when the so-called kremlin list was published the wealthy russians breathed a collective sigh of relief they simply expected something both mold biting and multi size i wonder though if you believe these relief may be a little bit premature do you think the worst is yet to come yes i do and i think that is reflected in secretary nugent's comments to congress earlier this week that this list could be a preview for future sanctions as a nation now many observers have pointed out that in compiling this report the trumpet ministration has essentially called pasted both the kremlin's phone book and the forbes magazine sleestak wealthiest russians what do you make of these hall of fame method of complacent well so it's not uncommon for the treasury to use on class classified and open source material to prepare such a reporter a list and the point about the forbes list and the copy paste from the list is interesting because if you notice and you're paying attention some of the same spelling mistakes that were contained in the forbes list have also been carried

over into the treasury report well as you say it's not uncommon to rely on public service materials but at the same time i think this report the sensually makes no distinction between people who are friendly to the kremlin and people who have been it could be argued persecuted by the kremlin so is there any substance to it because from the russian point of view it's just publishing. at least about who is who in russian politics and in russian business you know well if you take a look at the report it's what the designation criteria is and to your point you're correct in that some of the criteria is related to senior political officials in russia and some is just based on net worth and therefore you could have that latter group of people not have any ties to the russian government whatsoever and still find themselves in the report but then one should ask what's the point of compiling this report in the first place and i don't know if you would agree with me but that i. there is

a certain degree of i think charlie and even read to kill police targeting not so much russia but the congress do you think the way this report has been compiled ease it in keeping is it in compliance with the congress requirements i think they did their best to comply i think they actually added more information than i even expected them to add. to your point though this design of this report was to be a name and shame list in the effects of the practical effect of it is that people business partners people in joint ventures banks that are engaged in transactions with these parties would move away from them or enhance due diligence in regards to their commercial activities and give a higher higher level of scrutiny to those activities well and this is what many years officials have suggested that this least was designed to be some sort of a psychological tool and if you take into account the amount of fretting. among the

russian business elite on the eve of the opiates release i think that objective was definitely mad but given. you know the preexisting conditions they already existing environment with regard to the russian companies doing business in the united states do you really think it changes much because from my understanding the environment had already been pretty toxic even before the release of this report now i think that's a good point the environment was already rather toxic what i have heard is that certain banks are now including the people identified in the report on their political expose persons list and subjecting them to enhance due diligence and there's potentially going to be some of those parties off ordered from their financial institutions so i do think it's going to have some practical effect but your point there was already a toxic environment and many of those parties were already there sanction or subject to such enhanced diligence now mr fry just a technical question i know that you know how being. your clients to navigate

various sanctions regimes and. formally speaking of these are not sanctions this is some sort of quasi i official document a little bit like a wikipedia page verified by treasury secretary what's the right way of thinking about this report in legal terms does it actually compile the american the financial institutions to do anything about it the people who are least that know it doesn't and treasury stated right in the report this is not a sanctions list which is why it was so surprising when later on in the week treasury and secretary minutia mention that this report could be a preview of potential future sanctions targets after heavily caviare in the report saying it's not a sanctions list and there are no legal restrictions so nobody has any legal obligation to do anything with respect to this report but i think you'll find that when you work in sanctions long enough you see that the private sector does respond sometimes severely even when they don't have to when you get into this area of law

well i guess it's better to be saved in syria. there are two main strategists as far as i can understand that the wealthy russians can employ in the situation one is to rely on the love peace in washington and try to secure that capital is an investment and another would be to liquidate american holdings altogether we want do you think is more prudent at this point of time i think the latter strategy i think divesting from the u.s. to moving your assets abroad particularly when they're stating that some of these people may be designated at some point in the future under sanctions program is probably the right way to go i don't think there's a lot of political will in washington right now to revise the law or request an amended report be put out. by treasury so i think the latter and smarter strategy is actually to divest and i would also suggest that these parties who have been identified get in front of the treasury department and provide evidence to them as to why they are not they should not be considered as potential sanctions designations. it's interesting you say that because regardless of how tense the

