February 2, 2017 / 4:55 PM / 6 months ago

U.S. makes limited exceptions to sanctions on Russian spy agency

3 Min Read

Cars drive past the headquarters of the Federal Security Service (FSB) in central Moscow, Russia, November 10, 2015.Sergei Karpukhin

WASHINGTON (Reuters) - The U.S. Treasury Department on Thursday adjusted sanctions on Russian intelligence agency FSB, making limited exceptions to the measures put in place by former President Barack Obama over accusations Moscow tried to influence the 2016 U.S. presidential election with cyber attacks on political organizations.

The department said in a statement it would allow U.S. companies to make limited transactions with FSB that are needed to gain approval to import information technology products into Russia.

At the White House, President Donald Trump responded to a reporter's question about whether he was easing sanctions on Russia, saying, "I'm not easing anything."

Sanctions experts and former Obama administration officials stressed the exceptions to the sanctions imposed in December do not signal a broader shift in Russia policy.

In a conference call with reporters, a senior Treasury Department official said the exceptions were "a very technical fix" made in response to "direct complaints" from companies that were unable to import many consumer technology products without a permit from the FSB. The action had been in the making for weeks before Trump took office on Jan. 20, the official said.

Beyond its intelligence function, the FSB also regulates the importation of software and hardware that contains cryptography. Companies need FSB approval even to import broadly available commercial products such as cell phones and printers if they contain encryption.

Peter Harrell, a sanctions expert and former senior U.S. State Department official, said Treasury officials likely had not considered the issue in December.

"I don't think when they sanctioned FSB they were intending to complicate the sale of cell phones and tablets," Harrell said.

David Mortlock, a former National Security Council advisor for Obama said that before granting such exceptions, the administration would ask who a sanction was hurting and who it was benefiting.

Mortlock, now an attorney, said "here it's a pretty easy calculus" because it was clear tech companies were the ones harmed by not being able to import software into Russia, not the spy agencies.

U.S. intelligence agencies accused the FSB of involvement in hacking of Democratic Party organizations during the election to discredit Democrat Hillary Clinton and help Republican Trump.

The agencies and private cyber security experts concluded the FSB first broke into the Democratic National Committee’s computer system in the summer of 2015 and began monitoring email and chat conversations.

They said FSB was one of two Russian spy agencies involved in a broad operation approved by top-ranking people in the Russian government. In December, Obama expelled 35 suspected Russian spies and sanctioned two spy agencies. He also sanctioned four Russian intelligence officers and three companies that he said provided support to the cyber operations.

Reporting by Joel Schectman and Dustin Volz; additional reporting by Yeganeh Torbati and Jason Lange; Editing by Alistair Bell and Grant McCool

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