Treasury’s Adeyemo: US, allies plan more Russia sanctions in ‘coming days’

The United States and its allies will impose new sanctions and export controls in “coming days” to ratchet up pressure on Russia to end its war in Ukraine and crack down on companies and individuals who are helping Moscow evade sanctions, Deputy Treasury Secretary Wally Adeyemo said on Tuesday.

Adeyemo said the United States, the European Union and others would target Russia’s purchases of dual-use goods like refrigerators and microwaves to secure semiconductors needed for its military. The sanctions would also seek to do more to stem the transshipment of oil and other restricted goods through bordering countries, he said, without providing details.

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In addition, he said officials from the coalition of more than 30 countries would warn companies, financial institutions and individuals still doing business with Russia that they faced sanctions if they continued to do so.

“The breadth of this coalition is what will enable us to continue to isolate Russia,” Adeyemo said in a speech at the Council on Foreign Relations (CFR) on Tuesday, ahead of Friday’s one-year anniversary of Russia’s invasion.

“We will force those that fail to implement our sanctions and export controls to choose between their economic ties with our coalition of countries – representing more than half of the world’s GDP – or providing material support to Russia, an economy that is becoming more isolated every day.”

The goal, Adeyemo said, was to keep raising the cost to Russia of evading sanctions and trying to get around an oil price cap imposed by the Group of Seven rich nations and Australia by creating its own alternative ecosystem to sell oil.

Russia had already been forced to divert billions in funds from the war to pay for insurance for oil tankers, shipping and other services, and Washington would seek “additional ways to drive up” those costs, he said, without elaborating.

Echoing remarks made in an interview with Reuters last week, Adeyemo said US and allied officials would warn companies and financial institutions in their own countries – and India and China – against evading sanctions imposed on Russia.

‘Investments in Ukraine’

At the CFR event, Adeyemo said Washington had seen only limited support for Russia from China, adding that he thought Chinese companies were generally keen to stay connected to the global economy and continue doing business with the West.

US and allied officials are also providing “actionable” intelligence to countries, including some of Russia’s neighbors, to enable them to stamp out sanctions evasion. If they failed to act, he said, “we and our partners are prepared to use the various economic tools at our disposal to act on our own.”

US and coalition officials would warn companies and banks in these countries that they faced being cut off from Western markets and financial systems if they did not enforce sanctions.

After the event, Adeyemo told Reuters the United States still hoped for a quick resolution to Russia’s war in Ukraine, but stood ready to support Ukraine over the long term. It was important, he said, to continue to support Ukraine’s sovereignty to make clear that Russia’s invasion was unacceptable.

“We’re doing both – trying to do everything we can to bring the war to a conclusion right away, but also making investments in Ukraine over time so that people know that we’re going to stay over the long term,” he said.

Adeyemo acknowledged that Russia’s economic data looked better than expected at the start of the war, but said the Russian economy was shrinking and growing more isolated.

“One year into this conflict, Russia’s economy looks more like Iran and Venezuela’s than a member of the (Group of 20 major economies),” he said.

Adeyemo said Washington was concerned about deepening ties between Russia and China, but noted that Beijing could not provide Moscow with the advanced semiconductors it needed to replace military equipment lost since the start of the war.

Asked about reports that Chinese President Xi Jinping would visit Russian President Vladimir Putin in coming months, Adeyemo said he hoped Xi would urge Putin to end the war, given the impact on energy and food costs for China, and China’s professed respect for sovereignty.

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