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Topline
The Biden Administration rolled out another round of sanctions targeting Russia’s military-industrial complex Friday and said it will place banks doing business with Russia under stricter rules, but stopped short of seizing frozen Russian assets—a move Russian officials threatened to break diplomatic ties with the U.S. and Europe over.
Russia is facing new sanctions targeting companies that process its goods overseas to circumvent … [+]
Key Facts
The new sanctions target the “cutouts and front companies” located overseas that the White House says Russia is using to circumvent previous sanctions and fund their war effort in Ukraine.
The order targets over 150 entities and 100 individuals named by the Group of 7 wealthy nations last week, including semiconductor microchip producers, aircraft part manufacturers, and agents procuring weapons and technology from Chinese firms.
A list of targeted companies doing business with Russia included firms from Turkey, the United Arab Emirates, China, Singapore, Switzerland, Kyrgyzstan, Tajikistan and the Maldives.
Biden’s new executive order will also give the government authority to further sanction banks that conduct business with the front companies—whether they were aware of its origin in Russia or not—and Treasury Secretary Janet Yellen said she expected international banks and other financial institutions to “undertake every effort to ensure that they are not witting or unwitting facilitators of circumvention and evasion.”
The executive order also banned imports from Russia’s diamond industry and seafood fisheries—both of which export goods for processing in third-party nations, which are then processed and sold in the west.
The executive order stopped short of seizing Russian assets frozen in U.S. or European accounts—an idea recently pitched by some American officials to provide military funding for Ukraine.
Key Background
The new round of sanctions come as Congress struggles to pass a Ukraine aid bill to fund the country’s ongoing war against Russia, a defensive war that has lasted almost two years. Aid for the beleaguered Eastern European state has largely dried up as Republicans in the House seek to tie it to additional funding for border security. Meanwhile, the U.S. has signaled to its allies that it might be willing to send $300 billion in emergency funds to Ukraine by seizing Russian assets already frozen in overseas accounts targeted by previous sanctions, the New York Times reported on Thursday. Treasury Secretary Janet Yellen previously dismissed the idea, calling it “not something that is legally permissible.” About $5 billion in Russian assets are frozen in American financial institutions—but officials are reportedly negotiating with diplomats in Europe, Canada and Japan in order to access another $295 billion in frozen Russian funds.
News Peg
On Friday, Russian Foreign Minister Sergei Ryabkov said the nation was prepared to break off diplomatic ties with the United States if any Russian assets were sent to Ukraine, Reuters reported, citing Russian news service Interfax. Kremlin spokesperson Dmitry Peskov also issued a stark warning against the asset seizures, stating “Russia will never leave those who do it alone,” the Guardian reported.
Further Reading
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