REL: The measures that the US (did not) take against Russia after the attack on Ukraine

The US sanctions announced so far seem to spare Putin himself.

The US also abandoned an option long cited as one of the most difficult possible, not removing Russia from the SWIFT financial system that moves money around the world. Biden cited the concerns of European allies.

But the steps the United States took on Thursday are robust and aimed at crippling Russia’s financial system, its elites and any hope Russia has for economic growth.

This is a look at the financial retaliatory steps the US announced for Russia’s largest state-owned banks and businesses, its industry, its economy, and some of its most powerful people, as well as key measures that the U.S. still did not receive them.

Separation of Russian banks from the US dollar

Thursday’s sanctions target major Russian banks that hold nearly 80% of all the country’s banking assets, the US Treasury Department said.

This includes Russia’s two giant banks: state-owned SberBank and VTB. Combined, they hold almost $ 750 billion in assets which is more than half of the total in Russia.

Thursday’s sanctions on banks have the unique power that the US has through the dollar, the currency most used in business transactions worldwide.

Target banks typically do tens of billions of dollars of business in dollars every day.

The US is now disconnecting them from the US financial system and the US dollar. The aim is to complicate the most common business issues as well as international trade for banks and Russia.

Other U.S. measures target major state-owned and private businesses in Russia, making it harder for them to raise money to invest and operate.

The US also targeted more Russian elites, sanctioning bankers and other powerful Putin aides in Russia’s highest financial, political and security circles.

Deprivation of Russian businesses and the military of advanced American technology

The export controls announced by the Biden administration represent another particularly strong part of what the US has to offer – American semiconductors and other advanced high-tech equipment.

Biden said the new U.S. export restrictions would deprive Russia of more than half of its current high-tech supply.

This would “deal a severe blow” to Russia’s intentions to modernize its military, its acclaimed aerospace industry, its space program, its shipping and other industries, he said.

By “reducing their ability to compete economically,” high-tech constraints will be a “major blow to long-term strategic ambitions,” Biden said.

U.S. export controls are expected to deprive Russian industries and the military of high-tech US components that help fighter jets and passenger planes fly and make smartphones, along with other advanced software and electronics that make the modern world to function.

The United States said the European Union, Japan, Britain and other countries were also cooperating in the move to end Russia’s high-tech components.

The U.S. response could add Russia to the group with the biggest export restrictions, joining Cuba, Iran, North Korea and Syria.

They limit Russia’s ability to acquire integrated circuits and products containing integrated circuits, due to the global dominance of US software, technology, and equipment. The impact can extend to aircraft technology, smartphones, game consoles, tablets and televisions.

However, U.S. export restrictions would jeopardize the motivation of businesses to seek alternatives elsewhere, including China.

Measures that the US has not yet taken

Biden says sanctions against Russia were designed not to disrupt global oil and gas markets. This is at a time when oil supplies and high prices are making it difficult for governments and consumers around the world.

The Biden administration itself is under political pressure to raise oil and gas prices.

“Our sanctions package is specifically designed to allow energy payments to continue,” Biden said in a speech to the White House on Thursday.

Russia is one of the world’s leading oil and gas exporters. Germany and other allies are heavily dependent on its shipments, despite strong progress some are making in moving away from fossil fuels. The Biden administration has stressed the care it is taking to minimize the impact of sanctions on those allies.

Biden also cited European concerns as the reason for the US decision to suspend Russia’s withdrawal from the SWIFT financial system, which moves money from bank to bank around the world.

Germany’s leaders, with numerous business ties to Russia, had publicly expressed skepticism about the SWIFT ban.

Biden told reporters Thursday, February 24, that his banking sanctions would hit Russia even harder than a SWIFT ban. Some financial experts agree and say banking sanctions could also be less destructive to global financial systems than pulling Russia out of the SWIFT system.

On the other hand, Treasury Secretary Janet Yellen made it clear that the US could still impose some sanctions that it currently holds in reserve.

Individual sanctions imposed by the United States spared Putin himself. Individual European sanctions also seem to spare Putin.

US and European officials did not immediately elaborate. Biden has expressed reluctance to sanction heads of state in the past. The concern that direct targeting of Putin’s wealth and family could distract any hope of a diplomatic solution may also have played a role.

But when asked by reporters to explain the move, which was not taken Thursday, Biden declined to comment.

Associated Press, Adapted from REL.

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