In response to Russia’s war against Ukraine, the United States, along with Allies and partners, is imposing severe economic sanctions on Russia that will hamper its ability to do business in foreign currencies. President Biden promised to inflict a “severe cost on the Russian economy”.
The United States carried out the following actions include:
- Severing the connection to the US financial system for Russia’s largest financial institution, Sberbank, including 25 subsidiaries, by imposing correspondent and payable-through account sanctions. This action will restrict Sberbank’s access to transactions made in the dollar. Sberbank is the largest bank in Russia, holds nearly one-third of the overall Russian banking sector’s assets, is heavily connected to the global financial system, and is systemically critical to the Russian financial system.
- Full blocking sanctions on Russia’s second largest financial institution, VTB Bank (VTB), including 20 subsidiaries. This action will freeze any of VTB’s assets touching the US financial system and prohibit US persons from dealing with them. VTB holds nearly one-fifth of the overall Russian banking sector’s assets, is heavily exposed to the US and western financial systems and is systemically critical to the Russian financial system.
- Full blocking sanctions on three other major Russian financial institutions: Bank Otkritie, Sovcombank OJSC, and Novikombank- and 34 subsidiaries. These sanctions freeze any of these institutions’ assets touching the U.S financial system and prohibit US persons from dealing with them.
- New debt and equity restrictions on thirteen of the most critical major Russian enterprises and entities. This includes restrictions on all transactions in, provision of financing for, and other dealings in new debt of greater than 14 days maturity and new equity issued by thirteen Russian state-owned enterprises and entities: Sberbank, AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways. These entities, including companies critical to the Russian economy with estimated assets of nearly $1.4 trillion, will not be able to raise money through the US market.
- Additional full blocking sanctions on Russian elites and their family members: Sergei Ivanov (and his son, Sergei), Andrey Patrushev (and his son Nikolai), Igor Sechin (and his son Ivan), Andrey Puchkov, Yuriy Solviev (and two real estate companies he owns), Galina Ulyutina, and Alexander Vedyakhin. This action includes individuals who have enriched themselves at the expense of the Russian state, and have elevated their family members into some of the highest position of powers in the country. It also includes financial figures who sit atop Russia’s largest financial institutions.
- Costs on Belarus for supporting a further invasion of Ukraine by sanctioning 24 Belarusian individuals and entities, including targeting Belarus’ military and financial capabilities by sanctioning two significant Belarusian state-owned banks, nine defense firms, and seven regime-connected official and elites.
- Sweeping restrictions on Russia’s military to strike a blow to Putin’s military and strategic ambitions. This includes measures against military end users, including the Russian Ministry of Defense. Exports of nearly all US items and items produced in foreign countries using certain US origin software, technology, or equipment will be restricted to targeted military end users. These comprehensive restrictions apply to the Russian Ministry of Defense, including the Armed Forces of Russia, wherever located.
- Russia-wide restrictions to choke off Russia’s import of technological goods critical to a diversified economy and Putin’s ability to project power. This includes Russia-wide denial of exports of sensitive technology, primarily targeting the Russian defense, aviation, and maritime sectors to cut off Russia’s access to cutting-edge technology. In addition to sweeping restrictions on the Russian-defense sector, the United States government will impose Russia-wide restrictions on sensitive US technologies produced in foreign countries using US-origin software, technology, or equipment. This includes Russia-wide restrictions on semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics and maritime technologies.
- Multilateral cooperation that serves as a force multiplier in restricting more than $50 billion in key inputs to Russia- impacting far more than that in Russia’s production. As a result of this multilateral coordination, we will provide an exemption for other countries that adopt equally stringent measures. Countries that adopt substantially similar export restrictions are exempted from new US licensing requirements for items produced in their countries. The European Union, Australia, Japan, Canada, New Zealand and the United Kingdom, have already communicated their plans for parallel actions. This unprecedented coordination significantly expands the scope of restrictions on Russia.