Trump administration weighs lifting sanctions on Russian investment fund
The Trump administration is reviewing a Russian request to lift sanctions on the Russian Direct Investment Fund, a state fund tied to a diesel shipment deal that has drawn opposition in Congress.
The Trump administration is weighing a request to lift sanctions on the Russian Direct Investment Fund, a multibillion-dollar Russian state fund that the Biden administration sanctioned days after Russia invaded Ukraine in 2022. The New York Times reported the review on Tuesday, and a U.S. official confirmed to the paper that the application is being assessed through established channels as part of an effort to improve U.S.-Russia relations and help end the war.
The Biden administration had described the fund as a « slush fund » for Russian President Vladimir Putin when it imposed penalties on it. The official interviewed by the Times praised the fund's chief, Kirill Dmitriev, as « a helpful envoy. » According to people familiar with the negotiations, Russian officials pressed for the relief during talks over the fund's role in shipping Russian diesel to the United States.
That diesel deal is central to the story. Trump suspended sanctions on Russian diesel on Oct. 9, and the fund has since helped arrange the first shipments, according to a senior Russian official. Three tankers have set out for the United States this month, and the Times reported that the diesel was shipped before any American buyer had paid for it. Russian Deputy Prime Minister Alexander Novak confirmed the tanker movements on the sidelines of the Gas Exporting Countries Forum summit, saying a fourth vessel was expected to depart Russia on Oct. 28. The cargo totals around 140,000 metric tons and is the first authorized under the agreement, which the administration framed as a way to ease diesel prices amid supply disruptions linked to the war with Iran and Ukrainian strikes on Russian refineries.
Dmitriev, Putin's economic envoy to Washington, did not mention his push for sanctions relief when he spoke at a Moscow conference on Oct. 16. Instead, he said the diesel deal was helping convince Americans that sanctions are « philosophically wrong. » He has also drawn a warm reception in Trump's circle. Special envoy Steve Witkoff told Putin at a negotiating table in St. Petersburg last week, « It's been really, really good dealing with Kirill. »
Eric Green, who oversaw Russia policy on the Biden White House's National Security Council, told the Times the fund was an early target because its access to Western finance could help Moscow pay for the war. Lifting the penalties now, he said, would send a « real strong message » that Washington is backing away from keeping economic pressure in place until a settlement in Ukraine. Trump has so far kept nearly all Biden-era sanctions on Russia in place.
The diesel arrangement has also triggered a legal and political dispute. Sen. Richard Blumenthal, D-Conn., demanded that two shipping companies, Eastern Mediterranean Maritime Limited and PetroVietnam, recall tankers bound for U.S. ports, arguing in letters that a Treasury Department general license cannot override the 2022 ban on Russian oil imports and that the deliveries would violate federal law. Lawmakers from both parties have questioned whether the administration can bypass that law without congressional approval. Jeremy Paner, a partner at Hughes Hubbard & Reed and a former Treasury sanctions official, argued that the president has the authority to authorize the imports, saying that « a license does not get rid of a prohibition. It's simply allowed. »
Critics, including some Republican lawmakers, argue that Trump is granting economic benefits to Putin while receiving nothing in return on the war. Dmitriev's ties to the Kremlin are extensive. People who know him told the Times that his wife is close with one of Putin's daughters, and that he has done deals with Gulf figures such as Saudi Crown Prince Mohammed bin Salman, who also has Trump's ear. At an October conference, Dmitriev declared, « The ice has finally broken. »
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