President Joe Biden (L) and President Vladimir Putin.
The Biden government on Thursday imposed a series of new sanctions on Moscow for alleged interference in the 2020 elections, a colossal cyberattack against US government and corporate networks, illegal annexation and occupation of Crimea, and human rights violations.
“Today the US Treasury Department (OFAC) took extensive action against 16 companies and 16 people who, on the instructions of the leadership of the Russian government, tried to influence the US presidential election in 2020,” the Treasury Department said in a statement.
It also announced sanctions against five people and three organizations related to Russia’s annexation of the Ukrainian Crimean peninsula and human rights violations.
In addition to the extensive sanctions imposed by the Treasury Department, the State Department announced that it would expel ten officials from Russia’s diplomatic mission in the United States.
The sanctions come after President Joe Biden’s phone call this week with Russian leader Vladimir Putin and as a Russian force near the Ukrainian border.
Washington officially accused Russia’s Foreign Intelligence Service (SVR), its top spy agency, of being behind the SolarWinds cyberattack published late last year, which Microsoft President Brad Smith called “the largest and most sophisticated attack the world has ever seen.” has been designated.
“The US intelligence community has great confidence in their assessment of the attribution,” the Treasury Department press release said. In the attack, hackers gained access to the software, which was used by thousands of government agencies and companies.
The penalties are also in response to a March report by the U.S. intelligence director that Putin completed authorized attempts to interfere in the 2020 election on behalf of former President Donald Trump.
The Russian government denies all allegations.
Biden also signed an executive order on Thursday that will allow Washington to sanction any sector of Moscow’s economy, greatly expanding the scope of sanctions authorities.
Under this new approval, US financial institutions will be banned from conducting transactions in the primary market for new ruble or non-ruble bonds issued after June 14th.
“Removing US investors from the primary market creates a broader chill effect,” said a senior administrator, who spoke on condition of anonymity.
“What you see is that Russia’s borrowing costs are rising, you see that there is capital flight and you see that the currency is weakening at the same time. And you know that this has an impact on Russia’s growth rate and an impact on Russia’s inflation rate Has.” Official added.
“The President has signed this comprehensive new authority to counter the persistent and growing malicious behavior of Russia,” Finance Minister Janet Yellen said in a statement welcoming the move.
“The Treasury Department is using this new authority to impose costs on the Russian government for its unacceptable behavior, including restricting Russia’s ability to fund its activities and targeting Russia’s malicious and disruptive cyber capabilities,” she added.
One of the people named in the new actions is Konstantin Kilimnik, a Russian agent with ties to former Trump campaign leader Paul Manafort, who was convicted in the special investigation of Robert Mueller’s investigation into Russia’s interference in the 2016 election.
The FBI is offering $ 250,000 for information leading to the arrest of Kilimnik, who is believed to be in Russia. Moscow prohibits extradition of a Russian citizen to any country.
Another senior administration official who refused to be named said the White House still hopes for a “stable and predictable relationship” with Russia.
“We also want to make it clear that we do not wish to be in an escalation cycle with Russia. We intend that these responses be proportionate and tailored to the specific past activities, pathways and actions that Russia has taken,” he said Officer.
Administrative officials refused to speculate on possible retaliatory measures Moscow would take following the sweeping sanctions.
US-Russia relations worsening
Taking a tougher stance on Russia was one of Biden’s foreign policy election promises. The measures announced on Thursday join a series of past measures: the Obama administration’s debt financing restrictions on large Russian companies like Rosneft and the Trump administration’s ban on US companies buying foreign currency government bonds.
“Today’s US sanctions continue the general trend of deterioration in relations since the annexation of Crimea,” Maximilian Hess, head of political risk at London-based consultancy Hawthorn Advisors, told CNBC.
“The bulk” of these sanctions, he said, “is the Russian government’s blocking of US companies from the primary market in ruble-denominated debt.”
Hess noted, however, that this “will not have much of an impact, especially given Russia’s manageable debt burden”.
For Timothy Ash, Senior Emerging Markets Strategist at Bluebay Asset Management, the measures are anything but tough.
“It’s like boys, come on, you’ve got to do better,” Ash wrote in a note following the announcement.
“Sovereign Primary still allows US companies to hold this debt. So US institutions cannot buy Russian government bonds on the primary issue, but can get their Russian bank friends to buy them for them in the primary, give them a fee and them then in the secondary. “
The ruble reduced some of its losses against the greenback on Thursday shortly after the sanction news, trading at 76.3025 against the dollar at 4 p.m. local time, compared to 77.0718 just before the details of the sanctions were released.
Build up of Russian troops on the Ukrainian border
Ukrainian soldiers work with Russia-backed separatists near Lysychansk, Lugansk region, on their tank near the front line on April 7, 2021.
Photo by STR / AFP via Getty Images
Tuesday’s Biden-Putin call, at least the second between the two men since Biden took office in January, comes as the United States and other western countries tire of Russia’s growing military build-up on the border with Ukraine, where there are dozens has amassed thousands of troops and tanks.
“We are now seeing the largest concentration of Russian armed forces on the borders of Ukraine since 2014,” said Foreign Minister Antony Blinken on Tuesday after visiting the NATO headquarters in Brussels. “This is a deep concern not only for Ukraine, but also for the US.”
Regional experts say this move could be an attempt to test Biden’s skills and intimidate Ukraine. The more pessimistic outlook suggests that the goal is to incite Ukraine into renewed conflict.
In a telephone conversation with Putin, Biden emphasized “the unwavering commitment of the United States to the sovereignty and territorial integrity of Ukraine,” according to a reading by the White House.
Biden suggested holding a summit somewhere outside the US and Russia “to discuss the full range of problems the countries are facing”.
The Kremlin said in a statement later Tuesday that Biden had “suggested considering the possibility of holding a face-to-face summit in the foreseeable future.”
– Natasha Turak from Dubai contributed to this story, and Amanda Macias from Washington, DC
Correction: This story has been updated to correct the description of the Hawthorn Advisors.