The US has unveiled a new layer of sanctions on Russia, targeting services, Russia’s propaganda machine and its defense industry on the eve of Vladimir Putin’s planned Victory Day parade.
The new measures were announced as leaders from the G7 group of industrialized democracies held a virtual summit with Ukrainian president, Volodymyr Zelenskiy in a show of solidarity.
They are primarily intended to close loopholes in the existing sanctions and to tighten the noose around the Russian economy by another few notches.
The new penalties include:
*A ban on sales of US services to Russia, like accountancy and management consultancy
*No more US advertising or sales of broadcasting equipment to three Kremlin-controlled television stations
*Technology export bans including industrial engines, bulldozers and other items that can be used by Russian defense factories
*Visa restrictions on another 2,600 Russian and Belarusian individuals, including military officials, and executives from Sberbank and Gazprombank
In imposing a ban on services the US is falling into line with the UK, which made a similar announcement last week. The two countries provide the overwhelming bulk of services like accountancy and management consultancy to Russian corporations.
The Biden administration sees US service providers as potential tools Russia could use to sidestep the punitive measures already imposed.
“They’ve been asked by Russian companies to help them figure out how to reformulate their business strategies in the wake of sanctions, in some cases how to get around these sanctions, or in the case of accountants how to hide some of their wealth, and we’re shutting that down,” a senior administration official said.
Like the UK, the restrictive measures do not apply to lawyers, but the US official said that could change, and that Washington and London are coordinating their moves in that respect.
“We made a judgment at least for now, that if there was a desire to seek due process through a US lawyer, we would allow that to continue,” the official said. “But we’re reevaluating the breadth of these services sanctions every day, and depending on how we see behavior change over time, we can certainly broaden the sanctions.”
The new media sanctions will target three Kremlin-controlled propaganda outlets: Channel One, Russia-1 and NTV. American companies will no longer be allowed to sell equipment like video cameras or microphones to them, and US advertising on their channels will be banned. Last year, US companies bought $300m in advertising in the Russian market.
“A lot of these advertisers have announced since the invasion that they’re going to cut their business activity with these stations, but we want to make sure that decision endures and just send a broader signal that US companies should not be in the business of funding Russian propaganda,” senior a senior administration official briefing the press ahead of the announcement.
The new technology export bans on industrial items such as heavy engines and bulldozers are intended to have an impact on Russian war efforts by hitting the supply chain for defense manufacturers. The US claims that Russia two major Russian tank plants, Uralvagonzavod Corporation and Chelyabinsk Tractor Plant, have already been forced to halt production due to a lack of foreign components.
The 2,600 new visa restrictions on individuals include military officials and Russian proxies deemed to have played a part in the invasion and there will be a new visa policy which would apply automatically to military or proxy officials involved in human rights abuses.
The targeted sanctions will also hit eight executives from Sberbank, Russian’s largest financial institution, and 27 from Gazprombank, owned by Russia’s giant gas industry. Until now Gazprombank has been left untouched because of its role in facilitating European purchases of Russian natural gas.
“This is not a full block. We’re not freezing the assets of Gazprom bank or prohibiting any transaction with Gazprombank,” the senior administration official said. “What we’re signaling is that Gazprombank is not a safe haven, so we’re sanctioning some of their top business executives, people who sit at the top of the organization, to create a chilling effect.”