US announces sanctions cutting off Russia from Western financial institutions

The United States will impose its “first tranche” of sanctions on Russia in response to what US President Joe Biden has called the start of an invasion of Ukraine.

The measures include blocking sanctions against two Russian banks and sanctions to block Moscow’s access to Western financial institutions, Biden said, saying Russia’s actions violated international law.

“None of us will be fooled” by Russian President Vladimir Putin’s claims about Ukraine, Biden said in a Feb. 22 address to the nation, adding that more sanctions could be added if Moscow continued its aggression.

‘This is the start of a Russian invasion of Ukraine,’ Biden said, referring to Putin’s stated plans to send troops beyond areas of eastern Ukraine that separatists backed by Russia claim to control.

“He sets up a justification for taking more territory by force,” Biden said.

The two designated banks are Russia’s Promsvyazbank, the armed forces bank, and the Kremlin-controlled VEB Bank, the country’s development bank. Together, the two banks hold $80 billion in assets, a senior administration official said in a call with reporters after Biden announced the sanctions.

The United States also sanctioned Aleksandr Bortnikov, the head of Russia’s Federal Security Service (FSB); the Kremlin’s first deputy chief of staff, Sergei Kirienko; and Promsvyazbank CEO Pyotr Fradkov. Their families were also punished.

The official said that if the invasion continues, Washington is ready to take further action against Russia’s largest financial institutions, including Sberbank and VTB, which collectively hold nearly $750 billion in assets, more than half of all assets held by Russian banks.

“It was the start of an invasion and this is the start of our response. If Putin escalates further, we will escalate further, using both financial sanctions and export controls,” the top said. responsible for administration.

Biden also said the United States would continue to supply “defensive” weapons to Ukraine and send additional equipment and forces to the Baltics to bolster NATO forces there.

The president said the United States had no intention of fighting Russia but would defend NATO territory in the hope of avoiding the worst-case scenario of a war in Europe.

“There is still time to avoid the worst-case scenario which will bring untold suffering to millions of people if they move as suggested,” he said. “I hope diplomacy is still available.”

Biden’s speech came after the European Union unanimously agreed to impose its own initial round of sanctions on Russia over its recognition of eastern Ukraine’s regions and decision to deploy there. troops.

French Foreign Minister Jean-Yves Le Drian said on February 22 that the foreign ministers of EU countries “had unanimously agreed on a first package of sanctions” during of a meeting in Paris.

Le Drian told reporters that Russia had violated international law and failed to meet its commitments.

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The sanctions will affect members of Russia’s lower house of parliament and others involved in approving the deployment of Russian troops to breakaway regions in eastern Ukraine, the country’s foreign policy chief said. EU, Josep Borrell.

The sanctions package will also affect Russia’s funding of Ukraine-related policies by limiting access to EU financial markets, he said, adding that the package “will hurt Russia, and it will do a lot of harm.”

Later on February 22, Canadian Prime Minister Justin Trudeau announced economic sanctions against Russia, calling Moscow’s actions against Ukraine “completely unacceptable”.

Trudeau said Canadians would be banned from engaging in purchases of Russian sovereign debt, and the country would apply additional sanctions to Russian state-backed banks and prevent any financial transactions with them.

The moves follow new sanctions earlier imposed on Moscow, including a delay to its Nord Stream 2 pipeline, in response to President Vladimir Putin’s decision to recognize two breakaway regions of Ukraine as independent states and send troops into the territories.

Western leaders have said Russia’s actions have raised the chances of full-scale war in the middle of Europe as they work to coordinate sanctions to punish Moscow while trying to persuade the Kremlin to stop before an invasion of Ukraine.

On February 22, the White House began calling Russian troop deployments in eastern Ukraine an “invasion,” indicating that a red line had been crossed.

“We believe this is, yes, the start of an invasion, Russia’s latest invasion of Ukraine,” said Jon Finer, senior deputy national security adviser. “An invasion is an invasion and that’s what’s going on.”

Britain said earlier it would impose sanctions on five Russian banks and three wealthy individuals in what British Prime Minister Boris Johnson called a ‘first barrage’ of measures against Moscow for its actions against Ukraine .

He told parliament Britain still had an array of financial weapons to hit Moscow with if it escalated the crisis.

Prime Minister Boris Johnson has said Britain will impose sanctions on five Russian banks and three wealthy individuals in what he called the “first barrage” of action against Moscow for its actions against Ukraine.

“The UK and our allies will begin to impose the sanctions on Russia that we have already prepared using the unprecedented new powers granted by this House to sanction Russian individuals and entities of strategic importance to the Kremlin,” he said. Johnson in Parliament on February 22.

Johnson told parliament Britain still had an array of financial weapons to hit Moscow with if it escalated the crisis.

“It is absolutely vital that we keep powerful new sanctions in store…given what the President [Vladimir] Putin could do next,” he said.

“We want to stop Russian companies from raising funds in sterling or even dollars… We want them to stop raising funds in UK markets and we want to lift the veil that hides the ownership of property in this country “, Johnson said.

He said the sanctions would affect Rossiya Bank, IS Bank, General Bank, Promsvyazbank and Black Sea Bank.

Three Russian oligarchs with interests in energy and infrastructure – Gennady Timchenko, Boris Rotenberg and Igor Rotenberg – will have their assets frozen and banned from traveling to Britain, he said. All three have already been sanctioned by the United States.

German Chancellor Olaf Scholz says his country suspended the certification process for the controversial Nord Stream 2 gas pipeline from Russia via the Baltic Sea in reaction to Moscow’s actions in Ukraine.

It has amassed more than 150,000 troops along the Ukrainian border in recent months, raising fears of an imminent invasion from its neighbour.

Moscow had denied plans to invade Ukraine ahead of Putin’s February 21 order to send troops to breakaway areas, saying they were needed to keep the peace and protect civilians – claims that the West quickly rejected.

With reports from AFP, Reuters and AP

Marianne R. Winn