Transatlantic Trade Update text overlaid on top of images of US, UK and EU flagsWhile COVID-19 infections continue to rise globally and transatlantic governments are responding accordingly, the European Union (EU) and United Kingdom (UK) resumed negotiations over terms for its relationship, post Brexit.  Late last week, the EU’s investment screening regulation entered into force; the bloc continues to move forward in its process to approve an EU Global Human Rights Sanction Regime.  On 22 October, the United States (US), UK and EU, along with the United Nations High Commissioner for Refugees, issued a joint statement, following their co-hosting of a donor conference on “Sustaining Support for the Rohingya Refugee Response.”  Transatlantic attention also continued to focus this week on increased tensions with Turkey and other regional disputes.

Meanwhile, the US Department of Justice (DOJ) announced a civil antitrust lawsuit against Google.  On 20 October, the United States nominated Christopher Liddell as the US candidate for the position of Secretary General of the Organisation for Economic Cooperation and Development (OECD).  With the US presidential election is in its final days, President Donald Trump squared off against Democratic presidential contender Joe Biden in a final civil debate on Thursday.  Early-voting by Americans has hit record numbers ahead of the 3 November General Election.

COVID-19 Updates | EU, UK and US

The second wave of the COVID-19 pandemic continues to engulf Europe.  Consequently, many countries have taken decisive measures to prevent the spread of the virus, re-introducing national lockdowns, such as in the Czech Republic and Ireland.  Other countries opted for regional lockdowns, such as in parts of Spain and Italy.  Meanwhile, the UK, France and Belgium have implemented more localized restrictions, coupled with curfews.

Amid increasing rates of COVID-19 infections in Europe, several European leaders have expressed a desire for a more consistent and coordinated response to address the latest wave of COVID-19 throughout EU Member States.  As such, European Council President Charles Michel has scheduled a video conference on 29 October with the EU27 Heads of State in an attempt to align and strengthen the collective bloc response effort to COVID-19.

Preliminarily, the Council adopted on 13 October a recommendation to coordinate measures affecting free movement in Europe.  The recommendations include setting out common criteria for data sharing related to testing, new infections, and the percentage of positive tests that each Member State would submit to the European Centre for Disease Prevention and Control (ECDC).  ECDC will establish a weekly color-coded mapping of countries based on the data.  The recommendation also stipulates that free movement and related restrictions would become harmonized throughout Member States in accordance to the color-coding of territories.  The Council also adopted a revision of its list of third countries list on 22 October for which travel restrictions to the EU should be gradually lifted.  This includes Australia, Japan, New Zealand, Rwanda, Singapore, South Korea, Thailand and Uruguay.

With increasing COVID cases, additional senior officials in Europe have tested positive for COVID-19:  German Health Minister Jens Spahn, Austrian Foreign Affairs Minister Alexander Schallenberg, Czech Deputy Prime Minister Jan Hamáček and Belgian Minister for Foreign Affairs Sophie Wilmès, with the latter being hospitalized.  European Commission President Ursula von der Leyen and Finnish Prime Minister Sanna Marin, who both left last week’s European Council after being informed they encountered a person who contracted the virus, continue to test negative for COVID-19.

In terms of recovery from the pandemic, UK Chancellor Rishi Sunak announced on 22 October an amended version of the UK’s job support scheme that will include additional financial support for the hospitality industry and other industries affected by COVID-19 restrictions.  In the EU, the first tranche of funds from the European Instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE) was released on 21 October.  Approximately €17 billion was released in the form of two bonds (€10 billion due to be repaid by October 2030, and €7 billion to be repaid in 2040) to help protect jobs and ensure employment in 17 Member States.

Meanwhile, negotiations to finalize adjacent EU law to the EU Recovery Instrument are ongoing.  On 21 October, the Council agreed on its position with respect to the capital markets recovery package, which will facilitate “EU companies to raise capital on public markets, support the lending capacity of banks and boost investment in the real economy”.  The Council also approved its stance on the EU4Health programme unanimously, a programme that will include long-term EU actions in the health sector to improve the public health in the EU and to better cope with future health crises.  These proposals are now subject to inter-institutional negotiations with the European Parliament and the European Commission.  In spite of the progress in negotiations, European Central Bank President Christine Lagarde expressed uncertainty about the EU’s recovery amid the second wave of COVID-19 and suggested the EU consider making the new debt-based recovery fund a permanent stimulus tool that could be mobilized in equivalent situations.

