US introduces new wave of anti-Russian sanctions in response to Bucha atrocities

6 April, 08:27 PM
White House (Photo:Joshua Roberts / Reuters)

White House (Photo:Joshua Roberts / Reuters)

The U.S. is announcing another package of sanctions against the Russian Federation in response to war crimes in Bucha, a wealthy suburb of Kyiv. 

This new wave of sanctions, while sparked by the Bucha massacre, reflects the American government’s reaction to other atrocities conducted by the Russian army on Ukrainian sovereign territory as well.

So far the exact number of dead civilians in Bucha is unknown, but to the best of The New Voice of Ukraine’s knowledge, this is a matter of, at minimum, hundreds of people murdered in cold blood by Russian soldiers.

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On April 6, the White House published a press release listing a series of new sanctions, split into five categories, and which are expected to have a severe material effect on the Russian economy.

The press release mentions the word “default”, implying that Russian Finance Ministry might get closer to default after the U.S. Treasury sanctioned it from using U.S.-stored funds to serve their own own liabilities.

“Experts predict Russia’s GDP will contract up to 15 percent this year, wiping out the last fifteen years of economic gains,” reads the press release.

“Inflation is already spiking above 15 percent and forecast to accelerate higher. More than 600 private sector companies have already left the Russian market. Supply chains in Russia have been severely disrupted.”

Further, the White House predicts that these sanctions, in conjunction with earlier ones placed on Russia for its full-scale invasion of Ukraine, will likely cause Russia to “…lose its status as a major economy,” setting it on a downward path to “into economic, financial, and technological isolation.”

The release notes that sanctions have already reduced the value of sanctioned Russian products by up to 99%, and that these restrictions will compound as Russia uses its remaining stockpiles for the war effort.

These new sanctions have been applied in coordination with the G7 countries, and the EU, which had introduced their own sanctions the day before, on April 5 - marking the 5th package of sanctions by Brussels.

The latest EU package includes sanctions against Russia’s second biggest bank VTB, a state-owned financial institution whose president Andrey Kostin is close to Russian dictator Vladimir Putin. Besides VTB, the EU has sanctioned transportation routes and the trade and export of critical technologies – like semiconductors and quantum computers – to the Russian Federation. Some of the EU sanctions are focused on Belarus and its economic ties with Russia.

However, the White House is not sanctioning Russian companies that operate in the agriculture, telecommunications, and healthcare sectors. According to the press release, this is to ensure that Russian citizens will not face shortages of food, medicine, and information.

“When necessary, relevant departments and agencies will issue appropriate exemptions and carveouts to ensure such activity is not disrupted,' says the White House release, prioritizing the availability of covering the humanitarian needs of Russian citizens.

The U.S. April 6 package of anti-Russian sanctions includes following items:

1)     Full blocking sanctions on Sberbank, a retail bank that is Russia’s largest financial institution. Previously, Sberbank led by former economy minister German Gref, received some positive coverage in the Western media for being innovative and possessing up-to-date banking technology. Besides Sberbank, the U.S. is imposing blocking sanctions on Alfa Bank, Russia’s largest private bank. Both banks will have their assets in America frozen, while U.S. citizens will be prohibited from dealing with them.

2)     Prohibiting new investment in the Russian Federation. This will come in a form of an executive order issued by President Joe Biden – it will prohibit new American investments in Russian business projects, public or private. After 600 multinational businesses have already exited the Russian market, this is expected to amplify a severe hit on the Russian economy whose various sectors – from manufacturing and energy to retail and finance – have seen an unprecedented corporate exodus.

3)     Full blocking sanctions on critical major Russian state-owned enterprises. Any U.S. citizen will be prohibited from buying shares, bonds, depositary receipts or any derivatives (SPAC shares, special-purpose vehicles and such included) issued by Russian Federation’s state-owned companies. This list includes Gazprom, Rosneft, Rosnano, Rosoboronprom, RZHD, Rosatom and others.

4)     Full blocking sanctions on Russian elites and their family members. This list includes: Vladimir Putin’s adult children, foreign minister Sergey Lavrov’s wife and daughter, and members of the Russian Security Council, including Dmitry Medvedev and prime minister Mikhail Mishustin, accusing them of having profited from funds stolen from the Russian people.

5)     Sanctions on Russian sovereign debt. The U.S. Treasury has prohibited Russia from making debt payments with funds that are subject to U.S. jurisdiction. This means that the Russian Finance Ministry will not be able to serve its bond liabilities with money stored at an American bank or at the Federal Reserve System. Therefore, if Finance Ministry in Moscow decides to make a debt payment to its bond holders and creditors, it will have to use the funds deposited outside the U.S. financial system.
“Russia is a global financial pariah – and it will now need to choose between draining its available funds to make debt payments, or default,” the White House stated.

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