WASHINGTON. When the Obama administration imposed sanctions on Russia for invading Ukraine in 2014, US officials hoped they would deter President Vladimir Putin from further aggression.
Some officials now argue that the sanctions have prevented Mr. Putin from ordering Russian troops outside of their halt in the Crimean peninsula and eastern Donbas. But Mr. Putin held on to Crimea, and on Monday he ordered more troops into rebel-held territory in eastern Ukraine, where thousands of Russian soldiers were active, and said the Kremlin would recognize the enclaves as independent states.
Now President Biden, who as vice president helped oversee Ukraine’s politics in 2014, must weigh what sanctions can force Mr. Putin to stop his new offensive, which the White House judged be an “invasion”. The White House is taking a step-by-step approach, trying to match each piece of action with Mr. Putin’s actions.
“I am going to start imposing sanctions in response, far beyond the steps we and our allies and partners took in 2014,” Mr. Biden said Tuesday, announcing new set of sanctions. “And if Russia goes further with this invasion, we are ready to go further.”
While U.S. officials have been studying the effects of sanctions imposed since 2014 and honing methods, Putin has had years to make his country’s $1.5 trillion economy more isolated so that part of Russia is protected from harsh punishments. . Speaking to reporters on Friday, he boasted that his country had become more self-sufficient in the face of “illegal” Western sanctions. according to This is reported by the Russian news service TASS. He added that in the future it will be “important for us to increase the level of our economic sovereignty.”
And, perhaps most importantly, Mr. Putin and his closest aides and associates in Moscow may not be hit hard by the sanctions themselves, analysts say.
Mr. Putin’s decision on Monday to speed up the deployment of troops shows that he has come to believe that the cost of new sanctions is bearable, despite US claims of “enormous consequences” for his country. Several of his top aides made the point in orchestrated speeches to Putin at his Security Council meeting Monday in Moscow.
If Russian officials maintain this attitude, the Biden administration may decide it will have to impose the most severe sanctions that will cause suffering to many ordinary citizens, or look for a non-economic option, such as providing more military assistance to the country. insurgency in Ukraine. Mr Biden said he won’t send American troops defend Ukraine.
Some of Putin’s radical nationalists were already on the Treasury’s sanctions list and agree that they and their families will no longer have significant ties to the United States or Europe for the rest of their lives, he said. Alexander GabuevChairman of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center.
“They are all-powerful in today’s Russia,” he said. “There is a lot of posh wealth here. They are completely secluded. They are kings, and this can only be ensured in Russia.”
In addition, because of their role in state-owned enterprises and their business connections, they are “the very guys who are directly benefiting from the fact that the economy becomes more isolated, more disconnected from the outside world,” he added.
They have also adopted a siege mentality based on ideological notions about the United States and its sanctions policy, which Mr. Putin regularly promotes. “He says, ‘It’s not because of my actions, but because we’re rising as a power, and the Americans want to punish us for opposing hegemonism,'” Mr. Gabuev said. “I think it’s sincere. Most of my contacts in the government believe this.”
The sanctions announced by the United States on Tuesday include fines against three sons of senior officials close to Mr. Putin and two state-owned banks, as well as further restrictions on Russia’s ability to raise revenue through the issuance of government debt. The costs are not expected to be widely felt in Russia – both banks are political institutions and do not engage in retail operations – but US officials may end up announcing more painful moves.
The announcement follows an executive order issued by Mr. Biden Monday night that bans business dealings between Americans and organizations in Russia-backed eastern enclaves in Ukraine. The Biden administration will also have the power to impose sanctions on anyone working in these areas, the US official said.
Updated
February 22, 2022 7:01 pm ET
On Tuesday, the UK announced it was freezing the assets of five Russian banks and imposing sanctions on three Russian billionaires and some members of parliament. And Germany said it termination of certification the Nord Stream 2 gas pipeline, which was supposed to connect with Russia.