In America, several states have reported increased hospitalizations of COVID patients, especially as cooler temperatures arrive across the country.  Speaker of the House Nancy Pelosi (D-California) indicated on Sunday, 18 October, that the White House had less than two days to finalize a deal with Democrats that could advance before the elections.  She and Secretary of the Treasury Steven Mnuchin spoke on Saturday and multiple times this week, as that Tuesday deadline slid amid reports of progress.  While talks reportedly continue, Speaker Pelosi raised concerns on Thursday of getting any final deal approved by Congress ahead of the election.  With ten days left before the elections, any final deal will require legislative text being drafted and reviews by legal counsel and budget scorekeepers.  Two of the outstanding issues to be resolved reportedly include liability protection for employers (a Republican priority) and Federal assistance to state and local governments (a priority for Democrats).

While US President Donald Trump has urged Congress to “go big” on the next COVID relief package, Senate Majority Leader Mitch McConnell (R-Kentucky) has reminded,

He’s talking about a much larger amount [$1.8 trillion] than I can sell to my members.”

Senate Republicans continue to prefer a $1 trillion or less price tag for the next relief bill, particularly after news that the Federal deficit hit $3.1 trillion in Fiscal 2020 (more than tripling the $984 billion deficit from Fiscal 2019).  Meanwhile, Majority Leader McConnell moved forward with a Senate floor vote this past week on a narrower $500 billion package to provide funds to expand unemployment benefits, financial aid to schools and funding for testing and contact-tracing.  The measure failed to clear the 60-vote threshold required in the Senate.

On 22 October, the US Food and Drug Administration (FDA) approved Gilead Sciences’ antiviral drug Veklury (remdesivir) “for use in adult and pediatric patients 12 years of age and older and weighing at least 40 kilograms (about 88 pounds) for the treatment of COVID-19 requiring hospitalization.”  President Trump was treated with remdesivir during his brief stay at Walter Reed National Military Medical Center earlier this month.  Also earlier in October, a World Health Organization (WHO) sponsored study stated remdesivir fails to prevent deaths among patients, which was later criticized by Gilead as not having undergone a rigorous scientific peer review.  Gilead published an open letter on its website on 22 October, detailing the testing remdesivir had undergone to obtain the FDA approval.

UK-EU Relations

In the aftermath the European Council’s conclusions last week and UK Prime Minister’s Boris Johnson speech, UK Chief Negotiator David Frost and EU Chief Negotiation Michel Barnier agreed on Monday, 19 October, to resume and intensify Brexit talks based on the legal texts.

UK Cabinet Office Minister Michael Gove stated during a speech in the House of Commons this week that the EU has been refusing the negotiate based on legal texts, and was less available to meet than the UK, something that led to delays and Prime Minster Johnson’s 16 October decision to suspend negotiations.  Gove noted that the EU’s agreement to proceed with an intensification of talks has been a “constructive” move and one the showed “reflection of the strength and resolution” by Prime Minister Johnson.

Signs of a negotiation breakthrough were outlined in a Politico article on 21 October, following a call between Negotiators Barnier and Frost.  EU Chief Negotiator Barnier underlined during a speech at the European Parliament that “an agreement is within reach if both sides are willing to work constructively.”

The EU and the UK entered the final and renewed phase of the Brexit negotiations on 22 October, on the basis of common principles outlined in the UK Government’s statement.  Negotiators Barnier and Frost will continue the talks in London until Sunday.  Subject to progress achieved, further meetings are expected to be held in the coming weeks, either in-person or by video conference, as based on possible travel restrictions.  We will report on the outcome of this phase of negotiations in our next report.

Meanwhile, the UK Government proposed a post-Brexit legislation for the financial services sector on 21 October, covering a broad range of issues – such as investment funds, pension products, bank capitals and regulatory authority powers.

