President Joe Biden announced his most severe measures yet aimed at the Russian Federation and its leaders, but many Americans remain unclear as to how the US government is specifically working to deter Russia’s ongoing invasion of Ukraine.
Sanctions are typically some of the hardest-to-describe economic measures, as they are often focused on specific persons and entities who themselves do not make the same headlines as world leaders whose actions are often the motivation behind the measures.
Mr Biden gave a national address on Thursday announcing additional steps his administration would take against Russia, while warning that other penalties remained “on the table”.
Still more sanctions could be on the way. Democratic leaders, including progressives in the House and Senate, have been generally supportive of the White House’s moves so far, and congressional Republican leaders like Mitch McConnell are urging Mr Biden to go further in the days ahead. The White House has said itself that sanctions and other economic penalties will continue to escalate if the crisis does not cease.
Here’s what the president did, and didn’t do, following Russia’s historic attack against Ukraine early Thursday local time.
Russia’s financial institutions targeted
The most significant of the president’s actions this week involved sanctions targeting Russian banks, including SberBank and VTB, two major financial institutions who collectively control more than half of Russia’s banking assets, according to the US Treasury.
That’s a major step that will cut many Russians off from the financial spheres of the West, particularly if they do not already have accounts with foreign banks. Russian stocks dropped sharply on the news. Top officials at the banks themselves were targeted as well, including Alexander Aleksandrovich Vedyakhin, first deputy chairman of SberBank’s executive board.
Beyond the two major banks, dozens of subsidiary companies and credit institutions, such as Otkritie, were also targeted. The White House’s goal is to prevent many of these companies from doing any business or raising any money from western investors to stay afloat.
The energy sector doesn’t get off scot-free
Despite Mr Biden’s pledge on Thursday to protect Americans at the gas pump from higher fuel prices, Russia’s energy sector still felt the pinch from the White House, while other sectors saw more scrutiny.
Gazprom, the largest public natural gas company in the world, was on the list of sanctions Thursday. So too was Gazprom Neft, the state-owned company’s oil production and refining arm, as well as Transneft, which owns pipelines across the Russian Federation.
The US sanctions even hit at least one energy company not affiliated with Russia’s fossil fuel exports, RusHydro, which operates more than 20 hydroelectric power plants across the country.
Elites connected to Putin feel the squeeze
Financial institutions were far from the Treasury Department’s only targets on Thursday; specific members of Vladimir Putin’s inner circle, including some whose connections to the Russian financial sector were less clear, were on the list of entities seeing their assets come under sanction.
Among those elites were Andrey Patrushev, son of the secretary of the Russian Federation Security Council, as well as Ivan Igorevich Sechin, son of one of Russia’s top oil magnates. The Biden administration’s willingness to target family members of Mr Putin’s allies was apparent throughout Thursday’s announcement, and others named in the sanctions had family members sanctioned as well.
Russia’s doorstep: Belarus hit with sanctions
While the Belarusian government has largely escaped the same negative press that Russia has received in the weeks leading up to the invasion of Ukraine, it did not see the same fortune on Thursday when the White House announced action against Moscow and its allies.
As an authoritarian government aligned with Moscow on the border of both Russia and Ukraine, Belarus served as an important staging area for Russian forces prior to the invasion which began early Thursday morning. As such, the country was hit with withering sanction measures from the US Treasury Department that targeted two of its state-owned banks, with three other Belarusian banks falling under other, previous sanction announcements.
Ten other Belarusian companies involved in the nation’s defence industry, as well as a handful of executives linked to them, were also sanctioned. Two security officials in the Alexander Lukashenko government were sanctioned, as was Aliaksandr Mikalaevich Zaitsau, a former government official who now owns a gold-mining company.
“Having already sacrificed its legitimacy to suppress the democratic aspirations of the Belarusian people, the Lukashenka regime is now jeopardizing Belarus’s sovereignty by supporting Russia’s further invasion of Ukraine,” warned Treasury Secretary Janet Yellen.
So ... who’s left?
There’s one big name that escaped a sanctions notice on Thursday whose exclusion was immediately noticed by Washington reporters: The Russian president himself.
Mr Biden was asked directly, and repeatedly, at Thursdays press conference why Mr Putin was not on the list. The US president didn’t respond. He also gave little indication of what further sanctions his administration was considering in the days ahead, only stressing that more sanctions were on the way if the crisis did not end.
Mr Biden also declined to call for Russia to be banned from SWIFT, the cooperative effort overseen by the National Bank of Belgium that serves to message financial institutions when financial transactions occur. Kicking Russia out would make it a lot harder, if not impossible, for many transactions between Russian businesses and the West.
"It is always an option," Mr Biden said of that possibility on Thursday, "but right now it's not the position that the rest of Europe wishes to take."
Finally, there’s the rest of Russia’s energy sector. While Gazprom was hit with sanctions on Thursday, the vast majority of Russia’s fossil fuel companies were not. Russia remains a major oil and natural gas producer, and controls a share of about 8 per cent of the US gasoline market. Even that small share could majorly disrupt US markets and those in other countries should the supply dry up.
Those companies are likely to be the last on the list to be hit with US sanctions in the days ahead should the crisis continue, Mr Biden said on Thursday.
“Our sanctions package is specifically designed to allow energy payments to continue,” he explained.