relationship between our two countries has been i think up until recently there was a strong belief at least here in russia dead in the united states businessmen regardless of their country of origin are protected by the rule of law from base kind of political arbitrary in this. i wonder if you can still confidently say that it is the case that the american justice can protect companies that are connected to russia russia as a country rather than the kremlin. can still be protected from politically driven whether it is prosecution of even discrimination yes so there's an old saying here in america the justice is blind and i think that's true and it cuts both ways though it can both be a good thing and in certain circumstances it could be counterproductive in this idea of america will turn a blind eye and protect business interests in the face of the rule of law is

inaccurate and if you need to ask anybody about that you can ask the number of iranian an iranian americans that have been prosecuted under various sanctions that shoots for the last ten to fifteen years about protecting business interests so again i go back to this point justice is blind and it cuts both ways and we're seeing it play out here well it's it's an interesting turn around especially again when the united states is concerned because i think it is perceived internationally as politically a low risk country it's clearly no longer the case as you point out for the russians but i wonder if arbitrariness at this point is contained only to russia what about the other wealthy individuals from other countries do you think they should take notice of that yeah i think they should i mean there was a report just yesterday from reuters about france now turning to the euro to. you

trade with iran and i think we're going to see that more and more often as people will turn away from the u.s. financial system of the dollar because sanctions at this point are being overused and this is something that many sanctions experts including former treasury officials have stated so i think. the message is worldwide to wealthy businessmen that if you are engaged in con you bill or the u.s. believes you're engaged in conduct you could potentially become subject to some sort of sanctions restriction or u.s. sanctions law in the future but the question is can you fully divest from the american economy in a way that you would be still conducting business in countries and it will not gather in to the crosshairs of the american regulators is it still possible in this day and age to do business around the world and not be subjected to the american oversight possibly yes very difficult also yes. you know the fact is

that most trade is done in u.s. dollars there is u.s. persons involved in senior and managerial positions at many multinational corporations in the us to your point yes it's very difficult to completely avoid the u.s. if you're doing international business on a global scale but it is possible and i think there have been examples out there you know i've seen my own clients who were unable to use the u.s. system engage in an activity outside of the jurisdiction the united states successfully to your point it's very difficult now necessary the united states is believed to have pretty strong and to discrimination and libel laws do you think that is a promising recourse for companies or individuals who have been denied service because of their national origin no i don't think so not in this context and this is something that we've researched often we've represented many people on the list . once we've been able to take them off the sanctions list they've always wanted to

bring suits against the united states for the damage that was caused as a result of the designation but you have the u.s. government acting pursuant to legislation and if they're not doing anything outside of their authority and outside the color of law then you're no court is going to find the u.s. government to be liable for that activity i think the smarter route here particularly for those people on the report is to seek a determination from u.s. courts that their placement on the report and in fact the report itself may have violated the due process mandates of the administrative procedure act which is which is a law that governs federal agency actions but at mr for areas you pointed out putting an individual or a company on on death least does not necessarily compel anyone to take actions against them if let's say a financial institution denies this service to some russian individual can he

proceeded discrimination case simply because he as a russian was discriminated. for no reason that then being a russian right so well there is that what you said at the end is the material term if that's the cause is because he was a russian the action was taken then certainly you may have a case for discrimination but the banks response in that case would be we're not doing this because he's russian we're doing this because he was identified on a report of people that have close ties to the russian government and also or is a potential future sanctions that have me so i think that this rumination case in this regard would fail well mr ferriter we have to take a short break now but to me we'll be back in just a few moments stay tuned. scene

years ago i traveled across the united states exploring america's deadly love affair with a gun if a bad guy tried to get to one of my family members he would have better a lot better and i think it's fair and hurting whenever my my baby says my book was published in the year two thousand gulden home for a million americans have been killed by phones in the us going out of thought to me as i did this is a middle school we go through drills and we put ourselves some real scenarios it was interesting to see who actually got hit by the gun i just saw it had to return to the subject to track down each gun owner who i'd met and photographed

those years ago i don't know this but we are not. oh no appetite i mean for conflict is very very low these days publics are much more eager to see economic improvement than they are to. actually get into a fight with a day or or or with other powers in the world. welcome back to worlds apart with eric feder idea of washington based defense attorney specializing in sanctions and mr ferrari at the heart of this leads least as well

