U.S. and Allies Slap First Tranche of Sanctions on Russia

The U.S. and its allies on Tuesday announced a range of sanctions against Russia for what the White House called “the beginning of an invasion of Ukraine”, TURAN’s Washington correspondent reports.

“Who in the Lord’s name does Putin think gives him the right to declare new so-called countries on territory that belongs to his neighbors?,” President Joe Biden said when addressing the situation in Ukraine with a speech at the White House, outlining both the interpretation that Russia had invaded its neighbor and could very well go further in the coming days.

“We announced our first tranche of sanctions in less than a day with Allies and partners from the European Union, from the United Kingdom, Canada, Japan, and Australia” a Senior Biden Administration Official told reporters, calling the measures “swift and historic”, as they are supposed to limit Russia’s access to the global financial system.

Biden has directed the following measures, per White House Fact Sheet:

* Full blocking sanctions on two significant Russian financial institutions. The Secretary of the Treasury will impose full blocking sanctions on two large state-owned Russian financial institutions that provide key services crucial to financing the Kremlin and the Russian military: Vnesheconombank and Promsvyazbank and their subsidiaries. Collectively, these institutions hold more than $80 billion in assets and finance the Russian defense sector and economic development. These measures will freeze their assets in the United States, prohibit U.S. individuals and businesses from doing any transactions with them, shut them out of the global financial system, and foreclose access to the U.S. dollar.

* Expanded sovereign debt prohibitions restricting U.S. individuals and firms from participation in secondary markets for new debt issued by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.  These prohibitions will cut off the Russian government from a key avenue by which it raises capital to fund its priorities and will increase future financing costs. It denies Russia access to key U.S. markets and investors.

* Full blocking sanctions on five Russian elites and their family members: Aleksandr Bortnikov (and his son, Denis), Sergei Kiriyenko (and his son, Vladimir), and Promsvyazbank CEO Petr Fradkov. These individuals and their relatives directly benefit from their connections with the Kremlin. Other Russian elites and their family members are on notice that additional actions could be taken against them.

* Today, the Secretary of the Treasury will determine that any institution in the financial services sector of the Russian Federation economy is a target for further sanctions. Over 80% of Russia’s daily foreign exchange transactions globally are in U.S. dollars and roughly half of Russia’s international trade is conducted in dollars. With this action, no Russian financial institution is safe from our measures, including the largest banks.

Biden on Tuesday also announced that he would send additional U.S. troops to Germany, Poland and Romania, where at least 6,000 American forces have been deployed in recent weeks to bolster the eastern flank members of NATO.

"If Putin escalates further, we will escalate further using financial sanctions and export controls, which we've yet to unveil but which are fully prepared to implement with Allies and partners across the world," White House Deputy National Security Advisor for International Economics Daleep Singh told reporters.

Alex Raufoglu

Washington D.C.