The US is threatening sanctions against banks that help finance the Russian war machine. The White House executive order targets lenders that Moscow uses to obtain sensitive items.
The Biden administration will blacklist foreign financial institutions that support Russia’s military-industrial complex as part of Washington’s efforts to starve Moscow’s war machine. The executive order issued Friday will allow the U.S. to impose sanctions on financial institutions that help Russia secure equipment and other goods needed to continue fighting in Ukraine. Sanctioned banks would be denied access to the US financial system.
End of support for Russia
“This statement makes clear that those who finance and facilitate transactions in goods that end up on the battlefield will face serious consequences,” U.S. Deputy Treasury Secretary Wally Adeyemo wrote in a Financial Times op-ed on Friday.
One senior U.S. official said Russia has spent a “significant amount of time and resources” directing its intelligence services to find ways to avoid sanctions and export controls. This included the use of “conscious and unwitting” financial intermediaries to circumvent restrictions and source key components.
New rules for banks
The Biden administration will work with U.S. and European banks to inform them of the new rules and make sure they communicate with their correspondent banks on how to avoid the new sanctions – or risk being cut off from the U.S. financial system, a senior official said .
According to the Financial Times, sensitive items that banks should avoid include semiconductors, machine tools, chemical precursors, ball bearings and optical systems.