U.S. Sanctions on Russia
In response to Russia’s invasion and attacks on Ukraine, the United States has imposed a number of sanctions against Russia as a form of punishment. On Feb. 24, the U.S. carried out several sanctions against Russia in an effort to weaken the country’s finances and economy.
As stated by the White House, the first sanction was severing the connection to the U.S. financial system for Russia’s largest financial institution, Sberbank, including 25 subsidiaries. This will restrict Sberbank’s access to transactions made in the dollar.
Second, there are full blocking sanctions on Russia’s second largest financial institution, VTB Bank, including 20 subsidiaries. Any of VTB’s assets that are touching the U.S. financial system will be frozen and U.S. persons will be prohibited from dealing with them.
Third, there will be another full block on three other major Russian Financial institutions: Bank Otkritie, Sovcombank OJSC, and Novikombank, and 34 subsidiaries. The assets of these institutions will also be frozen if they are touching the U.S. financial system, and U.S. persons will be prohibited from dealing with them. These institutions play a major role in the Russian economy and putting restrictions on them con result in loss of funds.
Fourth, new debt and equity restrictions on 13 of the most critical major Russian enterprises and entities. These enterprises and entities, with estimated assets of nearly $1.4 trillion, will not be able to raise money through the U.S. market.
A fifth sanction is that an additional full blocking sanction will be placed on Russin elites and their families. This sanction cuts them off from the U.S. financial system, freezes any assets they hold in the U.S. and blocks their travel to the United States.
The sixth sanction is indirectly against Russia, as it promises costs on Belarus for supporting further invasion of Ukraine.
The next sanction is a sweeping restriction on Russia’s military to strike a blow to Putin’s military and strategic ambitions. Measures will be taken to restrict exports of nearly all U.S. items and items produced using certain U.S.-origin software, technology, or equipment to targeted military end users.
Eighth, there will be Russia-wide restrictions placed to choke off their import of technological goods that are critical to a diversified economy and Putin’s ability to project power. These sustained controls will cut off Russia’s access to cutting edge technology.
With all of these sanctions in place to affect Russia’s economy, there are bound to be economic effects that have yet to be seen. Russia has one of the largest economies in the world, and should their economy suffer poorly, it could affect the rest of the world.
A New York Times article published in Jan. 29 discussed the possible ramifications that could occur should the promised sanctions come about. It said that these punishing sanctions cause severe inflation, a stock market crash and other forms of financial panic that could inflict pain on the Russian people.
Another possible consequence of these sanctions is that it could threaten the stability of the global financial system. It was also said that President Biden is not going to send American troops to defend Ukraine but is instead planning to take down the pillars of Russia’s financial system.