as a katsa law lie the allegations are freshest meddling in into the american elections and these allegations may have become accepted as a fact in the broader american political and media discourse but at this point at least they haven't been proven in the court of law. and they haven't been substantiated by any findings of for example the miller investigation and i wonder why they're within the american legal framework it is even necessary to to prove charge before meeting out punishment to selected individuals right well you have the court of law and then you have the court of public opinion answer your point i do think that the court of public opinion has made up its mind i'm a lawyer and i respect the court of law and what the opinion is of the courts of law and the juries that are impaneled in this country. so i think there are. as far as the public's concern there something was afoot and something did occur but you're right nothing has been proven yet and the point as to whether or not it's

unfair to take action in respect of this i think it's important to keep in mind that sanctions are often viewed as a tool of strategic communication and that the evidence very standards are very low for bringing the sanctions designation and sanctions are often utilized when there are there is not sufficient evidence to bring a criminal prosecution so all of that leads. to the situation now well say essentially what are you saying is that no it does not have to be proven in the court the floor before those sanctions are introduced and against any particular individual that's current now we just had a very interesting development in a year of the court of arbitration for sports overturning the suspension of russian athletes for doping essentially saying that the burden of proof has not been that triggering an avalanche of allegations against the court and i think this is not that interesting case when you have

a big gap between the core the public opinion and the actual court and the difference of it in standards for one another how big is the challenge do you think for the judges to deal with such politically charged cases it's very it's very difficult for judges to do. with this particularly i myself have brought numerous lawsuits against treasury for sanctions those nations and when you're in this area of law and you're dealing with federal agency action the courts give what they've refer to themselves as extreme deference to the decisions of the federal agencies involved in the designation process so it's very much an uphill battle and most of these cases are resolved through dialogue and communication with the federal agencies themselves rather than through a litigation type process i think it also raises a very interesting question that goes to the very fundamentals of the rule of law whether the adversary or the party that you are absolutely sure it is guilty of

deserves the same legal procedure the same burden of proof the same legal standards as others you are a practicing lawyer as you said you often bring cases our good cases contrary to the american government position do you encounter that kind of argument that kind of attitude in. opponents that a second party the party that to be do not like doesn't just deserve the same legal standard that is. suggested by the law absolutely so two points on that the first point is that the u.s. constitution doesn't protect foreign nationals abroad who are targeted by certain u.s. actions and then the second point there is that the u.s. doesn't view sanctions as an action against the targeted party but rather as a policeman of restrictions on u.s. persons who may transact with that party so they don't view it as we've determined

this person to be guilty or innocent of a crime they view it as we believe or we have a reason to believe this person is engaged in certain activity and therefore we are going to prevent our citizens and our businesses and our permanent legal residents from engaging in transactions with them now there is one interesting path. and that i think emerged in the court of arbitration for sport it's thrilling and may manifest itself in the american courts as well that both the doping allegations and the actual interference allegations made against the country but the courts have to deal with individual cases as far as you know does dan merica law allow any possibility of punishing an individual as a proxy for his or her country of origin no not for their country of origin is stated that way i don't think that's right there certainly built within the various sanctions regimes subsections of certain authorities which state that

if the party material assists a designated party then they themselves can be subject to those particular sanctions prohibitions. it's never defined simply by the fact that someone is russian the only parallel you may be able to draw is with the north korea and the cuban sanctions program where the authority itself blocks anyone who is a person of those countries and they're automatically blocked because of the nature of the authorities deployed now mr ferrari going back to the or in the fixations of the kremlin list i know that you believe that those named in the least may face delays in financial transactions as international banks subjected them to more scrutiny and i think many people in russia would actually welcome that because the illicit capital outflow from this country still significant according to russia's central bank it was around thirty one billion dollars last year could that possibly be a silver lining in this whole controversy that the western financial institutions will

no longer turn a blind eye to money being siphoned off from this country right so it's an interesting point and many of my clients often say once they've been put on the list that they'd be happy to have everyone look through their books and and through their business. doesn't see that nothing illicit is ongoing so that's an interesting point that you raise and one that i hear myself quite often now i know that there are a lot of russians both individuals and companies who are now trying to low b. in washington and trying to secure their holdings in the united states but i wonder if there is any little being going on on the part of western financial institutions because as i said they they they mount of money going out of russia into whether it is london or new york is is pretty substantial so i assume that business would also be damaged if russian money are no longer flowing in i haven't heard her the opposite which is that they were putting these persons on the. exposed persons

