By AFP and Kontur | 2024-06-14

WASHINGTON -- The United States June 12 announced a raft of new sanctions aimed at constraining Moscow's war in Ukraine while raising the stakes for foreign banks that still deal with Russia, ahead of G7 talks.

Russia launched a full-scale invasion of Ukraine in February 2022.

The Treasury Department and State Department's sanctions hit more than 300 targets, including entities in Russia and in countries like China, Türkiye and the United Arab Emirates (UAE).

Those designated include the Moscow Exchange and several subsidiaries, a move set to complicate billions of dollars in transactions, as well as entities involved in liquefied natural gas projects.

"Today's actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries," said Treasury Secretary Janet Yellen.

"We are increasing the risk for financial institutions dealing with Russia's war economy and eliminating paths for evasion, and diminishing Russia's ability to benefit from access to foreign technology, equipment, software, and IT [information technology] services," she added.

The United States "remains concerned by the scale and breadth of exports" from China supplying Moscow's military industry, Secretary of State Antony Blinken said separately.

Russia vowed to respond to the "aggressive" latest sanctions, according to the state-run TASS news agency, while the Moscow Exchange said it would halt foreign exchange trading in dollars and euros.

Besides fresh sanctions, the Treasury is broadening its definition of Russia's "military-industrial base."

Until now, foreign banks could be sanctioned for supporting Russia's defense industry. The latest step expands the reach of so-called secondary sanctions to all Russian individuals and entities that have already been impacted by US sanctions.

This means foreign financial institutions could be hit for conducting transactions involving any blocked person or designated Russian banks like VTB or Sberbank -- with the list of exposed targets growing from over 1,000 to about 4,500.

Washington is also restricting the supply of IT services and software support to people in Russia.

Global networks

The latest sanctions impact transnational networks, hitting more than 90 people and entities in China, South Africa, Türkiye and the UAE.

Goods and services from these foreign networks helped Russia to sustain its war and avoid sanctions, says Washington.

Efforts to restrict Russia's ability to sustain the war in Ukraine have had a "significant impact," a senior US official said June 12.

"Global exports to Russia have fallen by almost $90 billion, and US exports to Russia have essentially halted for everything but certain medical items like vaccines," the official added on condition of anonymity.

The Treasury also expanded its list of information for five sanctioned Russian financial institutions to include addresses and aliases of their foreign locations.

In a separate statement, the Commerce Department said it was adding eight Hong Kong addresses to a blacklist, in a move targeting shell companies.

The addresses listed will impact almost $100 million in high-priority items including semiconductors, the US official said, adding that much of the circumvention appears to be going through entities in China.

Washington's actions come ahead of this week's G7 summit in Italy.

Steps to aid Ukraine using frozen Russian assets will be announced during the gathering, the White House said earlier.

G7 leaders hope to reach a deal on using the profits from the interest on €300 billion ($325 billion) of immobilized Russian central bank assets to help Kyiv. The idea is to use the profits as collateral for a loan of up to $50 billion.

Abduction of Ukrainian children

On June 12 Washington also accused Russia of taking Ukrainian children, some of whom were put up for adoption, after fresh media accounts detailed alleged abductions.

"This is despicable and appalling. These Ukrainian children belong with their families inside Ukraine," White House National Security Adviser Jake Sullivan said.

"Russia is waging a war not just against the Ukrainian military -- but against the Ukrainian people."

An investigation by the Financial Times, published June 12, identified and located four Ukrainian children allegedly transferred to Russia, then offered for adoption on the website Usynovite.

The children are aged between 8 and 15 years old.

According to the report, the name of one child was changed to Russian and no mention is made on the site of their Ukrainian origins.

Ukraine is demanding the return of almost 20,000 minors it says have been illegally taken by Russia since the start of Moscow's invasion in 2022.

The International Criminal Court has issued an arrest warrant for Russian President Vladimir Putin and his children's rights commissioner, Maria Lvova-Belova, over the allegations.

Ukrainian President Volodymyr Zelenskyy told AFP last month that he planned to make the return of children a top priority at this weekend's summit in Switzerland on ending the war.