The decision of the head of state will also have an impact Introducing for the first time so-called secondary sanctions
According to high-ranking US administration officials, the regulation aims to provide authorities in Washington with “a surgical tool that allows them to deal with financial institutions that carry out transactions that strengthen the Russian military-industrial complex.”
So far, sanctions have been imposed on people and entities that sold prohibited goods to Russia, including electronics for the Russian arms industry, but not the banks carrying out these transactions.
The new decision gives banks a very dangerous choice: If you allow these types of goods to be delivered to Russia, you must either make sure they do not end up in the Russian military-industrial complex or stop doing so. If you do not exercise this choice, you will be subject to the sanctions regime. “For the first time, we have a sanctions system that includes secondary sanctions,” one official said.
He added that the administration views the financial system as a potential bottleneck in the Kremlin’s efforts to circumvent restrictions on it, and companies facing a choice between selling a small amount of goods to Russia and losing access to the US financial market will not take the risk. According to the administration The new regulations will mainly affect institutions from third countriesBecause neither American nor European banks handle large amounts of transactions with Russia.
In addition, the list contains: A ban on the import of products – such as diamonds – that come from Russiabut was processed in other countries along the way.
“Our overall goal is to pump sand into the Russian supply chain, which we believe is one of the most effective ways to slow down the Russian war machine,” the official said.
The administration appears to be trying to address export controls bypassing financial sanctions. This is an interesting approach and would likely be a big deal if sanctions included non-Russian banks, says Maya Nikoladze, a sanctions expert at the Atlantic Council think tank.
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