While the measures expand the scope of the U.S. sanctions program, the Biden administration has so far refrained from imposing sanctions on Chinese or European banks it believes are helping Russia. The new measures do not prevent banks from facilitating transactions related to Russia’s energy exports, which the Biden administration has allowed to continue out of fear that restricting them could stoke inflation.
Announcing the sanctions, Treasury Secretary Janet L. Yellen said in a statement that “Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world.”
At the heart of the measures is an expansion of “secondary” sanctions that give the United States the power to blacklist any bank in the world that does business with Russian financial institutions already hit by sanctions. This is intended to dissuade smaller banks, especially in places like China, from helping Russia finance its war effort.
The Treasury Department also imposed restrictions on the Moscow Stock Exchange in hopes of preventing foreign investors from backing Russian defense companies. The sanctions hit several Chinese companies accused of helping Russia access critical military equipment such as electronics, lasers and drones.
In addition to the Treasury Department’s measures, the State Department imposed sanctions on approximately 100 entities, including companies “engaged in developing Russia’s future energy, metals, and mining production and export capacity.” And the Commerce Department announced its own set of restrictions, banning American exports to some Hong Kong addresses that the United States says are being used to create shell companies to funnel banned goods to Russia.
