US widens Russia sanctions in banking crackdown
The United States has intensified its sanctions against Russia, including new measures targeting banks that engage with sanctioned entities.
This builds upon a program initiated in December to sanction foreign banks supporting Russia’s actions in Ukraine.
Additionally, the US has imposed sanctions on the Moscow stock exchange, ceasing trading in dollars and euros, and has taken steps to limit Russia’s access to technology such as chips and software.
In December, President Joe Biden signed an executive order imposing sanctions on banks involved with approximately 1,200 individuals and companies aiding Russia’s military operations. These sanctions, which risk exclusion from the US financial system, now encompass around 4,500 entities.
Furthermore, the US plans to combat gold laundering activities. Peter Harrell, a former White House senior director for international economics, indicated to Reuters that these actions suggest a move towards establishing a global financial embargo against Russia.
As part of this effort, the US Treasury announced that it would impose sanctions on parts of Russia’s financial system, including the Moscow Exchange, which is one of Russia’s main stock exchanges.
The stock exchange, Russia’s largest foreign exchange market, then said the sanctions had forced it to stop trading in dollars and euros.
The US also focused on technology in its expanded sanctions program.
Chips and other tech made in the US have been found in downed Russian equipment on Ukraine battlefields, including drones, radios, missiles, and armored vehicles.
The sanctions aim to make it more difficult for companies to supply that tech.
The US will target shell firms in Hong Kong selling chips to Russia.
In addition, software and IT services will also be restricted for sanctioned entities, although the US said its actions “are not intended to disrupt civil society and civil telecommunications”.
Despite the wave of sanctions brought against Russia since its full-scale invasion of Ukraine in February 2022, the International Monetary Fund predicts that the country will record economic growth of 3.2% this year.
But analysts say sanctions will eventually make it harder for Moscow to wage its war, and overtime weaken Russia’s economy.
“Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world,” said Treasury Secretary Janet Yellen.
“Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries,” she added.
The sanctions were imposed as Mr Biden prepared for a G7 summit in southern Italy with the leaders of Britain, Canada, France, Germany, Italy, and Japan.
One of the G7 leaders’ priorities is boosting support for Ukraine, which is now into its third year of resisting Russia’s invasion.
