LONDON (Financial Times) - A week after President Donald Trump grudgingly approved fresh U.S. sanctions against Russia, domestic companies and foreign investors are struggling to make sense of their exact consequences — but they already see enough to fear the longer-term chilling effect on an economy starting to recover after two years of recession.
 Even those sceptical of the sanctions’ true reach are concerned by the threat as guarded investors reassess their exposure to Russia. "This is another political move intended to poison the atmosphere of revival that has been spreading here,” said a senior executive at a Russian mining and metals group, who warned of slower growth even while insisting that the sanctions were "unenforceable and pure fantasy”.
 Growth reached an annual rate of 2.5 per cent in the second quarter, the fastest in almost five years. "The recovery is definitely taking place, and the background is that the economy has adjusted to the lower oil price and the sanctions imposed in 2014,” said Chris Weafer, a senior partner at Macro Advisory, a Moscow-based consultancy. "This year and next, the new sanctions should not throw the recovery off track. But to keep going, growth needs much higher levels of inward investment, and the new sanctions regime puts that at a severe risk.”
Last year Russia received $12.9bn in foreign direct investment, making it the third-largest recipient of FDI in Europe after the UK and France, according to fDi Intelligence. Russian companies had also stepped up domestic investment, attracted by industrial policy incentives and a weak rouble that increased their competitiveness.
Fixed asset investment started growing year on year in April after shrinking for more than three years. Financial investors had also started viewing Russia more favorably.
 By mid-2015, a year after the 2014 sanctions, "risk managers in western banks took the view that the situation had stabilized and legal risks had come down sufficiently”, said Christopher Granville, a managing director at TS Lombard, pointing to funds raised by companies including Norilsk Nickel, Metalloinvest and Evraz.
Many corporate executives were further soothed by what appeared to be the Trump administration’s friendlier approach towards companies doing business in Russia. While the Obama administration leaned on U.S. companies to stay away from Russia’s biggest economic conference in St Petersburg and discouraged U.S. banks from dealing in Russian government bonds, such moves stopped under Mr Trump.
 That sense of comfort is now gone. The new U.S. law tightens restrictions on lending to certain state banks and energy companies, expands energy sanctions and bars the president from relaxing sanctions without approval from Congress.
It requires sanctions against those who participate in corrupt privatization projects, and those involved in undermining cyber security. Beyond that, the law authorizes the Trump administration to impose a range of additional sanctions: against companies involved in pipeline development in Russia, and against state companies in rail, metals and mining.
The U.S. treasury is also required to report early next year what impact it expects were it to apply sanctions to Russian government debt. "The law has got a lot of threats hanging in the air,” said Alexis Rodzianko, president and chief executive of the American Chamber of Commerce in Moscow.
"This administration isn’t going to act on the authorizations or enforce existing sanctions,” said Richard Nephew, a fellow at the School of International and Public Affairs at Columbia University who worked on sanctions policy in the state department until 2015.
According to the Russian Central Bank, non-residents held 30.7 per cent of total federal government debt as of June 1 — up from only 3.7 per cent in January 2012. The proportion is above 50 per cent in bonds issued last year and this year, and even higher — more than 70 per cent — in bonds with a maturity above seven years, according to Standard & Poor’s. "This is driven by the very high interest rate differential between the Russian Federation and the rest of the world,” said Karen Vartapetov, director at S&P Global Ratings.