US-EU Relations

In advance of the 9 November Trade Ministers Summit, the Council discussed the World Trade Organization (WTO) Director General race and trade relations with the United States this week at the technical-level, following the World Trade Organization’s (WTO) announcement on the large civil aircraft disputes.  While further technical-level talks are expected ahead of the Ministerial meeting, the European Commission was seeking to ascertain the appetite of Member States to possibly move forward with WTO-approved retaliatory tariffs in the Airbus-Boeing dispute.  Some countries have expressed reservations that such a retaliation could lead to a trade war with the United States in light of the Airbus subsidies.  Most Member States prefer awaiting a final decision on any possible EU action until after the US General Election.

Regarding the EU’s endorsement of a WTO Director General-candidate, differences remain amid EU Member States over which candidate – Nigeria’s Ngozi Okonjo-Iweala and South Korea’s Yoo Myung-hee – to endorse.  Discussions continued on Friday; if differences remain, EU27 Ambassadors will discuss the candidacy on Monday, 26 October.

EU Trade Developments

A week into the EU’s investment screening regulation entering into full force, some EU Member States are still working on adopting or amending the national-level screening rule set forth by EU legislation.  Nevertheless, EU investment restrictions pertaining to Foreign Direct Investment (FDI) requirements that involve different levels of EU Member States coordination, cooperation and information sharing.  The FDI mechanism includes mandatory filing requirements and clearance for foreign investors in sensitive or restricted sectors.  The EU Commission also published an FAQ Memorandum of the new EU FDI restrictions.

On 19 October, the European Commission published its work programme for 2021, outlining anticipated policy initiatives in six priority themes:  (1) the European Green Deal, (2) a Europe in the digital age, (3) an economy that works for people, (4) a stronger Europe in the world, (5) promoting the European way of life, and (6) pushing European democracy.  As anticipated, climate neutrality goals are underpinning the future policy priorities in a horizontal manner, with a proposed target to reduce emissions by at least 55% by 2030 (compared to 1990 levels).  By the second quarter of 2021, the European Commission is expected to propose a carbon border adjustment mechanism to help reduce carbon emissions “in a WTO-compatible way”.  Other anticipated trade policy initiatives include:  a legal framework for a generalized scheme of preferences granting trade advantages to developing countries (expected in Q2 2021), a legislative instrument to deter and counteract coercive actions by third countries (expected in Q4 2021) and communication on strengthening the EU’s contribution to rules-based multilateralism (expected in Q2 2021).  As a follow up to the White Paper on foreign subsidies, two legislative proposals are expected in Q2 2021, aiming to level the playing field and to amend public procurement rules.

US Antitrust Action | Google

On Tuesday, 20 October, the US Justice Department and 11 American states filed an antitrust civil lawsuit against Google for unlawfully maintaining a monopoly in general search services and search advertising in violation of Section Two of the Sherman Act.  After his January 2019 confirmation hearing, after bipartisan concerns were raised, Attorney General William Barr committed to examine the impacts the asserted concentration in technology markets may have had on free, fair, and open competition.  In July 2019, DOJ initiated a review of Market-Leading Online platforms, such as Google, with the stated goal of assessing “the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.”  After more than a year of investigation, DOJ filed the suit, citing Google’s exclusionary practices harm competition.  According to Deputy Attorney General Jeffrey Rosen, DOJ will continue its review of competitive practices by market-leading online platforms, and where necessary address those as well.

The US antitrust action comes years after the EU similarly sought to address Google.  From 2017 to 2019, EU regulators investigated (which started back in 2010) and fined the American technology giant three times, levying $9 billion in penalties while ordering it to lower its barriers to competitors.  Unlike Europe, lawsuits in the United States are quicker and courts have the authority to force break-ups, such as possibly dividing Google’s search and advertising divisions.  US antitrust regulators may also possibly draw on lessons learned from the European efforts to curb Google.  Success, however, is not guaranteed.  It may take until 2024 for the case to work its way through the US legal system, including a likely Supreme Court appeal.  US antitrust regulators will need to present a case to US courts that includes possible remedies, which may include a break-up recommendation, for reviving competition in the search engine and advertising market dominated by Google.

