“THE American president joe biden will sign an executive order today that would allow Washington to impose sanctions on financial institutions that help Russia circumvent Western sanctions over its invasion of Ukraine.” US Treasury Secretary Janet Yellen said.
“This order, which is part of a broader US effort to deal with sanctions circumvention, also gives Washington the ability to ban imports of products that are produced in third countries but made from Russian raw materials, such as diamonds “, Helen explained.
“Today we are taking steps to use new and powerful tools against Russia’s war machine.” commented the US Treasury Secretary. “And we will not hesitate to use these new tools to take decisive and surgical action against financial institutions that facilitate the financing of the Russian war machine,” he added.
The US and its allies, including the EU and Britain, imposed sanctions on Russia after its invasion of Ukraine in February 2022 and have since stepped up pressure on Moscow, targeting President Vladimir Putin, the Russian financial sector and dozens of oligarchs.
Today’s order is issued in consultation with US partners.
Washington has repeatedly warned companies against circumventing US sanctions against Russia and has targeted companies in the United Arab Emirates, Turkey and elsewhere that it has accused of helping Moscow evade sanctions.
Sanctions and economy
The new executive order, which takes effect immediately after being signed by Biden, will allow the US Treasury Department to acquire the tools to target networks that Moscow is trying to create to circumvent sanctions.
We appreciate that (…) financial institutions will take steps to stop these behaviors before we are forced to use this new mechanism, said a senior US official who spoke to reporters on Thursday on condition of anonymity.
Ultimately, any bank in the world that has a choice between continuing to sell a small amount of products to the Russian military-industrial complex or being tied to the American financial system will choose to remain tied to the American financial system, he estimated.
At the same time, he explained that most European and American banks have already stopped financing activities in Russia, but revealed that they have relationships with financial institutions of other countries, which may still have activities there.
Washington therefore expects Western banks to pressure their partners in third countries to break their economic relations with Russia.
Another senior US official pointed out that the initial sanctions and export controls imposed by the US on Russia have paid off, with the Russian economy shrinking by 5% from pre-war forecasts.
Yet nearly two years after the start of the war, the Russian economy appears to be weathering the shock, despite an avalanche of sanctions.
Moscow still sells hydrocarbons, mainly to China and India, and experts say it has created effective mechanisms to successfully bypass the cap the West has placed on its oil sales.
Besides, Washington estimates that Moscow has strengthened its military cooperation with Iran, which supplies it with drones, and also with North Korea.
Based on International Monetary Fund estimates, Russia is set to record growth of just over 2% this year and just over 1% in 2024.
Source: News Beast
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