Jacked-Up Russia Sanctions to Focus on Finance, IT

The United States is working with allies and partners to quickly impose even more severe economic costs on Moscow over "sham" referendums held by Russia in occupied regions of Ukraine, according to prepared remarks from the U.S. State Department's head of sanctions coordination Wednesday.

James O'Brien, in testimony prepared for the Senate Foreign Relations Committee, said he expects that the Biden administration's pace of announcing sanctions on Russia on average every six weeks will continue, as Washington continues to focus on choke points in the Russian economy and its military supply chains.

"There will be more packages. We are working on more sanctions," O'Brien told the committee.

"Everything is on the table," he said, adding that Washington would look to the financial sector and high technology, especially for energy exploitation, and human rights violators.

Moscow was poised on Wednesday to annex a swath of Ukraine, releasing what it called vote tallies showing support in four partially occupied provinces to join Russia, after what Kyiv and the West denounced as illegal sham referendums held at gunpoint.

Russian-backed authorities claim to have carried out the referendums over five days on territory that makes up around 15% of Ukraine.

The United States has imposed several tranches of sanctions targeting Moscow following Russia's invasion of Ukraine in February, which has reduced cities to rubble and killed or wounded thousands.

But senators pressed O'Brien and Elizabeth Rosenberg, Treasury Assistant Secretary for Terrorist Financing and Financial Crimes, on U.S. sanctions on Russia's energy sector.

Washington and its G7 partners have said they will put a price cap on Russian oil in place, but has held back from directly targeting major Russian energy companies over concerns about energy prices and supply.

"The largest source of hard currency that Russia has now is from energy sales," Rosenberg said.

"It's in energy where we must focus our attention in order to deny Russia that revenue."

O'Brien warned that it was time for India, which has been buying large amounts of Russian oil, more than it did before the Feb. 24 invasion, to reconsider where it's positioning itself geopolitically.

While India's purchases have been at discounts, the heavy volumes have been helping Moscow's economy. The United States and other G7 countries hope India will join a plan to place a price cap on Russian oil by December to further decrease Moscow's revenues from oil exports, which help fund its war machine.

O'Brien also said Washington will continue working with China to ensure it understands U.S. sanctions and the effect they have on China's engagement with Russia.

As Western nations have shunned Russia, it has put emphasis on cooperation with China. The two nations have increased their trade and Russian companies have started issuing debt in yuan.