The United States imposed an array of sanctions Thursday on Russia's two largest financial institutions and multiple individuals linked to the Kremlin after Moscow's invasion of Ukraine, the Treasury Department said.
The sanctions imposed by the Treasury's Office of Foreign Assets Control (OFAC) target the core infrastructure of the Russian financial system, including Russia's two largest banks and almost 90 financial institution subsidiaries around the world.
"Treasury is taking serious and unprecedented action to deliver swift and severe consequences to the Kremlin and significantly impair their ability to use the Russian economy and financial system to further their malign activity," Secretary of the Treasury Janet L. Yellen wrote in a statement. "Our actions, taken in coordination with partners and allies, will degrade Russia's ability to project power and threaten the peace and stability of Europe.
"We are united in our efforts to hold Russia accountable for its further invasion of Ukraine while mitigating impacts to Americans and our partners. If necessary, we are prepared to impose further costs on Russia in response to its egregious actions."
Treasury is taking unprecedented action against Russia's two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate.
Within 30 days, OFAC is requiring all U.S. financial institutions to close any Sberbank correspondent or payable-through accounts and to reject any future transactions involving Sberbank or its foreign financial institution subsidiaries. Payments that Sberbank attempts to process in U.S. dollars for its clients — with examples ranging from to technology to transportation — will be disrupted and rejected once the payment hits a U.S. financial institution.
OFAC has imposed full blocking sanctions on VTB Bank, Russia's second-largest financial institution, which holds nearly 20% of banking assets in Russia. VTB Bank is majority-owned by the GoR, which deems it to be a systemically important financial institution. This will sever a critical artery of Russia's financial system. By imposing these sanctions, assets held in U.S. financial institutions will be instantly frozen and inaccessible to the Kremlin.
"This is one of the largest financial institutions Treasury has ever blocked and sends an unmistakable signal that the United States is following through on its promise of delivering severe economic costs," the Treasury wrote in a statement.
OFAC has also imposed blocking sanctions on three additional major Russian financial institutions: Otkritie, Novikom, and Sovcom. These three financial institutions play significant roles in the Russian economy, holding combined assets worth $80 billion.
In a move to limit Russia's ability to finance its invasion against Ukraine or other priorities of President Vladimir Putin, OFAC expanded Russia-related debt and equity restrictions to additional key aspects of Russia's economy, prohibiting transactions and dealings by U.S. persons or within the United States in new debt of longer than 14 days maturity and new equity of Russian state-owned enterprises, entities that operate in the financial services sector of the Russian Federation economy, and other entities determined to be subject to the prohibitions in this directive.
Among the elites sanctioned by the Treasury:
- Sergei Sergeevich Ivanov, son of Sergei Borisovich Ivanov
- Andrey Patrushev, son of Nikolai Platonovich Patrushev
- Ivan Igorevich Sechin, son of Igor Ivanovich Sechin
- Alexander Aleksandrovich Vedyakhin, first deputy chairman of the executive board of Sberbank
- Andrey Sergeyevich Puchkov and Yuri Alekseyevich Soloviev, two high-ranking VTB Bank executives who work closely with VTB Bank Chief Executive Andrei Kostin
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