Washington — The Biden administration expanded sanctions against Russia on Monday as part of its continuing efforts to impose costs on Moscow for its invasion of Ukraine, targeting the Central Bank of Russia with new economic measures that immobilize any assets it holds in the United States.
The latest action from the Treasury Department prohibits U.S. citizens from participating in any transactions with Russia’s Central Bank, its National Wealth Fund or the Russia Ministry of Finance. The U.S. also sanctioned the Russian Direct Investment Fund and its CEO, Kirill Dmitriev, a close ally of Russian President Vladimir Putin.
The Treasury Department said it is issuing a “general license” to authorize certain energy-related transactions with the Russian Central Bank.
“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine,” Treasury Secretary Janet Yellen said in a statement.
The move by the Biden administration takes aim at what a senior administration described as Putin’s war chest of $630 billion in foreign reserves. A senior administration official told reporters Saturday that the U.S. and its European allies are committing to “disarm” the Central Bank, in part by preventing Americans and Europeans from selling rubles to the bank.
Since Russia launched its war against Ukraine, the U.S. and European partners have acted swiftly with sanctions intended to cut off Russia from the global financial system and global economy. Sanctions have targeted a slew of Russian financial institutions, including its two largest banks, and Russian oligarchs who are close to Putin. On Friday, the Biden administration and Western allies said it would sanction Putin and Russian Foreign Minister Sergey Lavrov. Then, on Saturday, the U.S., European Union and the United Kingdom announced it agreed to cut certain Russian banks from the SWIFT financial messaging system.
A senior administration official said Monday that it is still finalizing the list of banks that will be removed from the SWIFT system.
The officials noted the measures take effect immediately, and their impact has already been felt with the ruble 30% weaker and the Central Bank doubling its interest rate. They predicted inflation will spike and investment will “plummet.”
