In this article, we will discuss the new sanctions imposed by the Biden administration on companies dealing with the Russian military sector. We will also cover stricter rules for banks dealing with Russia, but without seizing the frozen Russian assets. Russian authorities are threatening to sever diplomatic relations with the United States and Europe due to this move.
Key Facts
The new sanctions target Russian companies that manufacture goods abroad to circumvent previous sanctions. The order targets more than 150 entities and 100 individuals named by the Group of Seven (G7) wealthy nations last week, including producers of semiconductor chips, aircraft parts manufacturers, and agents supplying weapons and technology from Chinese companies. Targeted companies dealing with Russia include firms from Turkey, the United Arab Emirates, China, Singapore, Switzerland, Kyrgyzstan, Tajikistan, and the Maldives.
Main Impact
The new executive order will grant the government the authority to impose additional sanctions on banks that deal with front companies – whether they are aware of their Russian origins or not. Treasury Secretary Janet Yellen stated that she expects international banks and other financial institutions to make every effort to ensure they do not facilitate evasion and tax avoidance.
Background
The new sanctions come at a time when Congress is struggling to pass an aid bill for Ukraine to fund the ongoing war against Russia, a defensive war that has lasted nearly two years. Support for the embattled Eastern European state is drying up as House Republicans seek to link it to additional funding for border security. Meanwhile, the United States has indicated to its allies that it may be willing to send $300 billion in emergency funds to Ukraine by seizing Russian assets already frozen in foreign accounts targeted by previous sanctions, according to a New York Times report on Thursday. Treasury Secretary Janet Yellen previously rejected this idea, describing it as “not something legally permissible.” There are about $5 billion in frozen Russian assets in U.S. financial institutions – but officials are reportedly negotiating with diplomats in Europe, Canada, and Japan to access another $295 billion in frozen Russian funds.
Recent Developments
On Friday, Russian Foreign Minister Sergei Ryabkov stated that the country was ready to sever diplomatic relations with the United States if any Russian assets were sent to Ukraine, according to Reuters, which cited the Russian news agency Interfax. Kremlin spokesperson Dmitry Peskov also issued a sharp warning against asset seizures, emphasizing that “Russia will not leave those who do this alone,” according to a Guardian report.
For more information, you can check out the following articles:
– “Russian billionaire Roman Abramovich fails to undermine European war sanctions” by Robert Hart
– “Sanctions Reporting Program: A little-known tool for employees added to the Department of Justice’s anti-Russia arsenal” by Robert Anello
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