US President Joe Biden, with Treasury Secretary Janet Yellen (L) and Defense Secretary Lloyd Austin (R), speaks during a meeting with his cabinet at the White House in Washington, DC, on March 3, 2022.
Jim Watson | AFP | Getty Images
US President Joe Biden on Friday signed an executive order that allows Washington to impose sanctions on financial institutions that help Russia evade sanctions, the White House said in a statement.
The executive order, part of a broader US crackdown on sanctions evasion, also gives Washington the ability to expand import bans on certain Russian goods, such as seafood and diamonds, it said. of the White House.
“We are sending an unmistakable message: Anyone who supports Russia’s illegal war effort is at risk of losing access to the US financial system,” National Security Advisor Jake Sullivan said in a statement.
Senior administration officials, speaking on condition of anonymity, said the new executive order would make it clear to financial institutions that they must stop allowing their companies to ship parts and goods to the defense sector. of Russia, or face significant sanctions.
The United States and its allies, including the European Union and Britain, imposed sanctions on Russia after the February 2022 invasion of Ukraine. They continue to increase pressure on Moscow, targeting Russian President Vladimir Putin, the financial sector and dozens of oligarchs.
The order was issued in coordination with allies, officials told reporters.
The United States has repeatedly warned companies against evading US sanctions imposed on Russia, and has targeted companies in the United Arab Emirates, Turkey and China that it accuses of helping Moscow evade those step.
Earlier this month, the United States imposed sanctions on hundreds of people and entities including China, Turkey and the United Arab Emiratesas it aims to evade Russian sanctions.
Senior US officials have also traveled to Turkey, the United Arab Emirates and other countries to warn that businesses could lose access to G7 markets if they do business with entities subject to US curbs .
Although the order did not target specific countries, those most involved in evasion and violations of US sanctions were “obvious,” said Edward Fishman, who worked on Russia sanctions at the State Department. during the administration of President Barack Obama, citing, among them, China, Turkey and the UAE.
“It’s really about signaling a more aggressive US enforcement posture, putting the spotlight on banks and companies around the world,” said Fishman, who is now at Columbia University.
It sends a message that the US will be different in the coming months and will likely punish more companies and banks that do business with Russia’s military industrial complex, Fishman said, adding that he expects many banks to decide avoid Russia as a result.
Choking point
The new order gives Washington and its allies new tools to target networks that Moscow is trying to put in place to evade these sanctions by using front companies and “witting and unwitting financial intermediaries, ” said one of the senior officials.
“We have sanctioned a number of these companies that we have found, but ultimately the choke point for these companies and Russia’s ability to continue to try and evade our sanctions is the financial system,” said official
“What this tool allows us to do is target those institutions and give them a very tight choice.”
The provisions will take effect immediately.
Officials said they were not aware of any US or European institutions violating the order, noting that most US and European companies have already scaled back their business with Russia.
Brian O’Toole, a former Treasury Department official who is now at the Atlantic Council think tank, said the executive order would allow the Biden administration to use secondary sanctions in a more nuanced way.
“This … should make it easier to message and impose sanctions on Russia’s sanctions evasion efforts and have a deterrent effect on those who think of doing business that might be linked to the Russian military ,” O’Toole said.
“These are similar to Iran-style sanctions,” he said.
The executive order would also give Washington the ability to ban products originating in Russia but modified outside the country, including diamonds and seafood, the White House said.
The action is after the Group of Seven nations earlier this month announced an outright ban on Russian diamonds starting January 1, followed by phased-in restrictions on indirect imports of Russian gems from around March 1.
