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Biden administration strengthens sanctions on Russia, target financial backers of war effort

by Nate Ostiller and The Kyiv Independent news desk December 22, 2023 4:11 PM 2 min read
U.S. President Joe Biden speaks in the Roosevelt Room of the White House in Washington, DC, US, on Wednesday, Dec. 6, 2023. (Yuri Gripas/Abaca/Bloomberg via Getty Images)
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U.S. President Joe Biden signed a new executive order on Dec. 22 that will strengthen the U.S.' sanctions against Russia while also targeting financial institutions that help support Russia's war effort, the White House said in a press release.

The move comes days after the EU adopted its 12th round of sanctions against Russia, which included a ban on Russian diamonds, a crackdown on Russia's means to acquire military-use goods, tighter controls over the $60-per-barrel oil price cap, and further steps targeting Moscow's revenue amid the all-out war.

The White House said the executive order expands sanctions authority over any financial institutions "determined to have conducted or facilitated any significant transactions...or provided any services" for already sanctioned individuals or companies involved in Russia's military-industrial complex.

In addition, the executive order will ban the export of Russian diamonds. In line with the EU sanctions, the move will ban the export of any diamonds originating in or manufactured in Russia, regardless of whether they were subsequently processed in a third country.

A similar measure will apply to seafood from Russian water territorial waters or fished by Russian vessels.

In an op-ed for the Financial Times, Deputy Treasury Secretary Wally Adeyemo wrote that the executive order "makes clear that those financing and facilitating the transactions of goods that end up on the battlefield will face severe consequences."

"Today we are taking steps to level new and powerful tools against Russia’s war machine," said Treasury Secretary Janet Yellen on Dec. 22. "And we will not hesitate to use the new tools provided by this authority to take decisive and surgical action against financial institutions that facilitate the supply of Russia’s war machine.”

Essentially, the intention of the measures taken against financial institutions or front companies involved in helping support Russia's war machine is to create a "stark choice."

"Stop all transactions from customers selling critical goods, or ensure these goods are not benefiting Russia’s war machine. Otherwise, you risk losing access to the US financial system," said Adeyemo.

He also added that the measures would apply even to unwitting financial partners, putting the onus on financial institutions and exporters in third-party countries to preemptively prevent any potential collaboration with Russia's military-industrial complex.

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