Officials from the White House, State Department and Treasury have spent weeks coordinating a response with European leaders and major financial institutions and say they can act almost as soon as Russia escalates its actions.
Some experts say that if the Biden administration takes the most stringent measures that officials have proposed—primarily barring the country’s leading banks, including Sberbank and VTB, from dealing with non-Russian entities—Russia could face a financial panic that causing a stock market crash and rapid inflation. The effect is likely to affect not only billionaire oligarchs, but also middle- and low-income families. Russian enterprises will also not be able to receive payment for the export of energy resources.
In addition to isolating Russian state-owned banks, the escalation of sanctions prepared by US officials will also make it impossible for them to acquire critical technology from US companies.
If the United States imposes the most severe sanctions, “there will be unexpected and unpredictable consequences for global markets,” said Maria Snegovaya, a visiting fellow at George Washington University and co-author of the paper. Atlantic Council Document about US sanctions against Russia.
Edward Fishman, a senior State Department sanctions official in the Obama administration, called Biden’s actions a modest first step, intended as a “nose shot.”
Understand how the Ukrainian crisis unfolded
Card 1 of 7
Failed diplomatic efforts. That United StatesNATO and Russia were involved in whirlwind of diplomacy prevent the escalation of the conflict. In December, Russia put forward a series of demands, including guarantees that Ukraine would never join NATO. The West rejected these demands and threatened economic repercussions.
Mr. Fishman said the administration’s action against one of the two target banks – VEB, the country’s main development bank – was the first time the United States had completely shut down a state-owned Russian financial institution. “I interpret this as a warning that the Biden administration is ready to cut off other large Russian banks from the US financial system,” Mr. Fishman said.
“Biden is giving Putin an opportunity to step back from the abyss,” he added. “But he also makes it clear that if Putin unleashes a full-scale war, the economic costs will be enormous.”
A severe economic downturn could test Mr. Putin’s control over his country. But many analysts are skeptical that the United States and its European allies will pursue the toughest options they have considered, as they may be discouraged by fears of collateral damage to their own economies.
And none of the Western officials even offered to stifle the lifeblood of the Russian economy by cutting off lucrative energy exports. Experts say a move against Russia’s energy revenues will have the biggest impact, but it will also lead to a dangerous political situation for Mr. Biden and other world leaders as oil and gas prices soar at a time of high global inflation.
The Russian government has spent years trying to realign its budget and finances so it can withstand further sanctions, an effort fueled by high market prices for oil and gas. It has relatively low debt and relies less on loans from foreign entities than it did before 2014. Most importantly, the central bank accumulated foreign exchange reserves in the amount of 631 billion dollars, which is the fourth largest such reserve in the world.
Some important Russian state-owned enterprises and private companies have indeed benefited from US sanctions. The Kremlin’s policy of replacing Western imports with Russian and non-Western products is boosting the profits of these enterprises. And some of Mr. Putin’s allies and their families have succeeded in these initiatives. One example is Dmitry Patrushev, the Minister of Agriculture, whose family has become richer thanks to the new agricultural policy, Mr. Gabuev said.
Chinese President Xi Jinping, who strengthening the ties of their people with Russia, could help Mr. Putin bypass some sanctions or support the Russian economy by increasing energy purchases. When the two leaders met in Beijing at the start of the Winter Olympics, their governments announced a 30-year deal under which China would buy gas through a new pipeline through Siberia. Chinese companies can also fill some of the gaps in the supply chain left by the halting of exports of certain technologies from the US to Russia, although these companies cannot replicate more advanced US products.
Chinese leaders are likely to be wary of their large state-owned banks continuing to deal openly with any US-sanctioned Russian banks, but China has ways to cover up some transactions.
“They have developed a lot of electronic payments and digital workarounds,” said Daniel Russell, former Assistant Secretary of State for East Asian and Pacific Affairs and leader of the Asia Society. “There are all sorts of pretty complex barter systems that they use. Thirdly, they can hide behind a lot of black market stuff.”