listen and hence to diligently i've been in touch with a number of bankers this week on a variety of matters and of course this was the scuffs on all those calls and i hadn't heard that but i suppose it would be a possibility given the financial interest that the banks have now i heard you say before that you believe that economic sanctions are an indispensable tool in the us foreign policy kid that they have proven their value time and time again and i think that would run counter to the conventional of popular opinion here in russia because none of the countries that have been subjected to you can sanctions have actually changed their policy if anything they grew more defined that applies to cuba that applies to north korea that applies to run and i think that may apply to russia as well so can you give an example of sanctions not only causing pain i'm sure they did that but actually succeeding in changing the policy of the country that has been subjected to that so two points on that i would note that sanctions

are a tool they are not a strategy increasingly in the u.s. we've been using sanctions as the strategy and that's the wrong approach we need to use it as part of a cool kid in support of diplomacy the second point i would make on that is i agree with you that sanctions are not that affected. against countries targeted sanctions against particular organizations and cities and individuals i have seen to be very effective because it's much harder for the entire world to turn away from a russia or an iran than it is for them to turn away from one individual so i don't agree with the efficacy of country wide sanctions programs like we've seen in the past but the targeted sanctions i have seen to be very effective well i think it's also a philosophical argument whether you influence people more by engagement or by ostracizing them and i think the american experience historically presents a much stronger case for economic engagement beat day in japan or let's say germany

of down the floors non-engagement but even if you believe that smart sanctions could be a factor if do you think the united states at this point of time is capable of smart policy whether it is under the chump administration or even more generally well i don't want to criticize any administration or how they're using sanctions well what i will say is that over the last several years both through the obama administration as well as a trump administration we've seen a lot of the institutional. knowledge and brainpower of the agencies involved in sanctions ministration leave for the private sector so there was a period of time where many of the architects for example the iran program were all there working together and they had years and years of sanctions experience and now they've all gone and so you have new players coming in and new officials that are looking at these issues so i think if there is been any kind of shift that we've

seen in recent years between both administrations i would say it's probably do more than that so that then any kind of broader policy decision in the way sanctions are implemented well i also heard you say that in recent periods but you can only following the events in the. american sanctions have become more narrow in scope they're often referred to as micro sanctions but also broader in application and i wonder how does it balance itself out does it make sense to use when there are sanctions but on a broader scale i think it does and here is why the whole idea of sanctions you have to look at it as you look at advice the idea is to pressure the targeted party to change certain behavior that they're engaged in and so if if you start with putting the most severe restriction on them at the beginning turning the device as tight as possible and they can survive that then they have no incentive to change

their behavior they're already surviving this spite of the pressure that's been applied but if you start the pressure off more slowly it gives you more room to ramp up saying sions and then increase that pressure to see if you can compel a change in the behavior absolutely but they hear it mr ferrari are making the case for microsite actions but the second part of my question was also about the over using a sanction mechanism as such because money is a persuasive argument but it's not the only one do you see any downsides to using trade in monetary restriction so often because i would think that it may also encourage not only an illicit trade in illicit money transfers but it would also be undermining the free trade system that the united states they used to care so much about absolutely that's absolutely correct and i've said many times i do think we're overusing sanctions i think a lot of sanctions experts would agree that we're overusing sanctions and this point about pushing people into alyssa networks to move money informal value

transfer systems is absolutely correct there was a statement several years ago that was made by then senior official of the u.s. government who said we've successfully pushed iran into the backwaters of the international financial system and the argument i made at the time is if you believe iran is engaged in all this. lissa conduct do you want them in the back waters of the international financial system again sanctions cut both ways and since i've made it a theme of this talk to bring up sayings there's an old saying that you don't want to cut off your nose to spite your face and sometimes sanctions do do that and there you should be more. mediated ok well mr ferrari unfortunately we have to leave it there but i really appreciate both your perspective and your time thank you for being with us today and charlie rose please keep the conversation going in our social media pages as for me i hope to see you again same place same time here on worlds apart.

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a double by. breaking news this hour two people are confirmed dead and around seventy injured in a train crash in the u.s. state of south carolina. a rebel group downs a russian fighter jets in the northwest of syria executes part of. revelations of a declassified memo playing the f.b.i. and u.s. justice department secured a warrant despondent twenty six the election campaign using a holiday dubious report. and sports crimes tribunal court overturns the last time by a russian athletes explaining the evidence used to prove. it was insufficient.