DASKA: The Defending American Security from Kremlin Aggression Act (DASKA) is a Russia sanctions bill recently passed by the U.S. Senate Foreign Relations Committee. It attempts to punish Russia for election interference and other bad behavior. Yet DASKA actually cracks down on the hundreds of U.S. companies that do business in Russia.
This crack down will also impact thousands of U.S. small business suppliers to key industries, like aerospace, agri-business, consumer goods and energy. These small and mid-size businesses are the heart and soul of many communities whose presence and jobs are critical to the vibrancy and health of local markets.
DASKA inadvertently harms U.S. companies instead of Russia. Congress must ACT NOW to fix DASKA so it punishes Putin, not U.S. businesses.
Unfortunately, despite good intentions, the legislation would cause serious unintended consequences for U.S. businesses. Some proponents have called DASKA “the sanctions bill from Hell,” but as the saying goes, the road to hell is often paved with good intentions. As written, DASKA would:
- Prevent U.S. companies from conducting legitimate business in Russia by forcing them to end joint ventures with Russian firms and potentially exit the Russian market entirely.
- Harm major U.S. firms across key economic sectors, from energy and agri-business to financial services and consumer goods. Small businesses dominate these sectors.
- Target in particular U.S. energy companies, which employ thousands of Americans and would be forced to withdraw from nearly 150 energy projects in 53 countries. That could lead to higher gas prices for Americans.
- Enrich Russian interests, with Russian firms taking over joint projects and effectively kicking out their American partners.
DASKA’s negative effects would especially hurt U.S. small businesses.
Small businesses are the lifeblood of the U.S. economy, with more than 95 percent of U.S. businesses employing less than 20 workers. Small businesses account for at least 60 percent of U.S. job growth. Yet DASKA would:
- Disrupt the supply chain through which small and medium-sized businesses supply larger firms with materials and parts.
- Damage the economic prospects of the many thousands of small businesses that fuel this supply chain. A single U.S. multinational, for example, can buy goods and services from more than 20,000 suppliers.
- Cause job losses and economic dislocations at many of these small businesses, which would harm local communities nationwide.
DASKA would disrupt financial markets, rather than strengthening them.
The legislation attempts to target Russian banks and the country’s government-issued sovereign debt. Yet DASKA’s effects would rebound against American financial institutions by:
- Cutting of their access to Russian rubles, meaning they couldn’t supply U.S. companies with vital capital.
- Making it even harder for U.S. firms to do business in Russia, without necessary financing.
- Hurting the retirement accounts of U.S. firefighters, police officers and teachers, which are managed by American investors in Russian debt.
DASKA would benefit our strategic adversaries, not punish them.
Russia is clearly a U.S. adversary, and DASKA purports to punish the country for election interference and aggression toward Ukraine and other nations. Yet DASKA actually benefits Russia and other geopolitical rivals by:
- Boosting the bottom lines of Russian companies as they take over joint ventures from U.S. firms.
- Encouraging Russian partnerships with China as U.S. firms leave the Russian market.
- Preventing the departing American companies from capitalizing on lucrative opportunities in Central Asia, which also benefits Russia.
Congress can easily fix DASKA.
Business and other groups have submitted a series of proposed changes to DASKA. They would alter the bill’s language to make it easier for U.S. companies to stay in the Russian market, while still cracking down on the Kremlin. Congress must fix DASKA – and sanction Putin, not U.S. companies.