US President Joe Biden on the tarmac at Milwaukee Airport in Wisconsin (north), December 20, 2023 (AFP / Mandel NGAN)
According to the White House, President Joe Biden will sign 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.
“We are sending a clear message: those who support Russia’s illegal war efforts risk losing access to the U.S. financial system,” he said.
For the Americans, this means that the mechanisms introduced by Russia to circumvent the sanctions and embargoes accumulated by the West since the invasion of Ukraine will become more complicated.
“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.
The United States, Ukraine's main backer, is banking on the deterrent effect of this announcement, which comes at a time when the American Congress is struggling to agree on further military support for Kiev.
“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.
He explained that most European or American banks have already stopped their financing activities in Russia, but noted that they are in contact with financial institutions in other countries that may continue to do so.
– diamonds –
Washington is therefore relying on these Western banks to prevent their partners in third countries from continuing to do business with Moscow.
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 also expanded its military cooperation with Iran, which supplies the country with drones, and with North Korea.
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.