Biden imposes sanctions on Russian banks and elites as he says Ukraine invasion has begun

WASHINGTON, Feb 22 (Reuters) – President Joe Biden said on Tuesday the United States was imposing a first round of sanctions on Russia for launching an invasion of Ukraine and promised more would come if there is. had new inroads.

Biden, speaking to reporters at the White House, said the United States would impose sanctions on two major Russian financial institutions and Russian sovereign debt. Sanctions have also been imposed on Russian elites and their family members, administration officials said.

President Vladimir Putin on Monday asked the Russian Defense Ministry to deploy what he called peacekeeping forces to two breakaway regions of Ukraine after recognizing them as independent, raising fears of an imminent war in Europe.

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“This is the start of a Russian invasion of Ukraine,” Biden said. “Russia has now undeniably acted against Ukraine by declaring these states independent.”

The United States had promised tough sanctions against Russia if it invaded Ukraine, which the White House had previously defined as any troop movement across the border.

The United States deployed its strongest sanction tool, placing Russian elites and two banks on the list of Specially Designated Nationals, effectively expelling them from the American banking system, barring them from doing business with Americans, and freezing their American assets.

Biden said the initial tranche sanctions applied to VEB Bank and Russia’s military bank – Promsvyazbank, which makes defense deals. He said sanctions on Russia’s sovereign debt meant the Russian government would be cut off from Western funding.

“As Russia considers its next move, we have also prepared our next move,” Biden said. “Russia will pay an even higher price if it continues its aggression, including additional sanctions.”

Putin did not watch Biden’s speech and Russia will first consider what the United States described before responding, Kremlin spokesman Dmitry Peskov was quoted by Russian news agencies as saying.

Biden said the United States would continue to provide “defensive assistance” to Ukraine but had no intention of fighting Russia. He said he had authorized additional movements of US forces already stationed in Europe to reinforce Baltic allies Estonia, Latvia and Lithuania.

Biden, who faces concerns at home about inflation and high energy prices, said his administration was closely monitoring energy supplies for disruptions and working on “collective investment to ensure stability and global energy supply” with major oil producers and consumers.

“It’s going to blunt gas prices. I want to limit the pain that Americans are feeling at the gas pump. That’s critical to me,” he said.

SANCTIONS Triggered

On Monday, a senior administration official said Russia sending troops into the breakaway regions of Donetsk and Luhansk in Ukraine did not represent a new invasion because Russia already had troops there. But on Tuesday, White House officials changed language to say an invasion had begun.

Washington has imposed sanctions on VEB and Promsvyazbank Public Joint Stock Company, as well as 42 of their subsidiaries, accusing the two banks of being “public institutions that play specific roles in supporting defense capability and the economy. of Russia”.

Sanctions on banks come on top of designations of Russian ‘elites’ whom the Treasury Department accuses of being close to Putin, including Aleksandr Bortnikov, director of the Federal Security Service (FSB), and Petr Fradkov, chairman-director General of Promsvyazbank Public Joint Stock Company.

Sergei Kirienko, former Russian Prime Minister, was also hit with sanctions.

“They share the corrupt gains of Kremlin policies and should share the pain as well,” Biden said of Russia’s elites.

Brian O’Toole, a former Treasury Department official now with the Atlantic Council, said Tuesday’s sanctions would have an impact, but questioned whether it would be immediate enough.

“I think the risk they run in not prosecuting a major state-owned commercial bank is that Putin thinks the West won’t be prepared to bear the pain of significant economic sanctions, and therefore can expand its ambitions safely,” he said.

Russian banks Sberbank (SBER.MM) and VTB (VTBR.MM) would face US sanctions if Moscow continues its invasion of Ukraine, a senior US administration official has told reporters.

The official also said unsanctioned Russian elites on Tuesday should be warned and noted that the Biden administration was fully prepared to implement export controls with a slew of countries if Russia invaded further.

“Further Russian attacks on Ukraine remain a grave threat in the days ahead,” Biden said. “The United States and our allies and partners remain open to diplomacy if it is serious.”

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Reporting by Jeff Mason, Steve Holland, Alexandra Alper, Daphne Psaledakis and Doina Chiacu; written by Jeff Mason; Editing by Heather Timmons, Alistair Bell and Rosalba O’Brien

Our standards: The Thomson Reuters Trust Principles.

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