US announces an expansion of sanctions on Russia 

The United States has updated its sanctions on Russia, which will now start including stricter measures on banks engaging with sanctioned entities. 

This follows a December initiative targeting foreign banks supporting Russia’s war efforts in Ukraine. In December, President Joe Biden signed an executive order sanctioning banks connected to approximately 1,200 individuals and companies aiding Russia’s military. 

These measures have now been expanded to cover about 4,500 entities, further exposing banks to the risk of being cut off from the US financial system. The US is also focusing on preventing gold laundering.

Peter Harrell, a former senior director for international economics at the White House, told Reuters that the US appears to be moving towards establishing a global financial embargo on Russia. 

The US Treasury announced sanctions on various parts of Russia’s financial system, including the Moscow Exchange, one of Russia’s primary stock exchanges. Additionally, the exchange, which is Russia’s largest foreign currency market, has ceased trading in dollars and euros.

The US has also targeted technology, as American-made chips and other technology have been found in Russian equipment on Ukrainian battlefields, such as drones, radios, missiles, and armoured vehicles. 

The US is also targeting shell companies in Hong Kong that sell chips to Russia. Restrictions will also apply to software and IT services, though the US has stated that these actions are not intended to disrupt civil society or telecommunications.

Despite the extensive sanctions imposed on Russia since its full-scale invasion of Ukraine in February 2022, the International Monetary Fund predicts that Russia’s economy will grow by 3.2% this year. However, analysts believe that these measures will eventually impede Moscow’s war efforts and gradually weaken Russia’s economy.

US Treasury Secretary Janet Yellen noted: “Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world. Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries.”