US prepares to enforce sanctions against Russia

Washington — The US and its allies will impose new sanctions this week to crack down on Russia’s efforts to evade sanctions and export controls aimed at forcing Moscow to end its war in Ukraine, deputy treasury secretary Wally Adeyemo said on Tuesday.

Adeyemo said a coalition of more than 30 countries is to crack down on Russia’s purchases of dual-use goods such as refrigerators to secure semiconductors needed for its military. The sanctions will also seek to do more to stem the transhipment of oil and other restricted goods through bordering countries, though he did not give details.

Officials are also to warn companies and individuals still doing business with Russia that they face sanctions if they continue doing so.

“The breadth of this coalition is what will enable us to continue to isolate Russia,” Adeyemo is to say in a speech to be delivered at the Council on Foreign Relations later on Tuesday, ahead of Friday’s one-year anniversary of Russia’s invasion.

“We will force those that fail to implement our sanctions and export controls to choose between their economic ties with our coalition of countries — representing more than half of the world’s GDP — or providing material support to Russia, an economy that is becoming more isolated every day.”

The goal, Adeyemo said, is to keep raising the cost to Russia of evading sanctions and trying to get around an oil price cap imposed by the Group of Seven rich nations and Australia by creating its own alternative ecosystem to sell oil.

Russia has already been forced to divert billions in funds from the war to pay for insurance, shipping and other services, and Washington will seek “additional ways to drive up” those costs, he said, without elaborating.

Echoing remarks made in an interview with Reuters last week, Adeyemo said US and allied officials are to warn companies and financial institutions in their own countries — and India and China — against evading sanctions imposed on Russia.

They are also providing “actionable” intelligence to countries, including several of Russia’s neighbours, to enable them to stamp out sanctions evasion. If they fail to act, he said, “we and our partners are prepared to use the various economic tools at our disposal to act on our own.”

US and coalition officials are to warn companies and banks in these countries that they face being cut off from Western markets and financial systems if they do not enforce sanctions.

Adeyemo acknowledged that Russia’s economic data appears better than expected at the start of the war, but said Western sanctions are forcing the Kremlin to use limited resources to prop up its economy. “One year into this conflict, Russia’s economy looks more like Iran and Venezuela’s than a member of the G20 [Group of 20 major economies],” he said in the prepared remarks.

Adeyemo said Washington is concerned about deepening ties between Russia and China, but Beijing cannot provide Moscow with the advanced semiconductors it needs to replace military equipment lost since the start of the war.

Reuters