The Biden administration has announced further sanctions against Russia’s central bank, including a ban on Americans doing business with the bank and a freeze on the bank’s assets in the US as a result of the invasion of Ukraine.
The Russian Federation’s National Wealth Fund and the Russian Federation’s Ministry of Finance will also be targeted by the new sanctions.
The fresh penalties will take effect immediately, according to a senior Biden administration source who spoke on the condition of anonymity in order to convey Washington’s thinking.
“We wanted to put these actions in place before our markets open because what we learned over the course of the weekend from our allies and partners was the Russian Central Bank was attempting to move assets and there would be a great deal of asset flight starting on Monday morning from institutions around the world,” the official said, on a conference call with reporters.
“Our strategy to put it simply is to make sure that the Russian economy goes backward. As long as President Putin decides to go forward with his invasion of Ukraine,” the official added.
The U.S. is also adding Kirill Dmitriev, another ally of Russian President Vladimir Putin, to the sanctions list as well as the direct investment fund Dmitriev heads. The Russian Direct Investment Fund, or RDIF, is officially a sovereign wealth fund but is widely considered a slush fund for Putin.
The official said the U.S. expects its allies to take similar steps in the coming days.
This comes after the U.S. and its allies announced over the weekend that they will impose restrictive measures aimed at preventing Russia’s central bank from deploying its international reserves in ways that may undermine sanctions.
“No country is sanctions-proof and Putin’s war chest of $630 billion in reserves only matters if he can use it to defend his currency,” a second senior administration official said Monday.
The U.S. and its allies have imposed a deluge of severe sanctions on Russia in recent weeks in a unified effort to keep economic pressure on the Kremlin.