The United States and its allies plan new sanctions on more sectors of Russia’s economy that are critical to sustaining its invasion of Ukraine, including supply chains, Deputy US Treasury Secretary Wally Adeyemo said on Tuesday.
Adeyemo, speaking in London on European trip to consult with allies on strengthening and enforcing sanctions to punish Russia, said that the broadening of these efforts was aimed at undermining “the Kremlin’s ability operate its war machine.”
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“In addition to sanctioning companies in sectors that enable the Kremlin’s malign activities, we also plan to take actions to disrupt their critical supply chains,” Adeyemo said in remarks prepared for deliver at London-based think tank Chatham House.
“These are actions we will take in coordination with the more than 30 partners and allies that have joined our coalition in response to Russia’s invasion of Ukraine,” he added, without identifying specific sectors or companies.
Sanctions imposed since the invasion began on February 24, including freezing the Russian central bank’s foreign currency assets, banning key Russian banks and wealthy elites from hard currency transactions and export restrictions on advanced semiconductors and other technology have proven extremely effective, Adeyemo said, plunging Russia into a financial crisis.
The sanctions have weakened the Russian economy and left the Kremlin with fewer resources.
“Our allies and partners are committed to taking additional significant steps to constrain the Russian economy, for as long as Russia’s invasion continues,” Adeyemo said.
He attributed the success of the sanctions to a strong multilateral effort and the strength of an international economic and financial system built by democratic countries at the end of World War Two, which created institutions including the International Monetary Fund, the World Bank and the precursor to the World Trade Organization.
These institutions created international rules, norms, and values that set the stage for decades of prosperity, but which have been rejected by Russia in its invasion of Ukraine, he said.
“Our multilateral response demonstrates that the international financial system and economic marketplace are not open to those that fail to respect the core principles of territorial integrity and self-determination,” Adeyemo said.
That includes Russian oligarchs targeted by sanctions and those who may attempt to help them hide their assets, he said, adding that they, too would face sanctions.
Adeyemo said that the international system that gave rise to the sanctions needed strengthening, including by addressing food insecurity resulting from the conflict, which has disrupted grain shipments from Ukraine.
He also said that the international community needed to finalize the global minimum corporate tax agreement and continue provide the resources needed to end the COVID-19 pandemic, with broader vaccine access.
Adeyemo also said the use of economic sanctions must be refined to preserve their efficacy, including avoiding unilateral actions and ensuring that they are tied to clear policy objectives and can be easily reversed when these are met.
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