The United States has imposed sanctions on Gazprombank, Russia’s third-largest lender, and dozens of other financial institutions as President Joe Biden seeks to further curtail the Kremlin’s ability to finance its war in Ukraine before he leaves office in two months.
Gazprombank, which plays an important role in facilitating Russian energy exports, was the only remaining large Russian lender not under U.S. sanctions. Washington and Brussels had avoided sanctioning Gazprombank amid concern over possible energy export interruptions.
Along with Gazprombank, the United States also announced sanctions on more than 50 other Russian banks conducting international operations, more than 40 Russian securities registrars and 15 Russian finance officials.
The United States also warned financial institutions against joining Russia’s version of the international messaging system for banks known as SWIFT. Russia is seeking to attract international banks to its messaging platform to get around U.S. financial sanctions.
“Today’s action reaffirms the U.S. commitment to curtail Russia’s ability to use the international financial system to conduct its war against Ukraine and disrupts Russia’s attempts to make cross-border payments for dual-use goods and military materiel,” State Department spokesman Matthew Miller said in a November 21 statement.
SEE ALSO: In Russia's War Economy, The Warning Lights Are BlinkingUkraine backers had been calling on the Biden administration for months to tighten sanctions on Russia’s banking sector, saying the Kremlin was finding ways around existing sanctions to pay for technology imports and other dual-use items.
In addition to facilitating energy payments, Gazprombank had been acting as a conduit for the purchase of military goods. The Kremlin also uses Gazprombank to pay Russian soldiers and compensate families for war deaths.
“I am grateful to @POTUS and his administration for today’s strong package of financial and banking sanctions targeting Russia’s economy and war chest,” Ukrainian President Volodymyr Zelenskiy said in a tweet.
Eddie Fishman, a former State Department official and sanctions expert, called the latest announcement a “strong step” toward closing loopholes around Russia’s energy sector, which generates about half of federal budget revenues.
Biden will leave office on January 20 to make way for President-elect Donald Trump, who has promised to end the war in Ukraine by getting Zelenskiy and Russian President Vladimir Putin to sit down at the negotiating table, something that experts say will be harder done than said.
The financial sanctions come at a critical time for Russia’s economy as Putin’s record spending on the war effort drives up inflation and interest rates. The Russian Central Bank last month raised interest rates to 21 percent, the highest in decades, and could continue to ratchet them up with no end in sight to the war.