The US is taking additional actions to increase economic pressure on Russia and President Vladimir Putin following horrific images from the Ukrainian city of Bucha, announcing new sanctions Wednesday on Russian financial institutions, as well as some people, including Putin’s adult daughters and the wife and daughter of his foreign minister.
“Today we’re dramatically escalating the financial shock by imposing full blocking sanctions on Russia’s largest financial institution, Sberbank, and its largest private bank, Alfa Bank,” a senior administration official briefing reporters said.
Sberbank holds nearly one-third of Russia’s total banking sector assets, the official noted, adding that the US has now fully blocked “more than two-thirds of the Russian banking sector.”
Second, the senior official announced, “In alignment with the G7 and the EU, we’re announcing a ban on new investment in Russia.” That will be implemented with an executive order signed by US President Joe Biden.
The administration is also putting full blocking sanctions on a new set of Russian elites and their family members, including Putin’s adult daughters Mariya Putina and Katerina Tikhonova, Foreign Minister Sergey Lavrov’s wife and daughter and members of Russia’s Security Council, including former President and Prime Minister of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin. The US has already sanctioned more than 140 oligarchs and their family members and over 400 Russian government officials, the senior official said.
The US will also apply full blocking sanctions on critical major Russian state-owned enterprises, which will be announced by the Department of Treasury on Thursday. The official also noted Tuesday’s announcement that the Department of Treasury has blocked Russia from making debt payments with dollars stockpiled at US banks.
The senior official noted the crippling effect of US measures on the Russian economy since its invasion of Ukraine.
“Russia’s GDP is projected to shrink by double digits this year… It’s not in the process of being isolated as a pariah state. The economic shock this year alone is projected by the IMF (International Monetary Fund) to wipe out the past 15 years of economic gains,” the official said.
Pressed about the efficacy of sanctions in ending Putin’s war in Ukraine, the senior official sought to underscore the effect they are having on life in Russia and said Putin would eventually have to reckon with his people.
“Even an autocrat like Putin has a social contract with the Russian people. He took away their freedom in exchange for promising stability and so he’s not giving them stability,” the official said.
“The question really is not so much: What can we do and when will that have an effect? I think it’s: What’s the endgame here for Putin? What’s he playing for?” the official added. “This is very clearly becoming a failure for him and at some point he will have to recognize that reality.”