The United States is taking additional steps to ratchet up economic pressure on Russia and President Vladimir Putin following horrific footage from the Ukrainian city of Bucha, announcing new sanctions Wednesday on Russian financial institutions as well as some people, including adult daughters. of Putin and the wife and daughter. of his chancellor.
“Today we are dramatically escalating the financial impact by imposing full lockdown sanctions on Russia’s largest financial institution, Sberbank, and its largest private bank, Alfa Bank,” a senior administration official told reporters.
Sberbank owns almost a third of the total assets of Russia’s banking sector, the official noted, adding that the US has now completely blocked “more than two-thirds of the Russian banking sector.”
Second, the senior official announced: “In line with the G7 and the EU, we announce a ban on new investment in Russia.” That will be implemented with an executive order signed by the President of the United States, Joe Biden.
The administration is also imposing full blockade sanctions on a new group of Russian elites and their relatives, including Putin’s adult daughters Mariya Putina and Katerina Tikhonova, the wife and daughter of Foreign Minister Sergey Lavrov, and members of the Security Council. of Russia, 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 relatives and more than 400 Russian government officials, the senior official said.
The United States will also apply full blocking sanctions on major critical Russian state-owned companies, to be announced by the Treasury Department on Thursday. The official also highlighted Tuesday’s announcement that the Treasury Department has blocked Russia from making debt payments with dollars stored in US banks.
The senior official pointed to the crippling effect of US measures on the Russian economy since its invasion of Ukraine.
“Russia’s GDP is projected to shrink by double digits this year… It is not in the process of being isolated as a pariah state. The IMF (International Monetary Fund) projects that this year’s economic shock 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 tried to underscore the effect they are having on life in Russia, saying Putin will eventually have to deal with his people.
“Even an autocrat like Putin has a social contract with the Russian people. He took away their freedom in exchange for promising them stability and that is why he is not giving them stability,” the official said.
“The question is really not so much: What can we do and when will it take effect? I think it is: What is the end game here for Putin? What is he playing for? the official added. “This is clearly becoming a failure for him and at some point he’s going to have to acknowledge that reality.”