Conflicts & War

US approves new sanctions on banks financing Russian war machine

Washington, Dec 22 (EFE).- President Joe Biden is set to sign an executive order on Friday imposing secondary sanctions on banks supporting companies aiding Russia in sustaining its war machinery during the aggression against Ukraine.

White House officials explained this is a new step to further disrupt material support to Russia’s defense industrial base and impede Russia’s efforts to enhance its military capability.

Since the invasion began, the United States and its allies have imposed countless sanctions that have had a significant impact on Russia’s ability to access the goods and technology it needs to build weapons.

But the Kremlin responded by devoting considerable time and resources to finding ways around them.

It created front companies with voluntary or involuntary financial intermediaries to circumvent the restrictions and obtain critical components for the war, such as semiconductors, but also many others, such as precursor chemicals, bearings, and optical systems.

Although the US claims that many of the front companies were uncovered, the new regulation provides a new tool for prosecuting banks that continue to allow the companies financed by them to ship such goods to the Russian military-industrial complex or to do business with Moscow.

As officials explained, the executive order provides a “surgical tool” to pursue financial institutions doing business to support such Russian military capabilities while prosecuting these companies.

The White House recalled that sanctions have always pursued two goals: to deny Russia access to the revenues it needs to wage war and to “slow down” the Russian war machine and disrupt its supply chain.

As sources explained, this is the first time a secondary sanctions tool has been authorized to target financial institutions during this conflict, while seeking to discourage the kind of behavior that advances Russia’s weapons capability in its aggression against Ukraine.

In a statement, US Treasury Secretary Janet Yellen sent a message to financial institutions targeted by the sanctions.

“No one should doubt the resolve of the United States and our partners when weighing the real risks associated with support for Russian evasion. We expect financial institutions will undertake every effort to ensure that they are not witting or unwitting facilitators of circumvention and evasion,” Yellen said.

Then she added that the United States “will not hesitate to use the new tools provided by this authority to take decisive, and surgical, action against financial institutions that facilitate the supply of Russia’s war machine.”

“The United States will hold accountable institutions that fail to implement appropriate measures,” Secretary of State Antony Blinken said in another statement.

“Today’s action underscores the need for financial institutions around the world to ensure they are not facilitating activities that support Russia’s war effort and implement due diligence practices that protect them from being exploited by Russia’s procurement networks,” he added. EFE

pamp/dgp/ics

Related Articles

Back to top button