Senior officials in the administration of US President Joe Biden are considering escalating sanctions once morest Russia as the civilian death toll from its invasion of Ukraine rises and the impact of current sanctions on the Russian economy remains unclear.
So far, US sanctions have prevented US banks and companies from doing business with Russian banks, oligarchs, defense companies, and other parts of the Russian economy.
newspaper says,Washington PostWhite House officials are setting up a rarely used procedure of imposing sanctions on third parties in other countries if they do business with U.S. sanctioned Russian entities, according to four people familiar with the discussions in the White House.
People familiar with the matter said such a move may not be imminent, and that no final decision has yet been made.
According to the newspaper, the Biden administration already has the legal authority to impose sanctions on international companies that do business with sanctioned Russian entities, but it has not yet done so.
The measure aims to expand the scope of US sanctions by depriving Russia not only of doing business with US and European companies, but also of the rest of its international trading partners, such as China, India and the Gulf states.
One person familiar with the internal talks said the sanctions would be aimed at “making non-US and non-European companies avoid Russia”.
This strategy, known as “secondary sanctions”, would represent a significant escalation of measures taken by Washington once morest Moscow over its invasion of Ukraine.
The newspaper notes that the United States did not resort to this step in the past, except on a few occasions.
In the event that secondary sanctions go ahead, this means that countries that have refrained from imposing their own sanctions on Russia must choose between continuing to deal with Russian entities subject to sanctions or with companies of Western allies, according to the “Washington Post.”
“The secondary sanctions are likely to be very strong,” said Dan Katz, who served as a senior advisor at the US Treasury from 2019 to 2021 and is currently at an investment management firm.
He added to the newspaper that secondary sanctions are a tool mainly used to impose economic blockades on countries.
Spokesmen for the White House National Security Council and the Treasury Department declined to comment on this information.
The White House’s move to impose secondary sanctions coincides with increasing pressure from both the Ukrainian government and some members of Congress to intensify Western economic measures once morest Russia.
So far, Russia appears to be able to weather sanctions better than expected, as it can still rely on oil and gas exports, taking advantage of rising global energy prices.
“Despite all the financial sanctions, the biggest hole is oil and gas,” said Jeff Schott, senior fellow at the Peterson Institute for International Economics. “This has allowed billions of dollars a week to flow into Russia and provide resources to fund the Russian government and the military.”
Secondary sanctions would seriously damage the Russian economy, although it remains unclear how they will work in practice, according to the newspaper.
