Everything you wanted to know about State Sponsor of Terrorism status
1. Symbolic. Being designated one of the world's main players in terms of atrocities and terror, which the russian federation carries out against the civilian population.
2. Diplomatic. It implies a reduction in formal ties and joint programmes between the US and russia, increased diplomatic alienation for russia, and possibly a mutual reduction of diplomatic missions.
3. Sanctions and restrictions on transactions. It will be illegal for US individuals and legal entities to have any financial dealings with the russian government. This gives rise to the blocking of all state-owned banks and state-owned enterprises of the russian federation and people connected with the state.
It also entails tighter export control over a broader list of goods in trade between countries.
4. Secondary sanctions. The status itself constitutes grounds for the possible application of secondary sanctions to entities connected - by transactions, for example - with the State Sponsor of Terrorism and its agencies. In other words, this means that the US and its allies can impose sanctions, usually financial or trade sanctions, on any country that continues to cooperate with the country with the corresponding status. The grounds for such a decision will not be the existence of any threat to the US or the world order, but the fact that such country does not respect the sanctions on the State Sponsor of Terrorism.
For example, Indian banks do not have any dealings with sanctioned russian banks as they are afraid that they will receive secondary sanctions from the US for this.
5. The addition of russia to the Financial Action Task Force (FATF) blacklist. The FATF is an intergovernmental organisation that develops and implements measures and standards to combat money laundering at the international level.
Unlike the partial disconnection of russian banks from SWIFT, such a step will affect the banking system of the russian federation totally, not selectively. Being put on the FATF blacklist means the correspondent accounts of russian banks would be blocked around the world, including in China. And this is not just a restriction on the technology for transmitting financial messages: it is actually a "black mark" for the entire banking system.
That is, no financial transaction transfer technologies can be used. Chinese banks, for example, would have to terminate their correspondent relationships with russian banks if they wanted to keep their dollar- and euro-denominated correspondent accounts.
6. Judicial, executive, and sovereign immunity, or the real possibility of the russian federation being brought to justice in the courts of other countries.. Generally, the court of one country cannot issue a judgment against any other state; this is the basis of the international order.
However, the status of State Sponsor of Terrorism implies an exception to that state's jurisdictional immunity. In practice, this will allow US citizens, servicemen and officials (and only them) to claim and receive compensation in US courts for russia's actions in Ukraine (and possibly Syria), including through the forced seizure of russian state assets. For example, the family of an American citizen who was killed by the russian military in Ukraine will be able to go to court in the United States and obtain a judgment awarding compensation for this crime, and this money will be recoverable in the United States from russian assets.
About US£30 billion worth of russian assets in the USA (REPO estimate) are currently frozen, and our priority is to recover them for the reconstruction of Ukraine rather than as compensation for Americans pursuant to court judgments, and this is possible - more on this below.
