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Ukraine war: The EU is proposing a Russia oil embargo but what could the US do to tighten sanctions?

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The United States has imposed several rafts of sanctions on Russia over its invasion of Ukraine in February, targeting its central bank, major lenders, oligarchs, and Russian president Vladimir Putin.

Here are some ways in which the United States could further increase sanctions on Russia.

The European Union's execu-tive on May 4 proposed the toughest package of sanctions yet against Moscow for its war in Ukraine, including a planned embargo on Russian oil.

Diplomats said talks were com-plex but many expressed confidence all 27 EU government­s could agree before next week.

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Sanctions on oil and energy

Edward Fishman, who worked on Russia sanctions at the State Department during President Barack Obama's administra­tion, said now that the EU is moving toward an oil embargo, it opens up possibilit­ies on what Washington and its allies can do next.

"I think the next step is going to be the United States working with the EU and the rest of the G7 to globalize that campaign against Russia's oil sales," Fishman said.

Some measures the West could impose to restrict Russia from receiving payment for oil could include requiring all payments for Russian oil to go into escrow accounts outside of Russia and setting a price cap on what can be paid for Russian oil, backed up by the threat of secondary sanctions, Fishman said.

Another option would be for the EU to impose import taxes on Russian oil, Fishman said.

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Brian O'Toole, a former Trea-sury Department official now with the Atlantic Council think tank, said the United States could also ban the provision of insurance for Russian oil cargoes and threaten secondary sanctions on any foreign person who conducts a significan­t transactio­n with a Russian cargo vessel.

He said such a move would "greatly complicate Russia's ability to ship oil elsewhere".

The United States could also further tighten energy-related sanctions by adding major companies such as oil giant Rosneft or gas producer Gazprom to the Specially Designated Nationals (SDN) list.

Tightened sanctions on banks and state-owned businesses

Experts have said the United States can also expand its punitive measures on Russian banks and state-owned enterprise­s.

The United States has imposed sanctions on major Russian banks, including Sberbank, the country's largest lender.

Washington could further tar-get Gazpromban­k and others, O'Toole said, wielding Washington's most powerful sanctionin­g tool and adding them to the SDN list.

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Such a move would effectivel­y kick them out of the US banking system, ban their trade with Americans and freeze their American assets.

"Apart from Gazpromban­k, there's nothing left of strategic significan­ce in the banking world in Russia. So, frankly, if they did Gazpromban­k separately, I think the step after that would just be a complete financial embargo," O'Toole said.

Financial embargo

A total financial embargo on Russia would likely be implemente­d through the issuance of a new executive order that would bar

Americans from exporting to or importing from Russia goods, services or technologi­es, said O'Toole.

"Then Russia becomes Iran," he said.

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Secondary sanctions

The United States could also enforce secondary sanctions against designated Russian entities and individual­s, which would threaten anyone in the world performing transactio­ns with Russia, Fishman said.

Further SWIFT restrictio­ns

In early March, the EU named seven banks it would bar from SWIFT, the world's main internatio­nal payments network, including Russia's second-largest bank VTB. However, lenders handling energy payments were spared.

The US and its allies could fur-ther tighten those restrictio­ns and block access of more or all Russian banks to SWIFT.

The EU's latest round of sanc-tions proposes cutting Sberbank off from SWIFT.

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Oligarchs

The United States could impose sanctions on Russian oligarchs who have not yet been targeted, perhaps by bringing its measures in line with the EU and United

Kingdom, which have targeted several Russian oligarchs not so far designated by Washington.

They include billionair­e Roman Abramovich and tycoon Mikhail Fridman.

In his State of the Union ad-dress in March, Biden said the United States would work to seize the yachts, luxury apartments, and private jets of wealthy Russians with ties to Putin.

 ?? ?? In his State of the Union address, Joe Biden said the US would work to seize more yachts and assets owned by Russian oligarchs.
In his State of the Union address, Joe Biden said the US would work to seize more yachts and assets owned by Russian oligarchs.
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