One year after Russia invaded Ukraine, the US, along with its allies, continues to impose sanctions and use every tool to isolate the country. To further target Russia economically, the US is planning to impose new export controls and a fresh round of sanctions, aiming to target Russia’s key industries.
Deputy Treasury Secretary Wally Adeyemo is planning to announce a crackdown on Russian attempts to circumvent sanctions imposed since the invasion of Ukraine last year in a speech to the Council on Foreign Affairs Tuesday. Adeyemo will make the case that the US has hampered Russia’s invasion plans, complicated its future economic prospects and can now further restrict Moscow’s access to assets in the 12 months ahead. This will include information and intelligence sharing across jurisdictions, as well as actions to counter evasion attempts.
Victoria Nuland, US Under Secretary of State, revealed that the sanctions package will target individuals, expand banking restrictions, and include measures to prevent evasion of existing sanctions, especially in third countries. The sanctions will deepen and broaden in certain categories where restrictions have been applied before, particularly in limiting technology to Russia’s defense industry.
The strain on Russia’s military can be seen through the government’s attempts to backfill equipment and supplies through third parties in permissive jurisdictions or sanctioned countries. In the upcoming weeks and months, Treasury intends to increase “its focus on countering sanctions evasion, including by targeting facilitators and third-country providers that may wittingly or unwittingly help Russia replenish the supplies and material it desperately needs to support its military.”
Adeyemo said that last year Russia suffered a budget deficit of $47 billion dollars, the second highest deficit the country has experienced in the post-Soviet era. Industrial production has declined in Russia for 9 straight months, and further actions will be taken to further decimate the Kremlin’s industrial base.
Nelson’s trip to the UAE and Turkey last month outlined how the department is working to “crack down” on Russian attempts to evade sanctions and export controls, as well as warn that there are consequences for working with sanctioned entities or not conducting proper due diligence.
Adeyemo’s remarks come on the heels of Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson’s trip to the UAE and Turkey last month.
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