President Joe Biden will sign an executive order on Friday authorizing the United States to take so-called “secondary” sanctions against financial institutions that support the Russian war effort against Ukraine, a senior White House official said.
“What we want to do is target materials that Russia absolutely needs to produce weapons. […] To obtain these materials, (the Russians) need to go through the financial system, which makes it a potential hotspot, and this tool targets that hotspot,” he explained.
The senior official, who spoke in an interview with journalists on Thursday and whose comments were embargoed, requested anonymity.
The United States, Ukraine’s primary supporter, is banking on the deterrent effect of this announcement, which comes as the American Congress struggles to agree on continued military support for kyiv.
“Our idea, quite frankly, is that jurisdictions and financial institutions will take steps to put an end to their behavior before we have to use” this new sanctions mechanism, said the senior official.
“Ultimately, almost any bank in the world, if given the choice between continuing to sell a small amount of goods to the Russian military-industrial complex or being connected to the American financial system, will choose to be connected to the system American financier,” he said.
The senior official explained that most European or American banks had already stopped financing activities in Russia, but noted that they were in contact with financial institutions in other countries, which potentially continued to do so. TO DO.
Diamonds
Washington is therefore counting on these Western banks to dissuade their partners in third countries from continuing to do business with Moscow.
The United States will also, according to a senior executive official, set up an embargo on products imported from countries other than Russia, but made from Russian raw materials, for example diamonds.
Westerners have already taken numerous asset freeze and embargo measures against Russian entities, personalities and companies, in order to stop the war machine and undermine the economy.
The accumulation of Western measures has had a “significant impact” on Moscow, assured the senior official, estimating that Russia was “struggling” to replenish its arms stocks, and recalling that revenues from Russian hydrocarbons had declined. by about a third.
Nevertheless, almost two years after the start of the war in Ukraine, the Russian economy seems to be holding up despite this avalanche of sanctions.
Russia continues to sell hydrocarbons in particular to China and India, and has put in place, according to experts, effective mechanisms to circumvent in particular a cap on the sale price of its oil decided by the West.
According to Washington, Moscow has also developed its military cooperation with Iran, which supplies it with drones, and with North Korea.
According to the IMF, Russia is expected to grow just over 2% this year, and just over 1% next year.