The sanctions were passed into law almost unanimously last year and was designed to punish Moscow’s alleged meddling in the 2016 US election.
But the legislation was signed reluctantly by Donald Trump, who wanted warmer ties with Moscow and had opposed the legislation as it worked its way through Congress.
In a statement released on Monday - the deadline for imposing the sanctions - State Department spokeswoman Heather Nauert, said: “Today, we have informed Congress that this legislation and its implementation are deterring Russian defence sales.
“Since the enactment of the ... legislation, we estimate that foreign governments have abandoned planned or announced purchases of several billion dollars in Russian defence acquisitions.”
Despite the purported reasoning behind the move, many commentators have questioned why the Trump administration would move to protect Russian interests at the expense of punishing them for alleged election interference.
The announcement came on the same day FBI Deputy Director Andrew McCabe, criticised by President Donald Trump and other Republicans for alleged bias against him and in favour of his 2016 Democratic opponent, Hillary Clinton, stepped down.
Under the measure, the administration can impose sanctions on anyone conducting significant business with Russian defence and intelligence sectors, already sanctioned for their alleged role in the election.
But citing long time frames associated with major defence deals, State Department spokeswoman Nauert said it was better to wait to impose those sanctions, reports Reuters.
“From that perspective, if the law is working, sanctions on specific entities or individuals will not need to be imposed because the legislation is, in fact, serving as a deterrent,” she said in a statement.
The measure, known as the “Countering America’s Adversaries Through Sanctions Act,” or CAATSA, required the administration to list “oligarchs” close to Putin’s government and issue a report detailing possible consequences of penalising Russia’s sovereign debt.
“The State Department claims that the mere threat of sanctions will deter Russia’s aggressive behaviour. How do you deter an attack that happened two years ago, and another that’s already underway? It just doesn’t make sense,” said Representative Eliot Engel, the top Democrat on the US House of Representatives Foreign Affairs Committee.
“I’m fed up waiting for this Administration to protect our country and our elections,” he said in a statement.
Members of Congress, including Democrats and some of Trump’s fellow Republicans, have been clamouring for his administration to use sanctions to punish Moscow for past election interference and prevent future meddling in US polls.
CIA Director Mike Pompeo said he expects Russia will target US mid-term elections later this year as part of the Kremlin’s attempt to influence domestic politics across the West.
In an interview with the BBC, Pompeo also said that North Korea might have the ability to strike the United States with nuclear missiles “in a handful of months”.
He said the threat from Russia would not go away and asked if Russia would try to influence the mid-term elections later this year, he said: “Of course. I have every expectation that they will continue to try and do that.”
“But I am confident that America will be able to have a free and fair election. That we’ll push back in a way that is sufficiently robust that the impact they have on our election won’t be great.”
Pompeo also said China was trying to steal U.S. information.
Several US congressional committees, as well as Special Counsel Robert Mueller, are investigating whether Russia tried to tilt last November’s election in Trump’s favour, using means such as hacking into the emails of senior Democrats and promoting divisive social and political messages online. Trump and the Kremlin have separately denied any collusion.
Senator Bob Corker, the Republican chairman of the Senate Foreign Relations Committee, one of the main congressional architects of the sanctions law, said he was not concerned that the administration did not announce sanctions by Monday’s deadline.
“This is when sanctions season begins, and so they’ll be rolling them out,” he told reporters.
“We feel pretty good about the process,” Corker said. “They’re rushing the information over to us today, and by the close of business, they’re going to have two of the three, as I understand it. So they’re taking it very seriously.”