Meanwhile, UK and Australian regulators have recently finalized their respective inquiries of Google’s impact on the news media and advertising.  In the UK, authorities have recommended to Parliament that new regulations be introduced to compel Google to make its data available to rival search engines and limit its ability to be the default search engine on smartphones/browsers.  Australia is drafting a mandatory code of conduct to require Google (and Facebook) to pay news publishers for their content.

US-UK Talks

This week, UK Trade Secretary Liz Truss indicated negotiations for a comprehensive free trade agreement were “intensifying” enough to put the two countries in a “good position” ahead of the US elections.  She added via Twitter,

We want a deal that delivers for all parts of [Great Britain] and is forward-leaning in modern areas like tech & services.”

The fifth round of negotiations commenced earlier this week and are set to conclude at the end of next week.

British and American participants joined the third meeting of the UK-US Financial Regulatory Working Group virtually on 20 October.  Formed in 2018, this was the first meeting of the Working Group since Britain left the European Union.  According to a US Treasury Department readout,

The Working Group meeting focused on five key themes: (1) the economic response to, and potential financial stability impacts of, the COVID-19 crisis, (2) international cooperation and 2021 priorities, (3) cross-border rules and overseas recognition/equivalence/substituted compliance regimes, (4) sustainable finance, and (5) financial innovation.”

The participants also “welcomed the announcement of the signing of a Memorandum of Understanding between the Bank of England and CFTC [US Commodity Futures Trading Commission] regarding supervisory cooperation in relation to UK and U.S. central counterparties that operate on a cross-border basis.”  The next Working Group meeting is expected to take place in the first half of 2021.

Other US Developments

During Thursday’s presidential debate, President Trump and former Vice President Biden sparred on differing approaches to addressing COVID-19, climate change, healthcare and racism.  Democratic presidential contender Biden said he would not rule out a lockdown, if scientists believe it would help contain the spread of COVID-19.  President Trump said it was wrong to inflict further damage to the US economy, noting most who contract the virus recover from it.  He observed the US economy is massive and argued against shuttering it, adding,

People are losing their jobs, they’re committing suicide. There’s depression, alcohol, drugs at a level nobody’s ever seen before.”

Biden instead focused on 220,000-plus American COVID-related deaths.  With respect to climate change, Biden suggested it is an “existential threat to humanity.”  When pressed by President Trump on whether he “would close down the oil industry” in America, Biden responded,

I would transition from the oil industry, yes, because the oil industry pollutes significantly.”

He added “Big Oil” (a reference to US oil companies) would be replaced by renewable energy over time to move the United States towards net zero emissions.  President Trump defended his decision to withdraw the United States from the Paris Climate Accord, arguing the United States is not a major polluter and pointing to the People’s Republic of China (China) as the largest polluter.

US Secretary of State Mike Pompeo met with Romanian Foreign Minister Bogdan Aurescu in Washington on 19 October.  According to a State Department readout, the two leaders discussed an Intergovernmental Agreement initialed on 9 October for the refurbishment and construction of reactors at the Cernavoda nuclear power plant in Romania.  Other topics of discussion included strengthening the bilateral defense relationship, improving energy security in Europe, joint efforts to create clean 5G networks, and the growth-generating potential of the Three Seas Initiative.  Secretary Pompeo also reiterated “increased propaganda and malign influence from communist China and Russia and their proxies.”

Secretary Pompeo participated in the virtual Three Seas Summit hosted by Estonia this week.  In remarks to the forum, he cited transatlantic cooperation on issues that range from recovering from the pandemic, addressing the Chinese Communist Party, and ensuring “energy exploration in the Eastern Mediterranean is done peacefully and with respect for sovereignty.”  Secretary Pompeo added the Three Seas Initiative provides “an opportunity to link together our infrastructure and energy markets in ways that will generate economic security for generations to come.”  He acknowledged the participating countries had implemented “necessary legal, financial, analytic tools to start making concrete investments” in infrastructure, including standing up an autonomous Investment Fund, while also reiterating the US commitment to provide $1 billion for these projects.

