Biden administration expands Russia sanctions, cutting off U.S. transactions with central bank

Biden administration expands Russia sanctions, cutting off U.S. transactions with central bank

Russian President Vladimir Putin attends a meeting with judges of Russia’s arbitration courts and courts of general jurisdiction via teleconference call at the Novo-Ogaryovo state residence, outside Moscow, on February 9, 2022.
Alexey Nikolsky | AFP | Getty Images

WASHINGTON — The Biden administration announced additional sanctions against Russia’s central bank on Monday, a move that effectively prohibits Americans from doing any business with the bank as well as freezes assets within the United States.

The new measures will also target the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation.

A senior Biden administration official, who spoke on the condition of anonymity in order to share Washington’s thinking, said the new sanctions will take effect immediately.

“We wanted to put these actions in place before our markets open because what we learned over the course of the weekend from our allies and partners was the Russian Central Bank was attempting to move assets and there would be a great deal of asset flight starting on Monday morning from institutions around the world,” the official said, on a conference call with reporters.

“Our strategy to put it simply is to make sure that the Russian economy goes backward. As long as President Putin decides to go forward with his invasion of Ukraine,” the official added.

The U.S. is also adding Kirill Dmitriev, another ally of Russian President Vladimir Putin, to the sanctions list as well as the direct investment fund Dmitriev heads.

This comes after the U.S., the EU, the U.K and Canada over the weekend announced they would restrict Russia’s ability to use its central bank reserves.

“No country is sanctions proof and Putin’s war chest of $630 billion in reserves only matters if he can use it to defend his currency,” a second senior administration official said Monday.

Over the weekend, the U.S., European allies and Canada agreed to remove key Russian banks from the interbank messaging system, SWIFT, an extraordinary step that will sever the country from much of the global financial system.

Moscow’s exclusion from SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, means Russian banks won’t be able to communicate securely with banks beyond its borders. Iran was removed from SWIFT in 2014 following developments to Tehran’s nuclear program.

This story is developing. Please check back for updates.

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