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US bought ventilators from Russian company under sanctions

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Via Financial Times

The US purchased ventilators from a company under its own sanctions regime as part of an aid package Russian president Vladimir Putin sent to New York to help fight the coronavirus epidemic.

Russia’s delivery of medical supplies on a giant AN-124 cargo plane included ventilators made by Kret, a subsidiary of Rostec, the Kremlin’s defence conglomerate, which is on a US Treasury blacklist

The US Treasury’s Office of Foreign Asset Control told the FT that “the humanitarian deliveries received from the Russian government appear non-sanctionable under Russia/Ukraine related sanctions authorities administered by Ofac”. 

“To the extent that such sanctions apply, Treasury has authority to license US persons to engage in transactions that are consistent with US foreign policy and national security interests,” Ofac said.

Footage of workers at New York’s John F Kennedy airport unloading boxes stamped with manufacturer Kret’s logo was played repeatedly on Russian state television on Thursday, the day after the plane landed — an embarrassing image for the US amid suggestions it may consider easing its sanctions on Moscow during the pandemic. 

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An air traffic controller thanked the AN-124’s pilot for “all the assistance you’re bringing in”, while US President Donald Trump said the aid was “a very nice gesture” by Mr Putin.

“I’m not concerned about Russian propaganda,” Mr Trump said. “He offered a lot of high quality stuff that I accepted. That may save a lot of lives. I’ll take it every day.”

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The US sanctions normally prohibit all American people and companies from dealing with entities on its Specially Designated Nationals list. Kret was added to the SDN list in 2014 for its manufacture of “electronic warfare and intelligence equipment” as well as several important military systems and components.

“Both countries have provided humanitarian assistance to each other in times of crisis in the past and will no doubt do so again in the future,” US state department spokesperson Morgan Ortagus said on Wednesday. “This is a time to work together to overcome a common enemy that threatens the lives of all of us.”

Russia said that some of the goods in the shipment were paid for by the Russian Direct Investment Fund, a sovereign wealth fund that is under more limited US Treasury sanctions restricting its debt financing, although it is not on the blacklist. RDIF said that it did not pay for the Kret ventilators. The US said that it paid for the shipment in full and denied that RDIF split the cost.

Even as coronavirus cases in Russia continue to rise — growing to 4,149 on Friday, with 34 deaths — Mr Putin has sought to project Russia’s power abroad by offering aid to more stricken countries.

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Russia’s defence ministry has delivered at least 15 planeloads of medical supplies, as well as 100 virologists and eight medical teams, to Italy, which is home to some of the biggest supporters in the EU for ending western sanctions against Moscow. 

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Mr Putin also sent aid to Serbia on Friday, which president Aleksandar Vucic said was a sign that “the Russian leadership is thinking about Serbia and the friendly Serbian people”.

Rostec said that Kret supplied medical facilities in Russia’s regions with 5,700 respirators and had no commercial contracts to sell them. “Making decisions to send state aid is the prerogative of the president and the cabinet,” Rostec said.

Mr Putin’s critics attacked him for sending other countries the aid instead of focusing on Russia’s domestic needs.

“Russia really sold the US masks and medical supplies when doctors and nurses across the country don’t have masks and are infecting each other,” opposition leader Alexei Navalny tweeted. “Putin has gone mad.”

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