U.S. presses to weed out illicit trade with Russia

ISTANBUL — The United States is stepping up efforts to persuade partner nations that have not joined Western sanctions on Russia to crack down on commercial activities in their countries that could be helping Moscow’s war effort in Ukraine, U.S. officials said.

Those efforts include pointing out to foreign governments transactions that the United States suspects are helping Russia evade sanctions and threatening new American sanctions on people and companies that the United States believes are fueling Russia’s war machine, the officials said Friday.

The new push comes as the anniversary of Russia’s invasion of Ukraine approaches and as U.S. officials, recognizing the limited effect of layers of Western sanctions on Russia, seek new ways to increasingly damage the Russian economy and undermine President Vladimir Putin’s ability to support his forces.

The sting from these sanctions is leading Russia to look for new economic pathways, said a senior U.S. official, who spoke on the condition of anonymity because he was not authorized to publicly discuss the efforts. Despite broad consensus in the United States and Europe about the need to punish Russia economically for its invasion, other large nations — including China, India and Saudi Arabia — have refused to apply sanctions, in many cases greatly benefiting their economies.

The new U.S. efforts have focused on Turkey, a NATO ally, and the United Arab Emirates, a close political and security partner of the United States. Both countries have resisted Western pressure to impose sanctions on Russia, instead continuing to trade with it and providing havens for wealthy Russians and their capital.

This past week, Brian Nelson, the U.S. Treasury Department’s top sanctions official, pressed the United States’ case with officials in both countries, pointing out transactions that the United States suspected could help Russia evade sanctions and raising the possibility of new measures against the people and companies involved.

The senior U.S. official said the United States had indicated specific ways it had seen some companies interact with those under sanction. These activities have included deals with penalized Russian companies, trade with Russia in U.S.-made products and the export to Russia of so-called dual-use goods, such as plastics, rubber and electronics that can be used for civilian and military purposes, the senior official said.

The Treasury Department said this past week that sanctions on companies involved in such activities could block them from doing business in some of the world’s wealthiest countries, possibly undermining their profits.

In Turkey, Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, met with officials from the central bank and the Ministries of Finance and Foreign Affairs, as well as with representatives of Turkish banks, said Morgan Finkelstein, a Treasury Department spokesperson.

Since the war in Ukraine began, Turkey has frustrated other members of NATO by refusing to impose sanctions on Russia and deepening its trade ties with Moscow. The Turkish government has stepped up imports of discounted Russian oil and gas, and Turkish companies have bolstered their exports to Russia, in many cases filling gaps left by European firms that have pulled out of the market.

Tens of thousands of Russians have settled in Turkey, bringing in foreign currency that has helped stabilize the country’s sagging economy. Some have established businesses, which U.S. and other Western officials suspect could help Russia import products that it struggles to get elsewhere.

Turkish President Recep Tayyip Erdogan has condemned the Russian invasion of Ukraine, but he has maintained ties with Putin, casting himself as a necessary go-between.

Turkish officials have questioned the effectiveness of sanctions and said imposing them would damage the Turkish economy. But they have reassured their U.S. counterparts that they do not want Turkey-based firms to help the Russian war effort.

Nelson made a similar push in the UAE, also emphasizing the United States’ willingness to “take additional actions against those evading or facilitating the evasion of sanctions,” the Treasury Department said.