That is not to say that all Russia’s business is likely to be penalised by the US Treasury, but the seemingly random nature of last week’s designations is a warning that anyone could be next.
The sanctions inhibit the access of Russia’s richest oligarchs to foreign funds. The US is attacking the country’s core economy rather than its president directly.
Certainly, investors in Russia have taken more of a beating, perhaps, in the short term than some companies that have been freshly sanctioned.
Plenty will have convinced themselves that Russian business is distinct from the Russian state when they invested their cash. Wherever the links between the Kremlin and big Russian business actually lie, the latest round of sanctions has dispensed with any sense of nuance in this regard. Anyone is fair game now and investors must suffer the consequences of their investment choices.
If international investors heed the warning of their peers who sit on Rusal bonds that they will shortly not be allowed to own, but for which they cannot find a bid, they would do well to steer clear of Russian investment altogether, at least for now.
Certainly, it is hard to see the situation de-escalating soon. US president Donald Trump seems as impetuous as Putin is belligerent. Meanwhile, there are a host of issues for them to keep falling out over — Syria, Skripal, election meddling and so on.
Russia has a history of toughing out foreign attempts to control it. If this is a new Cold War with an economic front, then investors might well end up in the firing line if they want to play in Russian markets.