New U.S. Sanctions Target Russian Defense Industry, Gold Imports

U.S. Treasury Secretary Janet Yellen

The United States on June 28 imposed sanctions on 70 entities, including Russian defense firm Rostec, and 29 individuals in a move that it said aimed to "strike at the heart of Russia’s ability to develop and deploy weapons."

The new sanctions, which also ban imports of Russian gold, were announced by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and they implement agreements reached during the Group of Seven (G7) summit this week.

Treasury Secretary Janet Yellen said in a statement that the United States reaffirmed its commitment to work with partners and allies “to impose additional severe sanctions in response to Russia’s war against Ukraine.”

“Broad multilateral commitments and actions by G7 members this week further cut off the Russian Federation’s access to technology that is critical to their military,” Yellen said. “Targeting Russia’s defense industry will degrade [President Vladimir] Putin’s capabilities and further impede his war against Ukraine, which has already been plagued by poor morale, broken supply chains, and logistical failures.”

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The sanctions on Rostec announced on June 28 build on previously announced sanctions against the state aerospace and defense conglomerate. The Treasury Department said that Rostec's "management umbrella includes more than 800 entities across a wide range of sectors" and that all entities owned 50 percent or more by Rostec are blocked.

This includes United Aircraft Corporation, the maker of Russia's MiG and Sukhoi fighter jets. The Treasury Department said this aims to "weaken Russia's ability to continue its aerial assault on Ukraine."

The ban on gold imports, which the Treasury Department said is Russia's biggest nonenergy export, was also agreed by Britain, Canada, and Japan during the G7 summit.

In addition to targeting Rostec and other industries critical to the defense sector, the sanctions take aim at military units and officers implicated in human rights abuses in Ukraine, the OFAC said.

The Treasury Department's enforcement arm also issued a joint alert with the U.S. Department of Commerce’s Bureau of Industry and Security advising vigilance against Russian and Belarusian export control evasion, the statement said.

Separately, the U.S. State Department announced visa restrictions on more than 500 military officers "for threatening or violating Ukraine’s sovereignty, territorial integrity, or political independence."

The department has also taken steps to impose visa restrictions on 18 Russian nationals in relation to the suppression of dissent, including politically motivated detentions, Secretary of State Antony Blinken said in a statement.

Washington is also increasing tariffs on more than 570 groups of Russian products worth approximately $2.3 billion.

The U.S. Commerce Department took complementary actions, adding several entities to its so-called Entity List for continuing to do business with Russia even after its invasion of Ukraine.

The additions to the Entity List "demonstrate the United States will impose stringent export controls on companies, including those in third countries, in order to deny them access to items they can use to support Russia’s military and/or defense industrial base," Blinken said.

With reporting by AP, AFP and Reuters