The Minsk agreement is still not fully implemented by Ukraine and Russia and violence continues to flare up periodically (e.g. very tense episode in August). In this context, the EU Council decided to renew its sanctions against Russia for six months in December. The US added new sanctions against Russia by adding new persons on the Specially Designated Nationals List and the Sectoral Sanctions Identifications List to target sanction evasion and other activities related to the conflict in Ukraine. In addition, the US imposed sanctions on persons who are considered responsible for causing the misappropriation of information with the purpose of interfering with election processes. 35 Russian diplomats were expelled. Russia didn’t retaliate.

Impact on country risk

EU sanctions have been extended for six months but are unlikely to be strengthened in the coming months. Indeed, Europeans are divided on the issue and forthcoming elections in some large European countries, such as France, can lead to a change in attitude towards Russia. In the US, the new administration of Donald Trump is likely to adopt a friendlier attitude towards Russia. Once in office, Mr Trump could reverse or soften sanctions on Russia as these were adopted by presidential executive order. However, this step is likely to be politically difficult as some Republicans expressed their support for the new sanctions against Russia.

Analyst: Pascaline della Faille, p.dellafaille@credendo.com