Russian Finance and Defense Targets of Hundreds of New Sanctions

Biden said the goal of the action was to ensure that Putin "pays an even greater price for aggression abroad and repression at home." Measures were also introduced by the EU, Britain and Canada

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Joe Biden, Photo: Reuters
Joe Biden, Photo: Reuters
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

Yesterday, the United States imposed extensive sanctions on Russia on the occasion of two years since the start of the invasion of Ukraine and in retaliation for the death of Russian opposition leader Alexei Navalny.

President Joe Biden said the goal of the measures, aimed at more than 500 individuals and businesses, was to ensure that Russian leader Vladimir Putin "pays an even greater price for aggression abroad and repression at home."

The target of the sanctions is the Russian payment system "Mir", financial institutions and its military-industrial base, circumvention of sanctions, future energy production and other areas, reported Reuters. Penalties have also been imposed on prison officials who the US says are connected to Navalny's death.

The new round of US sanctions is an attack on Russia's key interests, but Moscow will continue to protect them, Russian Ambassador to the US Anatoly Antonov said, as reported by RIA.

"The new illegitimate restrictions are another brazen and cynical attempt to interfere in the internal affairs of the Russian Federation," said Antonov.

The Biden administration is seeking to continue supporting Ukraine, which is facing acute ammunition shortages, and the approval of additional US military aid has been stalled in Congress for months.

The European Union, Great Britain and Canada also took action against Russia yesterday.

The Council of the European Union adopted the 13th package of restrictive measures against Russia, and the list of sanctioned entities includes the company "Koneks" from Belgrade for circumventing trade restrictions, Beta reported.

New sanctions were introduced for 106 individuals and 88 entities responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

EU
photo: Reuters

"Today we are further tightening the restrictive measures against the Russian military and defense sector," said the head of EU diplomacy, Josep Borrell.

"We remain united in our determination to dismantle the Russian war machine and help Ukraine win its legitimate battle for self-defense."

Russia's $2,2 trillion economy has turned out to be more resilient to two years of unprecedented sanctions than both Moscow and the West expected.

Yesterday, the US Department of the Treasury introduced penalties for almost 300 individuals and companies, the State Department for more than 250 individuals and companies, and the Department of Commerce added more than 90 companies to the list of entities.

Brian O'Toole, a former Treasury official, said the move, while involving many names, had little impact.

"They won't have a big impact," O'Toole said, because most of the entities are Russian, not foreign firms, and are easy to replace as Moscow tries to avoid sanctions, Reuters writes.

But Peter Harrell, a former National Security Council official, said the moves against third-country sanctions avoidance networks sent a clear message that the US was prepared to take action against circumvention.

"I see this as a kind of valuable but gradual step that is part of the strategy that they have been implementing for the last two years," he said of the sanctions package.

Russia's $2,2 trillion economy has proved more resilient to two years of unprecedented sanctions than both Moscow and the West expected

The Office of Foreign Assets Control (OFAC), the US Treasury Department, also sanctioned two individuals and four companies from Serbia, the Voice of America reported.

The Ministry of Finance imposed sanctions on the state's National Payment Card System, the operator of the "Mir" system. "Mir" payment cards became more important after American competitors suspended operations in Russia when the invasion of Ukraine began, and their cards issued in that country stopped working abroad.

"By expanding the use of the Mir system, the Russian government has enabled Russia to create a financial infrastructure that helps it avoid sanctions and re-establish ties with the international financial system," the US Treasury Department said.

More than 12 Russian banks, investment firms, venture capital funds and financial technology companies are also targeted for sanctions, including SPB Bank, which is owned by the Saint Petersburg Stock Exchange (SPB), Russia's second-largest stock exchange that specializes in trading foreign stocks. .

The US sanctions have affected Russia's future energy production and exports, which is an additional blow to the Arctic LNG 2 project in Siberia. In November, Washington imposed sanctions on the main entity involved in the development, operation and ownership of this huge project, Reuters reminds.

Putin and Defense Minister Sergei Shoigu yesterday at the commemoration of the Day of Defenders of the Fatherland
Putin and Defense Minister Sergei Shoigu yesterday at the commemoration of the Day of Defenders of the Fatherlandphoto: Reuters

Yesterday, the State Department introduced punitive measures to the Russian shipbuilding company "Zvezda", which, as stated, is involved in the construction of up to 15 highly specialized LNG tankers intended to support the export of Arctic LNG 2.

Marija Snjegovaja from the Center for Strategic and International Studies said that the fact that the sanctions are aimed primarily at the Russian military industry and not at a significant reduction in Russia's income from energy products will not be enough to stop the war, AP reported.

"One way or another, eventually they're going to have to deal with Russian oil revenues and they have to consider an oil embargo," Snjegovaya said. "The oil price limit has practically stopped working".

The US has also imposed sanctions on entities based in China, Turkey, the United Arab Emirates, Kazakhstan and Liechtenstein for evading Western sanctions on Russia and filling loopholes, including sending items Moscow relies on for its weapons systems. This move also affected the network through which Russia, in cooperation with Iran, acquires and produces drones.

The Biden administration also imposed new trade restrictions on 93 entities from Russia, China, Turkey, the UAE, Kyrgyzstan, India and South Korea for supporting Russia's war in Ukraine.

The fact that the sanctions are aimed primarily at the Russian military industry and not at a significant reduction in Russia's income from energy sources will not be enough to stop the war

The State Department yesterday also fined three officials of Russia's Federal Penitentiary Service whom it accused of involvement in Navalny's death, including the deputy director who allegedly ordered prison staff to treat Navalny more harshly.

Punished and officials connected with the death of Navalny
Punished and officials connected with the death of Navalnyphoto: Beta / AP

Navalny died suddenly last week in a penal colony near the Arctic Circle, where he was serving a 30-year sentence, the prison service said.

Biden, who directly accused Putin of Navalny's death, met in California on Thursday with the widow and daughter of the opposition leader, whom he described as an "incredibly brave man."

The US action also targets people involved in what the State Department called the forced transfer or deportation of Ukrainian children to camps that promote indoctrination in Russia, Belarus and Crimea.

Reuters says Russia's economy performed better than expected, with the International Monetary Fund in January forecasting GDP growth of 2,6 percent in 2024 - up 1,5 percentage points from its October estimate. - after a solid growth of three percent in 2023.

"The current figures of Russian GDP are not self-sustaining economic growth that would put the Russian economy on the path to a more prosperous future. It is war spending that consumes the future to serve the present war,” said a State Department official.

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