Treasury expands sanctions threat against banks dealing with Russia
The sweeping new package of sanctions and export controls comes as President Joe Biden heads to the G7 meetings in Italy where leaders are poised to discuss ways to ratchet up pressure on Russia and boost support for Ukraine.
The Biden administration on Wednesday rolled out a fresh round of sanctions targeting Russia, including a major escalation of its efforts to go after foreign banks that are helping to finance the country’s war effort.
The sweeping new package of sanctions and export controls comes as President Joe Biden heads to the G7 meetings in Italy where leaders are poised to discuss ways to ratchet up pressure on Russia and boost support for Ukraine.
The Treasury Department said it was expanding the scope of its crackdown on foreign financial institutions that do business in Russia.
In December, Biden signed an executive order that threatened banks with sanctions if they facilitated transactions to about 1,200 entities in Russia’s military industrial base. The Treasury Department said foreign banks will now risk U.S. sanctions for working with more than 4,500 sanctioned entities.
The department said it was widening the policy to cover any foreign bank institution that does business with any sanctioned Russian entity. That includes some of Russia’s largest lenders and financial institutions as well as their outposts in places like China, India and Hong Kong.
Officials said the new actions, which also target Russia’s financial markets and exchanges, were aimed at curtailing the flow of money and investment into the country.
“Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world,” Treasury Secretary Janet Yellen said in a statement. “Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries.”
The Commerce Department on Wednesday also announced it is widening its use of export controls against entities that help Russia survive economically amid its war effort against Ukraine.
The department’s Bureau of Industry and Security announced new measures to crack down on shell companies that divert sanctioned goods to Russia and restrict exports of software used by the Russian and Belarusian military. BIS also announced new export restrictions for Russia and Belarus on more than 500 additional items and added five entities in Russia and China to a restricted U.S. trade list.
“To further impair Russia’s diversion efforts, BIS will more extensively target foreign companies who supply U.S.-branded products to Russia through Entity List additions and other related actions,” BIS said in a press release.
Ari Hawkins contributed to this report.