The Biden administration will announce an additional sweeping sanctions package that includes a ban on all new investment in Russia, Russian banks and state-owned enterprises, additional sanctions on Russian government officials and family members.
The new sanctions package will mark the latest escalation in efforts by the U.S to impose costs on Russia for its invasion and, over time, cut off critical economic sectors the country utilizes to wage the ongoing war. They also follow new revelations of further atrocities in the town of Bucha near Kyiv which had been occupied by Russian forces.
“These measures will degrade key instruments of Russian state power, impose acute and immediate economic harm on Russia, and hold accountable the Russian kleptocracy that funds and supports Putin’s war,” the official said. “These measures will be taken in lockstep with our allies and partners, demonstrating our resolve and unity in imposing unprecedented costs on Russia for its war against Ukraine.”
According to an administration official, the latest round of sanctions will be applied in conjunction with the European Union and Group Of 7.
The Biden administration is eyeing an expansion of sanctions on Russia’s largest financial institution. The new sanctions would also target Russian President Vladimir Putin’s two adult daughters, according to an administration official familiar with the plan, noting that the administration believes the Russian President is hiding his personal wealth with immediate family members.
“We have reason to believe that Putin, and many of his cronies, and the oligarchs, hide their wealth, hide their assets, with family members that place their assets and their wealth in the U.S. financial system, and also many other parts of the world,” a senior administration official told reporters.
The expected sanctions come after the U.S Treasury on Monday blocked Russia from paying holders of its sovereign debt more than $600 million from reserves held at American banks. Until this week, the Biden administration had allowed Russia to continue to repurpose the substantial funds it has kept in U.S. financial institutions to make required payments on its sovereign debt.
Russia has two upcoming on its sovereign debts and has 30 days to find another way to meet the two payments. A default would make it more difficult for Russia to borrow from international lenders, dramatically pushing up the cost of borrowing for the Kremlin. According to the official, the move imposed from that officials say will substantially raise the risk of default and undercut urgent efforts by the central bank to stanch the economic bleeding that immediately arrested the Russian economy in the wake of the Western response to the invasion.
The United States and its allies have imposed multiple sanctions in an attempt to isolate Putin and hurt Russia’s economy amid the invasion, curbing the country’s technology exports and imposing sanctions on Russian financial institutions, the defense sector, and government officials. However, none of the sanctions were imposed on Russian oil, the country’s most important asset.
Russia continues to rank in over billions daily from oil and gas exports despite the U.S. imposing a ban on Russian imports of Crude oil. European nations, the main purchasers of Russian crude oil and energy products, on the other hand, have not imposed any formal restrictions on buying the fuel amid the invasion. Those European nations reliant on Moscow for its energy are still buying energy from Russian oil giants like Gazprom, flooding Moscow with euros and dollars that can then be used by any of the more than 200 banks that aren’t under sanction.