U.S. expands sanctions to prevent other countries from doing business with Moscow | Wilnesh News

The United States on Wednesday expanded sanctions on Russia as G7 leaders prepared for a summit in Italy where the top priority will be to increase support for Ukraine and dismantle Russia’s war machine.

Wednesday’s package targets Chinese companies that are helping Russia wage war in Ukraine and boosts stakes in foreign financial institutions that work with sanctioned Russian entities.

Since the war began, the United States has imposed sanctions on more than 4,000 Russian companies and individuals to stem the flow of funds and weapons to Moscow. Still, new companies are emerging as Russia attempts to restructure its supply chains.

“We have to be very honest with ourselves,” Aaron Forsberg, director of economic sanctions policy and implementation at the U.S. State Department, told The Associated Press. “Putin is a very capable adversary who is willing to adapt and find those who are willing to cooperate.” “

Sanctions against Russia are therefore a “dynamic event,” he said.

While the sanctions do not stop the flow of illegal goods, they are designed to make it more difficult for Russia to obtain key technologies and make goods more expensive. Wednesday’s package targets more than $100 million in trade between Russia and its war suppliers.

The more than 300 new sanctions are primarily aimed at preventing individuals and companies from China, the United Arab Emirates and Turkey, among others, from helping Moscow circumvent Western barriers to critical technology. They have also threatened foreign financial institutions with sanctions if they do business with nearly all sanctioned Russian entities, underscoring the U.S. view that the Kremlin has turned Russia’s economy toward a state of war.

Treasury Secretary Janet Yellen said the Russian military “desperately needs access to the outside world.”

The announcement came shortly before President Joe Biden arrived in Italy as he and other G7 leaders urgently considered aid to Ukraine, including converting frozen Russian assets into billions of dollars in support for Kyiv.

Seven Chinese and Hong Kong companies were targeted on Wednesday for shipping millions of dollars worth of materials to Russia, including items that could be used in Russian weapons systems.

U.S. officials say China is a major supplier of critical components to Russia, providing both Chinese and Western technology.

On Wednesday, the United States sanctioned a Chinese state-owned defense company that officials said shipped military equipment to the Russian defense sector.

Benjamin Hilgenstock, a senior economist at the Kyiv School of Economics, said the move sends a message that the United States is “willing to venture into more dangerous areas by increasing pressure on the Chinese government.”

“We will address (China’s) support for Russia’s defense industrial base. We will confront China’s non-market policies that are causing harmful global spillovers,” White House national security spokesman John Kirby told reporters on Tuesday.

China refrained from sanctioning Russia after President Vladimir Putin invaded Ukraine, and Putin concluded a visit to China in May to highlight the two countries’ burgeoning strategic relationship.

“The Chinese leadership is not interested in making these sanctions successful,” said Janis Kluge, an expert on Russian sanctions at the German Institute for International and Security Affairs (SWP) in Berlin.

Kruger said Beijing was unwilling to block a valuable trade worth a lot of money and “increase the pressure on Putin in this war.”

Imports from China are crucial for Russia because the country is a major producer of critical parts, including for Western companies. Chinese companies also act as middlemen in selling and shipping Western parts to Russia.

Hilgenstock said that although Chinese technology was found on the battlefield in Ukraine, most of the parts still came from Western countries, including the “vast majority” of those found in high-tech drones and ballistic missiles.

In addition to China, the United States has targeted companies in Turkey and the United Arab Emirates, which officials said have sent high-priority items to Russian companies, including those already under sanctions.

In December, the White House said foreign financial institutions could be subject to sanctions if they cooperate with entities in the Russian defense sector. Wednesday’s expansion of sanctions means the agencies could face sanctions if they cooperate with nearly any sanctioned Russian entity.

Analysts say the fear of triggering secondary sanctions is a valid threat.

While President Xi Jinping may not want to promote Western sanctions against Russia, Krueger said, “Chinese banks have been very careful not to become targets of secondary sanctions because that would be very costly,” noting the termination of cooperation by Chinese banks relationship case.

Wednesday’s package targets Russia’s financial infrastructure, including the Moscow Stock Exchange, in an attempt to limit the amount of money flowing into and out of the country.

It also aims to hinder the development of Russia’s energy sector and future sources of cash, including the Arctic LNG project, which already has key LNG technology shipped by a Chinese company.

Additionally, the program targets those involved in the forced transfer and deportation of Ukrainian children to Russia. Five people in Russia and Russian-occupied Ukraine have been sanctioned for their involvement in the forced militarization and re-education of children and providing them with Russian passports.