sanctioned by the United States.

Read alsoU.S. to not lift Crimea sanctions unless peninsula de-occupied - U.S. official"This is very troubling. When examining the organizational structure of Roscosmos after Putin's recent restructuring initiative, it becomes abundantly clear that we are funneling U.S. taxpayer dollars to a Russian space agency that is financed by a sanctioned Russian bank, which is owned by a sanctioned Russian defense company, and which is controlled by a sanctioned Russian CEO, who also happens to be a close personal friend of Vladimir Putin," McCain wrote.

McCain said that other Russian companies owned by Chemezov's corporation have been targeted by U.S. sanctions, including a state-owned arms exporter and Kalashnikov, the country's biggest manufacturer of automatic and sniper weapons and guided artillery shells.

"Why, then, is Russia's space industry receiving such disparate treatment, especially in light of how it is financed and controlled?" McCain asked.

"Considering the relationship between Sergei Chemezov and [Russian Deputy Prime Minister] Dmitry Rogozin, as well as numerous other Roscosmos board members and executives who have been targeted by U.S. sanctions or who have ties to sanctioned Russian corporations, OFAC's decision to date not to enforce current sanctions against Roscosmos and NPO Energomash appears disturbingly arbitrary and hypocritical," McCain concluded.

Read alsoG7 leaders support sanctions against RussiaDmitry Rogozin, who oversees Russia's defense industry, is among seven Russian government officials sanctioned by the United States for contributing to the conflict in Ukraine.

McCain requested that the Treasury Department determine whether taxpayer dollars sent to Russia for space launch activities are "being used for a purchase from, or payment to, any entity owned or controlled by any person included on the list of specially-designated nationals and blocked persons" sanctioned in response to Russia's invasion of Crimea. McCain asked that the office report its findings to the Senate Armed Services Committee, which he chairs.

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