On 20 October, the State Department issued a brief statement on talks with Russia with respect to a potential short-term arms control agreement.  State reflected:

We appreciate the Russian Federation’s willingness to make progress on the issue of nuclear arms control.  The United States is prepared to meet immediately to finalize a verifiable agreement.  We expect Russia to empower its diplomats to do the same.”

That same day, Senate Foreign Relations Committee Ranking Member Robert Menendez (D-New Jersey) issued a statement welcoming the “band aid” development.  He observed,

As we have repeatedly told President Trump for years, it is in the national interest of the United States to extend the New START treaty as we continue dialogue with both Russia and China on key nuclear issues such as limitations on non-strategic weapons and the inclusion in arms control agreements of new nuclear delivery systems.  . . .  The real impact of a freeze on the total number of nuclear warheads will be unclear unless the Trump administration can ensure Russia sticks to the agreement’s terms through robust verification mechanisms.”

On 22 October, House Foreign Affairs Committee (HFAC) Chairman Eliot Engel (D-New York) and HFAC Europe Subcommittee Chairman William Keating (D-Massachusetts) issued a statement warning of national security dangers (namely citing Russian aggression) associated with the Trump Administration’s pending formal US withdrawal from the Open Skies Treaty.  They urged,

If the Administration is insistent on making this reckless decision, it should submit its official notice to Congress and wait the requisite 120 days before withdrawing from the Treaty. The American people, and our allies and partners, deserve at least as much.”

Also on Thursday, US Secretary of Defense Mark Esper participated in the NATO Defense Ministerial.  In addressing the forum, he reportedly focused on strengthening deterrence and defense, equitable burden sharing and Alliance unity, using the Defense Department’s new initiative, the “Guidance for Development of Alliances and Partnerships,” as a guide for the discussion. The Secretary further addressed Russian aggression and the risks of depending on the China for technology and critical infrastructure.

On 21 October, Secretary Pompeo spotlighted at a press briefing that he and EU High Representative Josep Borrell would launch the US-EU Dialogue via teleconference on China on Friday, 23 October.  The Dialogue is expected to serve as a forum for a dedicated forum for EU and U.S. experts to discuss the full range of issues related to China.  A joint statement at the conclusion of the Dialogue on Friday reflected,

Secretary Pompeo and High Representative Borrell agreed to continue meetings at the senior official and expert levels on themes including human rights, security, and multilateralism. The next high-level meeting between the Deputy Secretary of State and European External Action Service Secretary General will be held in mid-November 2020.”

On 23 October, the State Department reported the following countries had signed Joint Declaration on 5G Security – Bulgaria, North Macedonia and the Slovak Republic.  Text of the US-Bulgaria Declaration is available here; the US-North Macedonia Declaration text here; and US-Slovak Republic text here.  Secretary Pompeo met with Slovak Foreign Minister Ivan Korčok in Washington on Thursday.

Disputes Updates | Eastern Mediterranean, Nagorno-Karabakh

Since the re-opening of the coastal ghost town of Varosha on the island of Cyprus on 8 October, tensions between Turkey and Cyprus have increased.  On 13 October, the EU High Representative cited concerns regarding Turkish activities and violation of the protective status granted by the United Nations (UN) to the Varosha territory on the island.  The EU called for the reinstatement of the UN status, noting,

the EU reiterates that full respect of relevant UN Security Council Resolutions is crucial and calls for the immediate reversal of recent actions.”

This comes after the UN Security Council similarly expressed concern on 9 October and re-affirmed the status of Varosha as set out in previous Council resolutions – including resolutions 550 (1984) and 789 (1992) – saying no actions should be carried out in relation to Varosha that are not in accordance with these resolutions.

East Mediterranean tensions between the EU and Turkey relations are further heightened by continuous provocations with the Turkish research vessel Oruç Reis extending its activities within Greece’s demarcated maritime regionThis prompted the Greek Foreign Affairs Minister Nikos Dendias to call on the EU to consider suspending the EU-Turkey custom union.

