The United States is set to impose sanctions on Russia that “exceed anything we’ve ever done,” President Joe Biden said Thursday in response to Russia’s full-scale attack on Ukraine.
Biden detailed expansive sanctions on Russia’s financial institutions, major enterprises and individuals in Putin’s power hierarchy. Also, the White House has placed restrictions on Russian civilian and military purchases of U.S. services and goods. This includes high-tech imports. These actions are a continuation of an earlier round Biden announced Tuesday after Putin sent troops to separatist areas in Ukraine.
“Putin’s aggression against Ukraine will end up costing Russia dearly, economically and strategically,” Biden said. “We will make sure of that.”
Following conversations on Thursday with both parties, the White House took the decision to sanction the Group of Seven leaders and the National Security Council (NSC). Biden made the announcement in response to calls by both Republican and Democratic members of Congress for harsh sanctions against Russian President Vladimir Putin.
The Russian aggression has triggered multilateral cooperation from countries “representing more than half the global economy,” Biden added. According to the White House, the European Union, Australia and Canada have all agreed to place similar sanctions.
“We will limit Russia’s ability to do business in dollars, euros, pounds and yen,” Biden said.
Putin’s desire to take over Ukraine is a vision that “the United States and freedom-loving nations everywhere will oppose with every tool of our considerable power,” Biden noted.
Here’s a breakdown of the U.S. sanctions announced Thursday:
U.S. Connections Block Major Russian Banks
The U.S. is cutting ties with Russia’s 10 largest financial institutions—effectively severing any flow of money between the U.S. market and institutions representing almost 80% of assets in the Russian banking sector.
The most notable restrictions fall on the country’s biggest bank, Sberbank, and 25 of its subsidiaries, all of which account for over one-third of Russia’s financial assets. VTB Bank Otkritie and Bank Otkritie are just a few of the major financial institutions being restricted by the U.S. Their assets which even come into direct contact with the U.S. banking system will be blocked. The U.S. government as well as its citizens will also be prohibited from conducting business with them. “That means that every asset [these banks] have in America will be frozen,” Biden said at the briefing.
Biden stopped short of implementing a blockage of so-called SWIFT transfers from Russia, explaining that the “sanctions that we have proposed on all of [Russia’s] banks is of equal consequence—maybe more consequence—than SWIFT.” He added that excluding Russia from SWIFT is “always an option. But right now, that’s not the position the rest of Europe wishes to take.” European officials reportedly opposed the SWIFT option because it would mean Russian companies and individuals would lose access to their main means of repaying There are approximately $30 billion of debtsThey owe European lenders.
Sanctions on Individuals in Putin’s Power Hierarchy
Over 10 individuals and entities have been added to the U.S. sanctioned list by the White House in response to the Ukraine invasion threat. All assets these people have in the U.S. will be frozen. They will also be barred from entering America.
“These are People who personally gained from the Kremlin’s policies, and they should share in the pain,” Biden said.
Officially, these civilian leaders are now on the “Specially Designated Nationals and Blocked Persons List” at the Treasury Department’s Office of Foreign Assets Control.
Restrictions on 13 Major Corporations & Other Entities
The sanction also targets 13 Russian banks and other organizations. That means the U.S. will apply new debt and equity restrictions on transactions involving the state-owned gas company Gazprom, the financial institution supporting Russia’s agricultural sector, and the Russian Railways train service.
These entities–representing Russia’s major industrial sectors–can no longer raise money through the U.S. market. The move is designed to damage the Kremlin’s ability to raise capital and generate revenue, according to the White House.
Russian military purchases subject to restrictions
The U.S. will specifically target Russia’s means of expanding its military, Biden said Thursday. Blocking the country’s armed services from certain imports and financing will frustrate Putin’s strategic ambitions, the White House said.
The Biden administration is restricting exports of “nearly all” U.S. items–as well as products made in other countries using U.S. technology, equipment or software–to entities including the Russian Ministry of Defense, which includes the Armed Forces of Russia.
Russian High-Tech U.S. Goods are Being Purchased by a Block
With so much of the world’s technology originating in the U.S., the White House wants to strike a blow to Russia by curbing its access to those advances. Blocking Russia’s (non-military) high-tech imports has widespread implications—it could affect the entire Russian economy, including its defense industry, and ultimately stymie its long-term growth.
A Russia-wide block of U.S.-produced “sensitive technology” will land heavily on the defense sector. U.S. technology will be blocked from countries that depend on American software and equipment. This may affect Russia’s military as well as access to Russian smartphones, telecommunications.
“We estimate that we’ll cut off more than half of Russia’s high-tech imports,” Biden said.