President Joe Biden is heading to the G7 summit in Italy with over 300 new sanctions aimed at further isolating and financially weakening Russia. These measures are in line with G7 commitments to intensify the pressure on Russia and are designed to limit the Kremlin’s revenues and impede Moscow’s ability to source materials for its war in Ukraine. The sanctions target foreign financial institutions supporting Russia’s war, restrict Russia’s access to certain US software and information technology services, and focus on individuals and entities enabling Russia to sustain its war effort and evade sanctions.
The US and its western allies have imposed a series of sanctions against Russia in recent years, but the country has managed to withstand them. Russian President Vladimir Putin has even boasted about Russia’s resilience to international sanctions, which typically take time to have an impact. Treasury Secretary Janet Yellen stated that the latest actions aim to disrupt Russia’s remaining avenues for international materials and equipment and diminish its ability to benefit from foreign technology, equipment, software, and IT services.
Among the new measures is the authorization for Treasury to impose sanctions on foreign financial institutions aiding Russia’s military-industrial base, threatening sanctions on any institution doing business with previously sanctioned individuals or entities, including Sberbank and VTB bank. This move acknowledges that Russia cannot build its weapons alone and needs parts and goods from other countries and companies outside of Russia. Expanding the secondary sanctions regime will make it more challenging for Russia to access necessary goods from third countries.
In addition to targeting financial institutions, the latest sanctions will expand existing restrictions on the sale of semiconductors to Russia, broadening economic penalties to countries utilizing US technologies to produce computer chips. This includes measures aimed at China, which has played a significant role in filling gaps in Russia’s industrial base and circumventing existing sanctions. The sanctions deployed on Wednesday could impact nearly $100 million worth of high-priority items, including semiconductors, produced using US technology, software, and intellectual property.
Another key aspect of the new sanctions is targeting Russia’s attempts to bypass sanctions through networks that employ complex schemes to move money and assets. Over 90 individuals and entities engaging in such activities in various countries, including Russia, Belarus, China, and the United Arab Emirates, will be designated. By cracking down on these evasion tactics, the US aims to further restrict Russia’s ability to maneuver market forces and effectively counteract any efforts to undermine the impact of sanctions.
Overall, the latest sanctions represent a comprehensive effort to pressure Russia economically and strategically, making it more difficult for the country to access critical resources or circumvent existing restrictions. By systematically broadening the scope of targeted entities and activities, the US aims to weaken Russia’s war economy and reduce its ability to sustain its military efforts in Ukraine. These actions, taken in coordination with G7 allies, highlight a united front against Russia’s aggression and reinforce the consequences of its actions in the global arena.
