US President Joe Biden on the tarmac at Milwaukee Airport, Wisconsin (North), December 20, 2023 (Mandel NGAN / AFP)
According to the White House, President Joe Biden signed an executive order on Friday authorizing the United States to impose so-called “secondary” sanctions on financial institutions around the world that support Russia's war effort against Ukraine.
The aim is to “further tighten control over Russia’s war machine and those who enable it to function,” commented US National Security Advisor Jake Sullivan in a press release.
The announcement comes as the American Congress is struggling to agree to a vote on a new $61 billion amount to continue aid to Ukraine called for by Joe Biden.
“We are sending a clear message: Anyone who supports Russia’s illegal war effort risks losing access to the American financial system,” said Jake Sullivan.
With this new instrument, the Americans are attacking the mechanisms put in place by Russia to circumvent the sanctions and embargoes accumulated by the West since the invasion of Ukraine.
The decree issued Friday will freeze the assets of foreign banks in the United States and ban them from opening or maintaining accounts in the country.
“What we want to do is target the materials that Russia absolutely needs to make weapons. (…) To obtain these materials, (the Russians) have to go through the financial system, making it a potential hotspot, and that.” “The tool targets this hotspot,” a senior White House official explained, who wished to remain anonymous, told the press on Thursday.
“Almost every bank in the world will choose to join the American financial system if given the choice between continuing to sell a small amount of goods to the Russian military-industrial complex or joining the American financial system.” said this senior official.
Diamonds
The United States will also expand its embargo measures against Russia to apply to products made from Russian raw materials (particularly diamonds or seafood) but processed and exported by “other countries.”
The West has already taken numerous asset freezing measures against Russian organizations, personalities and companies. They have also tightened import bans on Russian raw materials or goods to stop the war machine and weaken the economy.
“Our sanctions and restrictions have had a significant impact on Russia's ability to replace the equipment, materials and technology it needs to fuel its (Ukrainian) aggression. “They undermined Russia’s financial resistance and forced Russia to turn to rogue regimes for supplies,” he assured Jake Sullivan.
According to Washington, Moscow has expanded its military cooperation with Iran, which supplies the country with drones, and with North Korea.
Russian funds
Almost two years after the start of the war in Ukraine, the Russian economy appears to be holding up despite this avalanche of sanctions.
Russia continues to sell hydrocarbons, particularly to China and India, and has introduced effective mechanisms to circumvent a Western-imposed cap on the selling price of its oil, experts say.
According to the IMF, Russia is expected to grow at just over 2% this year and just over 1% next year.
The next big step in the U.S. and its allies' financial crackdown against Moscow could be to seize Russian funds deposited in Western banks and already frozen to finance Ukraine.
The senior American official quoted earlier merely suggested that there are currently “active discussions” between Westerners about these Russian assets.
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