Treasury Undersecretary Promises More Action Against Russia
The U.S. is preparing more sanctions and export controls against Russia, including more measures to target the country's defense industrial base and critical supply chains, Deputy Treasury Secretary Wally Adeyemo said March 29 during an event at Chatham House in London. The U.S., which will announce those steps alongside more than 30 allies, is also turning its enforcement focus to companies or countries that may be helping Russia evade the sanctions, Adeyemo said.
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The sanctions will target more sectors that are "critical to the Kremlin’s ability to operate its war machine," Adeyemo said. The designations, which will affect front companies being run by the Kremlin and their supply chains, will "ultimately undermine Russia’s ability to build and maintain the tools of war that rely on these inputs."
"Now that our actions have blunted Russia’s ability to use its central bank assets to prop up its economy and fund [President Vladimir] Putin’s brutal war," the U.S. will target "industries that are critical to Russia’s ability to project power, purchase the military equipment necessary to continue the war effort, and invest in the other tools of repression that are a part of the Kremlin’s playbook," Adeyemo said. "We will focus on using sanctions and export controls to frustrate the Kremlin’s ability to build military equipment."
The administration is also using a multilateral task force announced earlier this month to share information on sanctions enforcement, Adeyemo said (see 2203170040). Although "many" sanctioned people and companies are trying to move their assets to "avoid accountability," Adeyemo told CNBC March 29 that Russia "hasn't been able to evade our sanctions in a meaningful way."
"We know they're going to try and use every means possible," Adeyemo said, including through cryptocurrencies and shell companies. Although some lawmakers are concerned that Russia could turn to cryptocurrency to evade U.S. and global financial restrictions (see 2203030047), the administration doesn't believe Russia can realistically turn to digital currencies to prop up its economy (see 2203090067). "We want to make very clear to crypto exchanges, to financial institutions, to individuals, to anyone who may be in a position to help Russia take advantage and evade sanctions," Adeyemo told CNBC, "we will hold you accountable."
Adeyemo said he hasn't yet seen signs that China plans to help Russia evade sanctions. The U.S. has publicly and privately warned Beijing it will face severe penalties if it aids Russia, including secondary sanctions and strict export controls (see 2203140009). "They find a great deal of value in being able to do business not only in the United States, but across the world in all the G-7 economies," Adeyemo said of China. "And we expect that China and countries around the world will continue to follow those rules of the road."