US Expands Sanctions in Effort to Choke Russian War Economy

The United States announced a wave of new sanctions against Russia the day before G7 leaders were set to gather in Italy to discuss ways to curb Russia’s growing war economy amid its ongoing campaign in Ukraine.

Sanctions on more than 300 Russian entities and individuals were announced by the U.S. Treasury Department on June 12. The measures “will ratchet up the risks that foreign financial institutions take by dealing with Russia’s war economy,” said National Security Advisor Jake Sullivan.

Speaking with reporters on Air Force One, he also announced that the Treasury “is making clear that foreign banks risk being sanctioned for dealing with any entity or individual blocked under our Russia sanctions, including designated Russian banks.”

On top of that, the Treasury and Department of Commerce would be issuing “complementary prohibitions” targeting Russia’s ability to access certain U.S. software or IT services, and the Department of Commerce would be announcing steps to more aggressively target shipments of U.S.-branded items regardless of where those items are produced.

“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment software, and IT services,” U.S. Treasury Secretary Janet Yellen said in a statement.

More than two dozen of the 300 newly-sanctioned entities and individuals are from China, as is the already-sanctioned Russian Financial Infrastructure, and an array of third parties that focus on a variety of industries from micro-technologies and transportation to mining and energy revenue.

Mr. Sullivan also said the United States was targeting more Russian elites, including those accused of being involved in the deportation and re-education of Ukrainian children.

“Altogether, these actions heighten the risk for financial institutions dealing with Russia’s war economy, closed down avenues for evasion while diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” he said.

Shortly after this announcement, the Moscow Exchange announced that it would suspend transactions in dollars and euros.

The United States has sanctioned more than 4,000 Russian businesses and individuals since Russia invaded Ukraine, according to the Associated Press. Yet, Russian forces continue to endure on the battlefield.

One of the growing concerns for its endurance is communist China’s decision to work with Russia to develop and supply dual-use technologies over the last six to eight months.

“China is working to develop its own form of multilateralism while deepening its relationship with Russia and Iran in particular,” Director of National Intelligence Avril Haines said during a May 2 Senate Armed Services Committee hearing.

“China’s provision of dual-use components and material to Russia’s defense industry is one of several factors that tilted the momentum on the battlefield in Ukraine in Moscow’s favor, while also accelerating a reconstitution of Russia’s military strength after their extraordinarily costly invasion.”

The Department of State noted in a statement that imports from China “are filling critical gaps in Russia’s defense production cycle to produce weapons, ramp up defense production, and bolster its military-industrial base.”

Mr. Sullivan said that the administration has made it clear to China’s communist regime that it reserves the right to take action against particular companies believed to be supporting Russia’s war machine and that “we have put our money where our mouth is.”

He also said that their focus goes beyond China.

“We’re not only focused on China,” he said. “We’re focused on the broad network of entities and individuals working to try to circumvent sanctions and get these inputs to Russia.”

The 50th G7 Summit is set in southern Italy from June 13–15 and will include the leaders of the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada.

Andrew Thornebrooke, Emel Akan, Reuters, and The Associated Press contributed to this report. 

From The Epoch Times