Washington announces sanctions against Moscow
The United States responds to Russia's attack on Ukraine. The US Treasury is imposing sanctions on a specific group of Russian institutions and ordering all US banks to close any accounts they have with these entities. The deadline given by the department to do so is one month.
The Department has published a statement on its website that lists the organisations to be sanctioned. The 10 largest Russian financial institutions and some 90 affiliated institutions, as well as a number of vital companies, are on the list.
OFAC Secretary Janet L. Yellen announced that "serious and unprecedented steps are being taken to generate swift and severe consequences for the Kremlin and significantly impair its ability to use the Russian economy and financial system to further its malign activity".
The application of these penalties entails Russia's lack of access to the global financial system. In addition, they target almost 80 % of Russia's banking assets, which will have a long-term impact on the Russian economy. The sanctions target Sberbank, VTB and the Russian Agricultural Bank, among others.
Sberbank holds about a third of all Russian assets. "Within the next thirty days, all US financial institutions will be required to close all correspondent accounts [...] and refuse any future transactions" involving this entity.
OFAC, in turn, has imposed blanket prohibition sanctions on VTB Bank, Russia's second largest financial institution, which holds almost 20 % of Russia's banking assets. In addition to banking institutions, companies such as Russian Railways are also subject to this ordinance.
Several oligarchs and people close to Vladimir Putin will also be subject to US punishment. Among them is Sergey S. Ivanov, son of a member of the Russian Security Council and president of Alrosa. Alrosa is the world's largest state-owned diamond mining company and is responsible for 90 % of the world's diamond mining capacity.
US President Joe Biden declared that this was a premeditated attack. "The Russian ruler rejected the West's attempts to engage in dialogue and violate international law. Putin is the aggressor. Putin chose this war. Now he and his country will have to face the consequences".
He added that Russia's ability to do business in dollars, euros, pounds and yen will be limited. For the time being, Russia will not be withdrawn from the Society for Worldwide Interbank Financial Telecommunication (SWIFT). SWIFT is a financial system for managing international banking transactions.
Some European leaders are reluctant to take this step as it would have a major impact not only on the global economy, but also on the financial system of those countries that maintain economic relations with the Russian nation. This option does not come as a surprise to Putin, as it was considered in 2014 after the annexation of the Crimean peninsula.
Russia's defence, aerospace and maritime sectors are also included in the US sanctions package. The Kremlin's strategic ambitions will be dealt a blow as it will minimise purchases of high-tech items that would allow it to grow militarily.
Biden has repeatedly stated that the US will not go to war with Russia. "Our troops are not going to Europe to fight in Ukraine, but to defend our NATO allies and reassure those allies in the east," he said. At the same time, he said he was prepared in case of any cyber attacks on his companies and infrastructure.
The Russian president held a meeting with the president of the Russian Federation of Industrialists and Entrepreneurs and added that his government is preparing for the current situation and is analysing the risks. Washington, along with its allies, is prepared to initiate a wave of sanctions against Moscow.
For its part, Britain has introduced new measures targeting banks and members of Putin's inner circle. UK Prime Minister Boris Johnson said leaders are prepared to work together to "maximise the economic price" to be paid by the Russian leader.
Volodimir Zelenski, Ukraine's president, believes they have been left alone to defend their territory. Despite this, Biden has pledged to provide them with humanitarian aid in order to "alleviate their suffering". At the moment, more than 100,000 Ukrainians have been displaced and the UN estimates that the conflict will result in between one and five million refugees.
Americas Coordinator: José Antonio Sierra
