Explainer: how the US could tighten sanctions against Russia?

Plastic letters arranged to read “Sanctions” are placed in front of the US and Russia flag colors in this illustration, taken Feb. 28, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Register now for FREE unlimited access to Reuters.com

WASHINGTON, May 8 (Reuters) – The United States has imposed several series of sanctions on Russia over its February invasion of Ukraine, targeting the central bank, major lenders, oligarchs and Russian President Vladimir Putin.

Here are some ways the United States could further increase sanctions against Russia.

The European Union executive on Wednesday proposed the toughest package of sanctions yet against Moscow for its war in Ukraine, including a planned embargo on Russian oil. read more

Register now for FREE unlimited access to Reuters.com

Diplomats said the talks were complex, but many expressed confidence that all 27 EU governments could agree by next week.

Edward Fishman, who worked at the State Department on sanctions against Russia during President Barack Obama’s administration, said the EU’s move towards an oil embargo opens up possibilities for what Washington and its allies can do next. .

“I think the next step will be for the United States to work with the EU and the rest of the G7 to globalize that campaign against Russian oil sales,” Fishman said.

Some of the measures the West could impose to prevent Russia from receiving payments for oil include requiring all payments for Russian oil to be deposited in escrow accounts outside Russia and setting a price cap on what Russian oil can be sold. paid, backed by the threat of secondary sanctions, Fishman said.

Another option would be for the EU to impose tariffs on Russian oil, Fishman said.

Brian O’Toole, a former Treasury Department official who now works at the Atlantic Council think tank, said the United States could also ban the provision of insurance for Russian oil shipments and threaten secondary sanctions against any foreign person who carries out a significant transaction involving a Russian cargo. ship.

He said such a move would “greatly complicate Russia’s ability to transport oil elsewhere”.

The United States could also tighten energy-related sanctions further by adding major companies such as oil giant Rosneft or gas producer Gazprom to the list of Specially Designated Nationals (SDN).

Experts have said the United States could also extend its sanctions against Russian banks and state-owned companies.

The United States has imposed sanctions on major Russian banks, including Sberbank, the country’s largest lender.

Washington could further target Gazprombank and others, O’Toole said, taking Washington’s most powerful sanctions tool and adding them to the SDN list.

Such a move would effectively kick them out of the US banking system, ban their trade with Americans and freeze their US assets.

“Apart from Gazprombank, there is nothing more of strategic importance in the banking world in Russia. So, frankly, if they were to do Gazprombank separately, I think the move after that would just be a complete financial embargo,” O’Toole said.

A total financial embargo on Russia would likely be implemented through the issuance of a new executive order that would prohibit Americans from exporting or importing goods, services or technologies to or from Russia, O’Toole said.

“Then Russia becomes Iran,” he said.

The United States could also enforce secondary sanctions against designated Russian entities and individuals, which would pose a threat to anyone in the world transacting with Russia, Fishman said.

In early March, the EU named seven banks it would exclude from SWIFT, the world’s main international payment network, including Russia’s second largest bank, VTB. However, the lenders handling energy payments were spared. read more

The United States and its allies could tighten those restrictions further, blocking more or all Russian banks’ access to SWIFT.

The EU’s latest round of sanctions proposes to cut Sberbank off from SWIFT.

The United States could impose sanctions on Russian oligarchs who are not yet targeted, perhaps by aligning their measures with the EU and the United Kingdom, which have targeted several Russian oligarchs not yet designated by Washington.

They include billionaire Roman Abramovich and tycoon Mikhail Fridman.

In his March State of the Union address, Biden said the United States would work to seize the yachts, luxury apartments and private jets of wealthy Russians with ties to Putin.

Register now for FREE unlimited access to Reuters.com

Reporting by Daphne Psaledakis; Additional reporting by David Lawder, Andrea Shalal, Doina Chiacu, Alexandra Alper and Karen Freifeld; Editing by Mary Milliken, Jonathan Oatis and Daniel Wallis

Our standards: The Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.