Biden Authorizes New Sanctions Against Russia

The U.S. will freeze all Russian assets starting Thursday, President Joe Biden said, announcing a series of sweeping sanctions on Russia following its invasion of Ukraine.

“This is going to impose severe cost on the Russian economy, both immediately and over time,” Biden said at a press conference.

The sanctions include freezing “every asset they have in America.” The U.S. will impose correspondent and payable-through account sanctions to Sberbank (ticker: SBRCY), the largest Russian financial institution, and its 25 subsidiaries. The government also posed full blocking sanctions on four other major banks and subsidiaries, including VTB Bank ( RU:VTBR), the second–largest Russian bank. The move is designed to cut off access to the dollar, with the U.S. Treasury estimating that it targets nearly 80% of all banking assets in Russia.

The U.S. will also freeze the assets of Russian elites and their family members.

On Tuesday, the U.S. stopped the Russian government from raising money on its markets by imposing debt and equity restrictions. The new sanctions tighten these restrictions, and extend the ban to the country’s largest state-owned enterprises.

The U.S. will also restrict exports of U.S. military items and other sensitive technology that is crucial for Russian defense. This includes restrictions on semiconductors, telecommunication, encryption security, lasers, sensors, avionics, and maritime technologies, the White House said in a fact sheet distributed after the press conference. Biden said the economic sanctions could cut off more than half of Russia’s high-tech imports, striking a blow to Russia’s ability to modernize their military and aerospace industry.

The sanctions package was “specifically designed to allow energy payments to continue,” Biden said. Indeed, the White House didn’t make any mention of oil or energy sanctions, but the administration was “closely monitoring energy supplies for any disruption.” Biden promised to release additional barrels of oil from U.S. reserves to avoid a spike in energy prices.

The package also includes humanitarian relief for refugees of the conflict.

The president reiterated that American troops “are not and will not be engaged in a conflict with Russia in Ukraine,” but were mobilizing to defend NATO allies and reassure allies in the East. If Russia moved into NATO countries, the U.S. would get involved, Biden added, while stressing that Putin would be emboldened if the international community failed to act quickly.

The U.S. was also prepared to respond if Russia pursued cyberattacks against U.S. companies, Biden said.

Biden emphasized that the sanctions are being imposed in conjunction with U.S. allies, which represent “more than half the global economy.” The multilateral nature of the sanctions could restrict more than $50 billion in key inputs to Russia, the White House said.

The U.K. also unveiled a series of sanctions against Russia on Thursday. The sanctions include freezing the assets of all major Russian banks and excluding them from the U.K. financial system; blocking Russian companies and the state from raising funds or borrowing money on British markets; and freezing assets for 100 new individuals or entities, among others. Prime Minister Boris Johnson is also pushing to end Russia’s use of the Swift international payments system.

This last request has faced pushback from some key allies, including Germany. During the press conference, Biden dismissed the idea of blocking Russia’s use of the Swift system, saying it was “always an option” but the sanctions imposed exceeded the consequences of shutting Russia out of the global payment system, and most of Europe was still reluctant about taking the position at the moment. Ukrainian foreign minister Dmytro Kuleba urged European and U.S. leaders to ban Russia from Swift.

“I will not be diplomatic on this,” he tweeted on Thursday. “Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too.”

Both the U.K. and the U.S. sanctioned Belarus for its role in supporting a further invasion of Ukraine.

“We call on Belarus to withdraw its support for Russian aggression in Ukraine,” the White House said in a statement.

Canada announced similar sanctions on Thursday, targeting 62 Russian individuals and banks, and ceased all export permits for Russia and canceling existing permits.

Earlier in the day, Biden met with his National Security Council in the White House Situation Room to discuss his response to the crisis. The meeting was followed by a virtual discussion about the invasion with G-7 leaders, which lasted for more than an hour.

On Tuesday, Germany halted the Nord Stream 2 gas pipeline, an $11 billion project that was set to double Russian gas exports to Germany.

The Russian invasion, which Biden called a premeditated, brutal assault, effectively dissipated any hopes that the conflict in Ukraine could be resolved diplomatically.

“There is a complete rupture right now in U.S.-Russian relations if they continue on this path that they’re on,” Biden said.

The invasion prompted swift bipartisan condemnation from Congress, with most legislators calling for severe sanctions ahead of the president’s remarks on Thursday.

“It is important Congress unite to punish and crush Putin and his cronies,” tweeted Sen. Lindsey Graham ahead of Biden’s speech. Graham added that he had informed the Deputy Secretary of State Wendy Sherman that there was broad support for emergency supplemental aid for the Ukrainian people and military. There was also bipartisan support for sanctions in the energy sector.

Former President Donald Trump called the invasion “a very sad thing for the world” Wednesday night, a day after saying Putin’s recognition of the Luhansk and Donetsk region was genius and a savvy move. Trump added that the invasion wouldn’t have happened under his administration. Some Republicans have echoed the criticism, saying Biden should have imposed stronger sanctions before the invasion.

“Biden gave him the green light by saying the U.S. is not going to war with Russia and will remain united with and only defend its NATO member nation allies,” wrote Republican Rep. Marjorie Taylor Greene in a tweet on Thursday.

House Majority Speaker Nancy Pelosi defended the administration’s decision not to impose stronger pre-invasion sanctions at a press conference on Wednesday, saying that the sanctions imposed earlier this week were a result of a unified effort from NATO allies, many who will sustain an outsized impact from sanctions.

“I think it made sense not to–to enforce those sanctions before Russia invaded,” added Adam Schiff, the House intelligence committee chair. “If you do that, then Russia loses its disincentive. It figures: ‘Well, we’ve already been sanctioned, we might as well go forward.'”