Biden’s sanctions plan targets Russian banks, businesses and imports if Ukraine is attacked

Date:

Washington — The Biden administration has finalized the barrage of economic sanctions on Russia When attacking Ukraine— The strategy is facing obstacles that have hampered previous pressure campaigns, but is hitting major Russian banks, state-owned enterprises and major imports.

Government officials said the planned actions were unmatched in recent decades against Russia, and President Biden’s Threats to apply fines and other sanctions In the case of Russian assault.

President Biden said Wednesday that the United States is ready to lift sanctions on Russia if President Vladimir Putin moves against Ukraine. Biden also presented a possible diplomatic solution.Photo: Susan Walsh / Associated Press

No final decision has been made, but officials have said Potential targets include: Some of Russia’s largest government-owned banks, including:

VTB Bank,

All trade bans on the new issue of Russia’s sovereign debt and the application of export controls across major sectors such as advanced microelectronics.

Russian President Vladimir Putin (left) met with VTB Bank President and Chairman Andrey Kostin last November in the Moscow Kremlin.


Photo:

Mikhail Metsel / Zuma Press

Past US efforts to bet on economic warcraft have produced a variety of results. For example, Iran and North Korea have taken the time to adapt to a widespread economic embargo on nuclear weapons programs, although not without continuing to hurt the economy and the people. After Russia invaded Ukraine in 2014, the Obama administration tracked energy technology exports, sovereign debt, and some government-owned banks and businesses, but these sanctions are narrow and serious. There was no damage.

Russia Better prepared now, Foreign exchange reserves are deepening, dependence on foreign debt is decreasing, economic growth is accelerating, and the price of oil, the country’s main source of income, is rising. Russia’s role as the largest exporter of oil and gas and its economic integration with Europe previously discouraged the United States from applying widespread sanctions, fearing it would disrupt the world market and its European allies. I’m sorry.

According to U.S. officials, sanctions on oil and gas exports, or separating Russia from SWIFT, is currently the basic infrastructure to facilitate financial transactions between banks around the world, but Russia’s actions. May vary depending on.

Still, this time, officials said the United States has abolished the gradual approach to slowing the impact of 2014 and other efforts, and instead bans broader activities from the beginning.

“We and our allies are preparing the full range of influential sanctions, both shortly after and after the Russian invasion,” said Emily Horn, a spokeswoman for the National Security Council. rice field.

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“We will start high and stay high, maximizing the Kremlin’s pain,” said one of the officials.

Russian president

Vladimir PutinThis demand exceeds Ukraine Including reworking security arrangements during the post-Cold War era In Europe.

Europe “understands that if we change Putin’s calculus, we need to prepare together to impose large consequences,” officials said. The actions of the United States and the European Union are not the same, but “it will have a serious and immediate blow to Russia, making its economy even more vulnerable over time,” officials said.

Russian Foreign Minister Sergeĭ Viklov said this week that the threat of sanctions is part of the western “militarist frenzy.” According to him, Russia is “ready for all development.”

Other than VTB Bank, the major government-owned or controlled banks that are considering blacklisting are Gazprombank.

Sberbank,

One of the officials said. Sberbank, which accounts for 30% of Russia’s financial system’s net worth, may not be hit in the first round of sanctions to reserve strong options, according to former officials.

VTB, Gazprombank and Sberbank did not respond to requests for comment.

Possible blacklists technically prohibit US banks and other US entities from doing business with eligible banks, and government may allow exceptions. However, the risk of a violator being punished by the United States usually encourages foreign banks to comply.

“Banks in Paris and London aren’t going to do what U.S. banks aren’t doing,” said Brian Brian, a former Treasury sanctions official in the Obama administration and now a senior researcher in the nonpartisan Atlantic Council. Otur said. Washington think tank.

State-owned enterprises are subject to similar sanctions, according to US officials.Authorities did not identify which company, but some financial analysts said with blacklist companies like Russian insurance giant Sogaz, which insures companies related to the Kremlin.

Sovcomflot,

Large energy carriers will hurt the Kremlin, and in the long run, the economy.

img 61f47dd417ea1

Oil tankers operated by Sovcomflot were moored three years ago at the Primorsk commercial port, the end of the Baltic pipeline system.


Photo:

Alexander Ryumin / Zuma Press

Nikolai Kolesnikov, chief financial officer of Sovcomflot, said his company has no signs of being targeted. Given that half of his company’s business is abroad, blacklisting is likely to disrupt oil exports and hurt global tanker rates, he said.

Sogaz did not respond to the request for comment.

Some former Biden administration officials and critics are skeptical about whether the approach works or proves to be different from past efforts. Aside from the stronger Russian economy, Mr Putin relies on Germany and other EU leaders to thwart measures that would have a financial impact on Europe, they said.

“Putin concluded that the Biden administration, which was full of the same people who responded weakly to the first invasion of Ukraine in 2014, would impose financial costs for Pimplic at best, Marshall Billing Three, He is a sanctions deputy for the Trump administration’s Ministry of Finance and is currently at the Hudson Institute, a think tank to the right.

According to some analysts, the previous sanctions did not loosen power or radically change foreign policy without compromising Mr Putin’s domestic popularity. According to them, the new sanctions could strengthen Putin’s position, impact Western companies and direct Russia further to China.

Mikhail Barabanov, a fellow at the Strategic Technical Analysis Center, a private think tank in Moscow, said the new sanctions “will have the greatest impact on the most pro-Western parts of the business elite and economically Western-minded people.” Stated.

“Political, it’s not painful. It’s destructive,” Kremlin spokesman Dmitry Peskov said this week.

Barabanov predicted that sanctions would help restructure Russia’s banking market and fund China’s intermediary banks after the first shock.

Sanctions are “not a silver bullet,” said Daniel Fried, a senior Obama administration official who is currently involved in the sanctions policy of the Atlantic Council.

“Even with stronger recommended sanctions, Putin will not turn his course overnight,” he said. Meanwhile, governments and analysts “often underestimate what can be achieved in the long run,” he said.

Write in Ian Tally ian.talley@wsj.com And Brett Forrest brett.forrest@wsj.com

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Biden’s sanctions plan targets Russian banks, businesses and imports if Ukraine is attacked

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