After the European Union and Great Britain, the United States in turn unveiled measures against Moscow. The “first tranche” of economic sanctions announced by Washington on Tuesday aims to cut Russia off from access to Western funding. Additional measures are also “on the table” in the event of an “escalation” in Ukraine.
Washington attacked on three fronts: sovereign debt, the financing of military spending, through two public banks, and five oligarchs close to Vladimir Putin. “We are putting in place broad sanctions on Russian sovereign debt. It means we cut off the Russian government from Western funding,” Joe Biden said in remarks.
Pressure on the ruble
“Together with our allies, we have cut off the Russian government, the Russian Central Bank and Russian sovereign wealth funds from all new funding from the United States and Europe,” detailed the House’s deputy national security adviser. -Blanche, Daleep Singh. “The Kremlin can no longer raise funds in the United States or Europe and its new debt can no longer be traded in American or European financial markets.” This measure could weigh on the value of the ruble, and increase the cost for Russian consumers of imported products.
Two Russian public banks, Vnesheconombank (VEB) and Promsvyazbank (PSB), are also targeted. The first is the Kremlin “piggy bank,” according to Daleep Singh. As for PSB, it is “crucial for the defense sector,” said the Treasury Department. Concretely, “these banks can no longer carry out transactions with the United States or with Europe (…) and their assets in our respective financial systems will be frozen”, explained Daleep Singh.
Washington is also attacking the Russian “elites”, and is targeting five close associates of President Putin and their families, who have seen their assets in the United States frozen and are excluded from the American financial system. These actions “start the process of dismantling the Kremlin’s financial network and its ability to fund destabilizing activities in Ukraine and around the world,” Treasury Secretary Janet Yellen said. She also raised the possibility of additional sanctions “which will have a serious and lasting impact on the Russian economy”, echoing Joe Biden who threatened Russia with new measures “if it continues its aggression”.
Swift as Sword of Damocles
The entire Russian banking sector could thus be targeted, and an American official mentioned in particular the major banks Sberbank and VTB. An exclusion of Russia from the international Swift system, essential for international banking exchanges, is also one of the options. As for export controls that would stop the flow of high-tech components to Russia, this is a “key element of our potential sanctions”, underlined a US official.
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