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Biden’s new sanctions against Russia: Blocking more banks and cutting off tech imports, but no SWIFT move

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By Victor Reklaitis

President Joe Biden on Thursday warned of economic pain for Russia, as he unveiled additional U.S. sanctions against the country in response to its invasion of Ukraine.

“I’m authorizing additional strong sanctions and new limitations on what can be exported to Russia. This is going to impose severe costs on the Russian economy, both immediately and over time,” Biden said during a brief speech at the White House.

“We have purposely designed these sanctions to maximize the long-term impact on Russia and to the minimize impact on the United States and our allies,” he added.

The new sanctions include:

  • Blocking Russia’s largest bank, Sberbank , and four other major Russian financial institutions — VTB Bank , Otkritie, Novikombank and Sovcombank. “Every asset they have in America will be frozen,” Biden said. The U.S. now has sanctioned Russian banks that together hold around $1 trillion in assets, according to the president. The U.S. Treasury Department said in a release that Sberbank faces “correspondent and payable-through account sanctions,” and it has imposed “full blocking sanctions” on VTB Bank.

  • Prohibiting Russia’s state-owned enterprises from raising money from U.S. or European investors. Biden noted the Russian government already had been stopped from raising money from those investors, and now the same restrictions will be applied to Russia’s largest state-owned enterprises, which are companies with assets that exceed $1.4 trillion. They include natural-gas giant Gazprom and telecom company Rostelecom /zigman2/quotes/206436054/delayed ROSYY -71.14% , according to the U.S. Treasury Department.

  • Cutting off more than half of Russia’s high-tech imports.

  • Adding names to the list of Russian elites and their family members who are personally sanctioned.

“We will limit Russia’s ability to do business in dollars, euros, pounds and yen to be part of the global economy,” Biden said.

Biden had promised ahead of his speech to impose “ severe sanctions ” following Russian President Vladimir Putin’s decision on Thursday to launch a full-scale invasion of Ukraine. The latest measures come after a first tranche of sanctions announced on Tuesday that targeted two Russian banks, the country’s sovereign debt and some individual Russian elites.

Analysts had said the latest sanctions could include kicking Russia out of the SWIFT payment network. SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is a payments-related messaging service that helps banks worldwide execute financial transactions. But the U.S. and its allies so far have stopped short of taking that step.

Biden said a move on SWIFT remains an option but suggested there is some European resistance, when asked about the issue by reporters following his speech.

“The sanctions we imposed exceed SWIFT,” he also said.

The U.K. set out additional sanctions against Russia earlier Thursday, and Germany on Tuesday halted Russia’s key Nord Stream 2 natural-gas pipeline

Meanwhile, China’s customs agency on Thursday approved imports of wheat from all regions of Russia, giving Putin an alternative to Western markets that might be closed under possible sanctions, the Associated Press reported .

Stocks worldwide /zigman2/quotes/211618636/realtime XX:ADOW +0.40% /zigman2/quotes/210599654/delayed XX:SXXP +0.98% plunged Thursday, as traders reacted to  Putin’s decision to undertake a large-scale invasion of Ukraine , though U.S. equities went on to erase losses and closed higher. Oil prices CL00 soared.

US : U.S.: OTC
$ 1.01
-2.49 -71.14%
Volume: 0.00
March 3, 2022 3:20p
P/E Ratio
Dividend Yield
Market Cap
Rev. per Employee
XX : Dow Jones Indices
+13.01 +0.40%
Volume: 0.00
March 21, 2023 1:14a
+4.29 +0.98%
Volume: 0.00
March 20, 2023 11:03p

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