By Daphne Psaledakis and David Brunnstrom, Reuters
US president Joe Biden says sanctions against Russia and those connected to assisting its aggression are aimed to hit them financially. Photo: DREW ANGERER / AFP
The United States has imposed extensive sanctions against Russia, targeting more than 500 people and entities to mark the second anniversary of Moscow's invasion of Ukraine and to retaliate for the death of Russian opposition leader Alexei Navalny.
President Joe Biden said the measures aim to ensure Russian President Vladimir Putin "pays an even steeper price for his aggression abroad and repression at home."
The sanctions targeted Russia's Mir payment system, financial institutions and its military industrial base, sanctions evasion, future energy production and other areas. They also hit prison officials the US says are linked to Navalny's death.
"Doesn't Washington realize that sanctions won't take us down?" Russia's ambassador to Washington, Anatoly Antonov, was quoted as saying on his embassy's channel on the Telegram messaging app.
The Biden administration is seeking to continue supporting Ukraine as the country faces acute shortages of ammunition, but the approval of more US military aid has been delayed for months in the US Congress. The European Union, Britain and Canada also took action against Russia on Friday.
However, Russia's export-focused $US2.2 trillion economy has proved more resilient to two years of unprecedented sanctions than either Moscow or the West anticipated.
Russia invaded neighboring Ukraine on 24 February, 2022 and the war has seen tens of thousands killed and cities destroyed.
The US Treasury Department targeted nearly 300 people and entities on Friday, while the State Department hit more than 250 people and entities and the Commerce Department added over 90 companies to the Entity List.
The United States and its allies have imposed sanctions on thousands of Russian targets through the past two years.
"We must sustain our support for Ukraine even as we weaken Russia's war machine. It's critical that Congress steps up to join our allies around the world in giving Ukraine the means to defend itself," Treasury Secretary Janet Yellen said in a statement.
Brian O'Toole, a former Treasury official, said the action, while a lot of names, was short on impact.
"They're not going to have a big impact," O'Toole said, because the majority of the entities listed are Russian, rather than foreign firms, and are easily replaceable as Moscow seeks to skirt sanctions.
But Ben Harris, a former senior Treasury official, said the magnitude of the sanctions imposed by the United States alone was formidable.
Peter Harrell, a former National Security Council official, said the moves against sanctions evasion networks in third countries sent a clear message that the US is prepared to take action against circumvention.
"I see this as kind of a valuable but incremental step that is within the strategy they've been deploying over the last two years," he said.
Payment system
US Secretary of State Antony Blinken said Friday's move was Washington's largest number of designations in a single Russia action.
The US Treasury imposed sanctions on state-owned National Payment Card System, the operator of the Mir payment system.
Mir payments cards have become more important since its US rivals suspended operations in Russia after Moscow sent tens of thousands of troops into Ukraine, and their payment cards which were issued in the country stopped working abroad.
"The government of Russia's proliferation of Mir has permitted Russia to build out a financial infrastructure that enables Russian efforts to evade sanctions," the US Treasury Department said in a statement.
It also targeted over a dozen Russian banks, investment firms, venture capital funds, and fintech companies.
The United States also targeted Russia's future energy production and exports, taking further aim at Arctic LNG 2 project in Siberia. In November, Washington imposed sanctions on a major entity involved in the massive project.
On Friday, the State Department targeted Russia's Zvezda shipbuilding company, which it said is involved in the construction of up to 15 highly specialized LNG tankers intended for use in support of Arctic LNG 2 exports.
US Deputy Treasury Secretary Wally Adeyemo told reporters that Treasury plans to level additional sanctions later on Friday over the G7's price cap on Russian oil. He said the measures will increase costs for Russia to use an aging fleet of tankers to get oil to markets mainly in India and China.
The United States also imposed sanctions on entities based in China, Turkey, the United Arab Emirates, Kazakhstan and Liechtenstein over the evasion of Western sanctions on Russia and backfilling.
The action comes as Washington has increasingly sought to crack down on Russia's circumvention of its measures.
The move also targeted a network through which Russia, in cooperation with Iran, has acquired and produced drones.
The Biden administration also imposed new trade restrictions on 93 entities from Russia, China, Turkey, the United Arab Emirates and elsewhere for supporting Russia's war effort in Ukraine.
Navalny's death
The State Department on Friday also targeted three Russian Federal Penitentiary Service officials it accused of being connected to Navalny's death, including its deputy director who it said reportedly instructed prison staff to exert harsher treatment on Navalny.
Navalny, 47, fell unconscious and died suddenly last week at the penal colony above the Arctic Circle, the prison service said.
Biden, who has directly blamed Putin for Navalny's death, met the opposition leader's widow and daughter in California on Thursday and called him "a man of incredible courage."
The US action also targeted people involved in what the State Department called the forcible transfer or deportation of Ukrainian children.
Russia's economy has performed above expectations, with the International Monetary Fund in January forecasting 2.6 percent GDP growth for 2024 - a 1.5 percentage point upgrade from an October estimate - after solid 3.0 percent growth in 2023.
"Russia's current GDP numbers are not self-sustaining economic growth that's putting the Russian economy on a trajectory for a more prosperous future. It's wartime spending that is consuming the future to serve the present war," a State Department official said.