The United States will impose sanctions on the families of Russian President Vladimir Putin and Foreign Minister Sergei Lavrov as part of a new set of sanctions intended to “significantly worsen” the “financial shock” that has been inflicted on Moscow since that Mr. Putin ordered an invasion of Ukraine in February.
According to a senior administration official who briefed reporters on the latest actions against Mr Putin and his government, President Joe Biden will sign an executive order on Wednesday imposing ‘full blocking sanctions’ on Sberbank – Russia’s largest financial institution – and the largest private bank in Russia. Russia, Alfa Bank.
“Sberbank alone is the main artery of the Russian financial system. it holds almost a third of the total assets of the Russian banking sector… and in total we have now completely blocked more than two thirds of the Russian banking sector, which before the invasion held approximately $1.4 trillion of assets,” the official said.
In addition, the official said the United States continues to “methodically [eject] Russia from the international economic order” in order to “deny the privileges and benefits it once enjoyed”, such as normalized trade relations and World Bank and International Monetary Fund borrowing privileges.
Earlier this week, the Treasury Department announced a ban on Russia using its frozen central bank assets to pay off its debt.
The official said the effect of the ban is that Moscow “will now have to find new sources of dollars outside the United States and find a new channel of payment, other than American banks, to avoid falling into default. “.
“It’s Russia’s choice as to how to proceed – even if Russia taps into other sources of hard currency to stay current on its debt obligations, which will mean fewer resources available to Putin. to finance his war machine”.
The official added that the United States would also sanction Mr. Putin’s two adult daughters – Maria and Katerina Purina – as well as Mr. Lavrov’s wife and children and members of the Russian Security Council.
Since the US and EU began imposing sanctions on Moscow following the invasion of Ukraine, more than 600 multinational companies have opted out of the Russian market in the face of the Western sanctions regime.
The official said the United States would seek to hasten the collapse of private sector economic activity in Russia by banning private investment in Russia.
“This will ensure that the mass exodus from Russia that we are seeing from the private sector…will continue, and without investment from our private sector, Putin will lose the private sector know-how and skills that travel with investment,” the official said. official, who added that the “repercussions” of the “ongoing brain drain” will be “profound”.
Altogether, the official said the combined effects of the US and European sanctions regime have significantly reduced Russians’ quality of life and predicted the decline would continue.
“The reality is that the country is sinking into economic, financial and technological isolation. And at this rate, it will return to the Soviet-style living standards of the 1980s,” he said.
“Putin himself has said that the sanctions will require deep structural changes to the Russian economy to deal with new realities, including inflation and unemployment – they were simply not prepared for their economic fortress to s collapses. And that’s what happened “.