The US expects that the threat of new sanctions will prompt US and European financial companies to put pressure on banks in other countries to avoid Russian smuggling schemes.
US to punish partner banks of Russia
US President Joe Biden signed a decree on economic measures against foreign financial institutions found to be involved in the supply of sanctioned military goods to Russia.
The relevant decree is published on the White House website.
The document provides that the US Treasury Secretary, after consulting with the Secretary of State and, if necessary, the Secretary of Commerce, can impose sanctions on a foreign financial institution if it helped make a payment to a person associated with the technological or defence sector of the Russian Federation.
Another reason for introducing sanctions is the provision of "any service related to Russia's military-industrial base, including the sale, supply or transfer... of any product or class of products."
"Foreign financial institutions" means any institutions that provide financial services, from banks to pension funds or payment system operators, as well as their subsidiaries, the document says.
Separately, Biden's order provides that such sanctions can be imposed without warning because otherwise, there is a risk of hiding assets subject to restrictions.
The document also provides for the introduction of restrictions on Russian diamonds by amending another decree on sanctions against Russia, as agreed by the leaders of the Group of Seven earlier this month, the decree said.
Western financial institutions have stopped mainly doing business with Russia. But Biden administration officials expect the threat of new sanctions to prompt American and European financial companies to put pressure on banks in other countries to avoid Russian smuggling schemes.
What is known about the intentions of the USA and the EU to use the frozen assets of the Russian Federation to help Ukraine
According to the journalists of The New York Times, the White House currently supports the seizure of $300 billion of Russian assets stored in Western countries.
The US is negotiating with allies on this issue, discussing the possibility of using these funds to finance aid to Ukraine.
At the same time, US Treasury Secretary Janet Yellen warned the White House that confiscating Russian assets without obtaining permission from Congress would be legally illegal under US law.
At the same time, some high-ranking American officials believe that after the decision to confiscate and transfer Russian assets to Ukraine, allied countries will not want to keep their funds in the New York Federal Reserve System or dollars.
However, the US and other G7 countries are debating whether to review the authority or appeal to Congress to approve the confiscation of these funds.
