Timothy Gardner and Andrea Shalal

WASHINGTON, (Reuters) – The U.S. President Joe Biden threatened to impose severe sanctions against Russia if Vladimir Putin invades Ukraine. But some large companies and business organizations are urging the White House to remain cautious and caution lawmakers.

A trade group representing Chevron (NYSE:), General Electric (NYSE:), and the other major U.S. businesses that do business with Russia, are asking for the White House’s consideration of allowing Russian corporations to fulfil their obligations and to assess exempting products while it formulates any sanctions. Big energy firms are also pushing Congress for a shorter timeframe and a more limited scope.

The Congress and the Biden administration need to get the details correct in order for them to follow through with the threat of sanction,” Jake Colvin (president of The National Foreign Trade Council) told Reuters Monday.

Colvin explained that these details must include safe harbors, wind-downs periods for companies in order to be able to fulfil existing contracts and obligations. Colvin also mentioned carve outs for humanitarian reasons and lifesaving drugs consistent with U.S. long-standing policy.

According to Reuters, energy companies also reached out to U.S. legislators to request a cooling-off or wind down period to ensure their assets do not get seized if Russia does not fulfill any of their business contracts.

American Petroleum Institute is the most powerful lobbying group for U.S. oil and gas drillers. It has met with Congress to discuss sanctions against Russia. A spokesperson for API stated, “Sanctions must be as specific as possible to limit the potential harm to U.S. competitiveness.”

Export sanctions are generally phased in so that companies have time to shut down existing businesses or guarantee delivery arrivals.

He said that in this instance, sanctions will likely be applied abruptly, during a crisis. This makes it more difficult for a “winddown” period to be secured.

The U.S. Treasury in the past has provided some mitigation measures on financial sanctions, such as granting licenses https://www.reuters.com/world/asia-pacific/us-formalizes-guidance-allowing-personal-remittances-flow-afghanistan-2021-12-10 protecting senders of humanitarian aid and personal remittance flows to Afghanistan despite sanctions against the ruling Taliban.

An official from the U.S. Treasury declined to discuss any potential sanctions against Russia but said that they were ready to pay severe economic costs while minimising unwanted spillover.

LEGAL STATUS CRIMEA SANCTIONS

After Putin’s invasion of Crimea, 2014, oil companies have felt the effects of sanctions imposed by the United States on Russia’s higher-priced drilling operations.

They were forced to take certain measures Exxon Mobil (NYSE:) Out of Russia’s Arctic. The company ended its collaboration with Rosneft Russian state oil company, which in 2011 signed a $3.2billion deal to develop the area.

Exxon claimed that sanctions, which slow down work on major discoveries in Kara Sea, above the Arctic Circle in North America, unfairly penalized U.S. businesses while allowing foreign firms to operate in this country, the biggest oil producer in the world.

Russia’s hi-tech exploration oil & gas projects in Siberia shale, deep sea and the Arctic were the hardest hit by the 2014 sanctions.

The possibility of new sanctions being more severe, yet still manageable without causing damage to Western businesses, is possible.

Reinsch indicated that companies could avoid legal liability for violations of sanctions if they meet certain conditions, including showing that the shipment arrived in sanctioned countries without authorisation, possibly from a third party.

Exxon didn’t immediately reply to our request for comment on any lobbying that it might be doing regarding the possible Russia sanctions.

Un spokesman from the U.S. Chamber of Commerce (the largest lobbying group in America for American business) declined comment.

According to U.S. Trade Representative, the total U.S. trade in goods and services with Russia was $34.9 billion in 2019.