The United States is taking further steps to increase economic pressure on Russia and President Vladimir Putin following horrific images of the Ukrainian town of Bucha, announcing new sanctions on Russian financial institutions, as well as certain people on Wednesday. , including Putin’s adult daughters and the wife and daughter of his foreign minister.
“Today we are significantly compounding 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 said. to journalists.
Sberbank owns almost a third of the total assets of the Russian banking sector, the official noted, adding that the United States has now fully blocked “more than two-thirds of the Russian banking sector”.
Second, the senior official announced, “In agreement with the G7 and the EU, we are announcing a ban on all new investment in Russia.” This will be implemented by an executive order signed by US President Joe Biden.
The administration is also imposing blackout sanctions on a new set of Russian elites and their family members, including Putin’s adult daughters, Mariya Putina and Katerina Tikhonova, the foreign minister’s wife and daughter. Sergei Lavrov and members of the Russian Security Council, including the former president and prime minister. of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin. The United States has already sanctioned more than 140 oligarchs and their family members and more than 400 Russian government officials, the senior official said.
The United States will also apply full lockdown sanctions to key critical Russian state enterprises, to be announced by the Treasury Department on Thursday. The official also noted Tuesday’s announcement that the Treasury Department has blocked Russia from repaying its debt with dollars stored in 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 expected to decline in double digits this year… It is not isolating itself as a pariah state. According to IMF (International Monetary Fund) projections, the economic shock in this year alone will wipe out the last 15 years of economic gains,” the official said.
Pressed on the effectiveness of sanctions in ending Putin’s war in Ukraine, the senior official sought to emphasize the effect they are having on life in Russia and said Putin should eventually 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 a promise of stability and therefore he does not give them stability,” the official said.
“The question really isn’t so much: what can we do and when will it have an effect? I think it’s: what’s the endgame here for Putin? Why is he playing? added the official. “It very clearly becomes a failure for him and at some point he will have to recognize that reality.”