U.S. Makes Limited Exceptions to Sanctions on Russian Spy Agency

The U.S. Treasury Department on Thursday adjusted sanctions on Russian intelligence agency FSB, making limited exceptions to the measures put in place by former President Barack Obama over accusations Moscow tried to influence the U.S. presidential election with cyber attacks on political organizations.

The department said in a statement it would allow U.S. companies to make limited transactions with FSB that are needed to gain approval to import information technology products into Russia.

The Treasury Department often issues general licenses such as the one announced on Thursday to help U.S. companies overcome unintended business consequences of sanctions.

Sanctions experts and former Obama administration officials stressed that the new exceptions do not signal a broader shift in Russia policy. They say the general license issued Thursday is designed to fix a unintended consequence caused by last year's sanctioning of the spy agency.

Beyond its intelligence function, the FSB also regulates the importation of software and hardware that contains cryptography. Companies need FSB approval even to import broadly available commercial products like cell phones and printers if they contain encryption, sanctions experts say.

The exceptions made today were likely in progress before President Trump took office last month, said Peter Harrell, a sanctions expert and former senior State Department official.

Tech companies had been complaining about this collateral consequence since Obama placed sanctions on FSB in December, said Harrell.

"I don't think when they sanctioned FSB they were intending to complicate the sale of cell phones and tablets," Harrell said.

U.S. intelligence agencies accused the FSB of involvement in hacking of Democratic Party organizations during the election, won by Republican Donald Trump.

The agencies and private cyber security experts concluded the FSB first broke into the Democratic National Committee's computer system in the summer of 2015 and began monitoring email and chat conversations.

They said FSB was one of two Russian spy agencies believed to have been involved in a wide-ranging operation by top-ranking individuals in Russia's government to discredit Democrat Hillary Clinton and help Trump win the election.

In December, Obama ordered the expulsion of 35 Russian suspected spies and put sanctions on two Russian spy agencies. He also sanctioned four Russian intelligence officers and three companies that he said provided material support to Russian cyber operations.

Trump has said he wants better relations with Russian President Vladimir Putin.

(Reporting by Joel Schectman and Dustin Volz; additional reporting by Yeganeh Torbati and Jason Lange; Editing by Alistair Bell and Grant McCool)