An overview of steps taken — and not taken — against Russia
WASHINGTON — President Joe Biden hit Russia with some of the broadest and toughest financial penalties that the world’s biggest economy can muster on Thursday, hours after President Vladimir Putin launched his military’s invasion of Ukraine.
Here’s a look at the retaliatory financial steps the U.S. announced for Russia’s biggest state-owned banks and businesses, its industry, its economy and some of its most powerful people, as well as key measures that the U.S. is still holding off on.
Cutting Russian banks off
Thursday’s sanctions target big Russian banks holding nearly 80 percent of all the country’s banking assets, the Treasury Department said.
That includes Russia’s two biggest: state-owned Sberbank and VTB. Combined, they hold almost $750 billion in assets, the U.S. said, which is more than half of the entire total in Russia.
The targeted banks normally do tens of billions of dollars in business in dollars daily. The U.S. is now cutting them off from the U.S. financial system and U.S. dollar. The aim is to make the most ordinary business matters as well as international trade far more difficult for the banks, and Russia.
Other U.S. measures target key state-owned and private businesses in Russia, aiming to make it harder for them to raise money to invest and operate.
The U.S. also went after more of Russia’s elites, sanctioning bankers and other powerful associates of Putin in Russia’s top financial, political and security circles.
Starving Russia of U.S. high tech
Export controls announced by the Biden administration feature another especially strong piece of leverage the U.S. holds — America’s semiconductors and other advanced high-tech gear.
Biden said new U.S. export limits will deprive Russia of more than half of its current high-tech supply. It will “strike a blow” to Russia’s aims to modernize its military, its vaunted aerospace industry, its space program, shipping and other industry, he declared.
By “reducing their ability to compete economically,” the high-tech limits will be a “major hit to longterm strategic ambitions,” Biden said.
The U.S. said the European Union, Japan, Britain and other countries were also cooperating in the move to starve Russia of high-tech components.
They limit Russia’s ability to obtain integrated circuits and products containing integrated circuits, due to the global dominance of U.S. software, technology and equipment. The impact could extend to aircraft avionics, machine tools, smartphones, game consoles, tablets and televisions.
Steps the U.S. didn’t take
Biden says the sanctions against Russia were tailored to not disrupt the global oil and natural gas markets.
“Our sanctions package is specifically designed to allow energy payments to continue,” Biden said in his White House address Thursday.
Russia is one of the world’s top oil and gas exporters. Germany and other allies are heavily dependent on its shipments, despite the strong progress some are making in moving away from fossil fuels. The Biden administration has stressed the care it is taking to minimize sanctions’ impact on those allies.
Biden also cited European concerns for the U.S. decision to keep holding off on proposals to ban Russia from the SWIFT financial system, which moves money bank-to-bank around the world.
Biden told reporters Thursday his banking sanctions will hit Russia even harder than a SWIFT ban would. Some financial experts agree, and say the banking sanctions could also be less disruptive to global financial systems compared with wrenching Russia out of the SWIFT system. Treasury Secretary Janet Yellen made clear the U.S. could still levy some punishments that it’s currently holding in reserve.
The individual sanctions announced by the United States also spared Putin himself. Individual European sanctions also appear to spare Putin.
U.S. and European officials didn’t immediately explain their reasoning in that. Biden has expressed reluctance about sanctioning heads of state in the past. Concern that targeting Putin’s wealth and family directly might cut off all hope of diplomatic resolution also may have played a part.
A food delivery person in Moscow leaves an office with screen showing the currency exchange rates of U.S. dollar and Euro to Russian rubles Thursday.