The EU remains neutral with respect to the Azeri-Armenian conflict over disputed Nagorno-Karabakh, despite France serving as one of the Organization for Security and Co-operation in Europe (OSCE) Minsk Co-Chairs for the Nagorno-Karabakh conflict.  On 2 October, Commissioner for Crisis Management Janez Lenarčič announced EU humanitarian funding for the affected civilian populations.  Commissioner Lenarčič noted,

The EU stands in solidarity with all the people affected by the violence and is ready to provide further humanitarian support, should human suffering continue.”

The first tranche of EU emergency humanitarian assistance to Nagorno-Karabakh has already arrived.  This followed an EU High Representative Declaration on 10 October, welcoming the ceasefire agreement between the parties in the conflict and looking forward to negotiations of a political solution.  Unfortunately, ceasefire hopes shrank as hostilities resumed, with both parties accusing the other of breaking the truce.  On 21 October, Greek Member of the European Parliament Eva Kaili (Socialists & Democrats) requested the European Commission take action, suggesting the establishment of sanction-like travel restrictions on Azeris with diplomatic passports and calling for the revocation of the EU Visa Facilitation Agreement with Azerbaijan.

Secretary of State Pompeo met with the Azeri and Armenia Foreign Ministers separately on Friday in Washington.  Ahead of the meeting, in response to question from the media on 21 October, Secretary Pompeo said of the upcoming meetings and ongoing tensions:

It’s a complicated situation on the ground.  It’s a complicated diplomatic situation.  And our view remains, as does the view of nearly every European country, that the right path forward is to cease the conflict, tell them to de-escalate, that every country should stay out, provide no fuel for this conflict, no weapons systems, no support, and it is at that point that a diplomatic solution that would be acceptable to all can potentially be achieved.  That’s what I – that’s what I’ll talk to them about on Friday and I’m anxious to hear from them what they’re seeing on the ground and how we might get closer to what it is we think is not only in the United States’ best interest, but in each of their countries’ best interest as well.”

A State Department summary of the two Friday meetings noted Secretary Pompeo urged the two sides “to resolve the conflict based on the Helsinki Final Act principles of the non-use or threat of force, territorial integrity, and the equal rights and self-determination of peoples.”

On 23 October, Secretary Pompeo and High Representative Borrell also included statements on the situations in Belarus and Nagorno-Karabakh in their readout related to the new US-EU Dialogue.  They “called on the Belarusian authorities to engage in a meaningful dialogue with genuine representatives of civil society, in particular with the Coordination Council established by Sviatlana Tsikhanouskaya.”  With respect to Nagorno-Karabakh, they “urged the immediate cessation of hostilities and respect for the agreed ceasefire,” and called on the parties to re-engage in meaningful negotiations under the auspices of the OSCE Minsk Co-Chairs (US, France and Russia).

On 16 October, Senate Foreign Relations Committee (SFRC) Chairman James Risch (R-Idaho) released a statement on Turkey’s testing of its Russian-made S-400 missile system, noting,

Turkey’s test of the Russian S-400 missile defense system is unacceptable behavior from a North Atlantic Treaty Organization (NATO) ally. It further damages the alliance and poses a direct threat to the F-35 and other U.S. and NATO allies’ systems.”

Observing US law requires sanctions against countries that deepen their defense relationship with Russia, he warned,

Turkey and Russia have a deep history of disagreement and conflict. The burgeoning relationship between these two nations that Erdogan is pursuing has started to raise serious concerns for the security of the eastern Mediterranean and the Caucuses. These interests are in direct conflict with Turkey’s long-standing allies in NATO and fuel instability in the region.”

The House Foreign Affairs Committee (HFAC) leaders similarly issued a joint statement last Friday.  They noted,

[I]f reports of its latest S-400 test are accurate, Turkey has doubled down on a posture that undermines the NATO alliance and creates very real obstacles in our bilateral partnership. Acquiring the S-400 is sanctionable under the Countering America’s Adversaries Through Sanctions Act, and the Administration must impose these sanctions, as it did when China took delivery of the same system. We urge Turkey to recommit itself to its NATO treaty obligations and its NATO partners, starting by disposing of the S-400.”

In a press release issued on 16 October, HFAC Chairman Engel and Europe Subcommittee Chairman Keating noted they had sent a letter to Secretary Pompeo detailing Turkey’s democratic backsliding and aggressions, including the ongoing tensions in the Eastern Mediterranean.  They also spotlighted the Varosha situation and urged the Trump Administration to “increase pressure on Ankara, including through use of legally-required sanctions, to roll back Turkey’s aggressive behavior in the Eastern Mediterranean, Libya, Syria, Iraq, and Nagorno-Karabakh; [and] pressure it to give up its S-400 air defense system.”

Meanwhile, some SFRC Democrats introduced two resolutions on 22 October that would require the Secretary of State to detail Azerbaijan’s and Turkey’s human rights abuses throughout the South Caucasus (which includes Azerbaijan, Armenia and Georgia), along with Turkey’s record in Syria, Iraq, and Libya.  The measures would also include a review of U.S. security assistance and whether the United States should restrict or end security assistance and arms sales to these countries.  In the current Congress, lacking any Republican co-sponsors, the measures have no chance of advancing.  Should the Democrats gain majority control of the upper chamber, the next Congress (which convenes in January 2021) may see a re-introduction of and action on these resolutions.  The resolution on Azerbaijan is available here; the measure pertaining to Turkey here.

Sanctions Updates 

On Monday 19 October, the EU Commission proposed the EU Global Human Rights Sanction Regime targeting individuals or entities responsible for human rights violations and establishing the restrictive measures, which would include EU travel bans and asset freezes.  The Regime was informally known as the “EU Magnitsky Act”, but those EU Member States sympathetic to Russia expressed reservations with that name.  The Regime, once enacted, will act in parallel to the actual country-based sanction-listing, allowing for sanctions to be imposed on individual and entities regardless of the foreign jurisdiction to which they are subject.  Next steps, Member States must review the proposed Regime.

Following a German-French proposal to impose restrictive measures on those responsible for using chemical weapons against Russian politician Alexei Navalny, on 12 October, the European Council imposed sanctions against six individuals and the Syrian Center of Studies in Kaboun for Navalny’s Novichok chemical poisoning.  In the United States, a group of bipartisan US Senators urged Secretary Pompeo and Secretary of the Treasury Steven Mnuchin on 22 October to use existing authorities to impose new US sanctions on Russia for the poisoning of Navalny.  They cited as options, the Sergei Magnitsky Rule of Law Accountability Act, the Global Magnitsky Human Rights Accountability Act, and/or the Chemical and Biological Weapons Control and Warfare Elimination Act.

Also on 22 October, the EU sanctioned two individuals and a body of the Main Directorate of the Armed Forced of Russia as responsible for cyber-attacks suffered by the German Federal Parliament (Bundestag) on 2015.  To-date, the EU malicious cyber activity sanction regime includes eight individuals and four entities sanctioned.

Related to malicious cyber-attacks, on 19 October, DOJ announced a federal grand jury had returned an indictment in America charging six computer hackers, all of whom were residents and nationals of the Russian Federation and officers in Unit 74455 of the Russian Main Intelligence Directorate (GRU), a military intelligence agency of the General Staff of the Armed Forces.  According to DOJ,

These GRU hackers and their co-conspirators engaged in computer intrusions and attacks intended to support Russian government efforts to undermine, retaliate against, or otherwise destabilize: (1) Ukraine; (2) Georgia; (3) elections in France; (4) efforts to hold Russia accountable for its use of a weapons-grade nerve agent, Novichok, on foreign soil; and (5) the 2018 PyeongChang Winter Olympic Games after Russian athletes were banned from participating under their nation’s flag, as a consequence of Russian government-sponsored doping effort.”

On 23 October, the US Department of the Treasury sanctioned a Russian government research institution – State Research Center of the Russian Federation FGUP Central Scientific Research Institute of Chemistry and Mechanics (TsNIIKhM) – for its alleged connections to the “destructive” Triton malware.

Amid the US election cycle, the US Treasury Department designated five Iranian entities for attempting to influence elections in the United States on 22 October.  The United States also continues to impose unilateral sanctions related to Iran, along with imposing sanctions related to Hizballah.

Frank SamolisMatthew Kirk and Wolfgang Maschek contributed insights to this report.