US Treasury increases sanctions to severely impair Russia’s military output.

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During the ongoing conflict in Ukraine, the US Treasury increases sanctions to severely impair Russia’s military output.

Washington: On Wednesday, the US Treasury Department imposed fresh penalties on more than 300 organizations and individuals with the goal of preventing Russia from obtaining goods and services necessary to continue its military production for the conflict in Ukraine, including dozens of Chinese component suppliers.

The news was issued on the eve of the G7 leaders’ conference in Italy, where efforts to rein in Russia’s expanding war economy would be a key topic of discussion. The announcement was made together with new export restrictions on semiconductors and other technical goods by the Commerce Department.
 US Treasury
The US Treasury Department on Wednesday announced new sanctions on over 300 entities and individuals aimed at cutting off Russia’s access to products and services needed to sustain military production for its war in Ukraine

Concerns over Russia’s capacity to obtain cutting-edge semiconductors, optical devices, software, and other items required to produce cutting-edge weaponry systems in spite of previous sanctions have grown among US authorities.

The sanctions target companies and organizations that are not affiliated with the target company, such as several electronics suppliers in China, the Middle East, Africa, Europe, and the Caribbean.

The measure does not go so far as to apply secondary sanctions on banks in China and other nations where the Treasury has issued a warning that doing business with Russian organizations may prevent institutions from accessing dollars.

However, the Treasury did announce that it was expanding the scope of the sanctions against Russian banks that had previously been singled out, such as VTB and Sberbank, to include branches and subsidiaries in Kyrgyzstan, China, India, Hong Kong, and other countries.

US Treasury Secretary Janet Yellen stated in a statement that “we are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion and diminishing Russia’s ability to benefit from access to foreign technology, equipment software, and IT services.”

Since Treasury’s new secondary bank sanctions authority went into effect at the end of last year, many large banks have retreated from doing business in Russia, but Moscow is turning to smaller institutions with weaker compliance departments, a senior US Treasury official told reporters.

According to the person, Treasury is enlisting the aid of major Western financial institutions in its efforts to locate these smaller banks that are still processing transactions that support military output.

Targeting companies engaged in the Obsky LNG, Arctic LNG 1 and Arctic LNG 3 projects—three significant liquefied natural gas projects that Russia is attempting to bring online—the Treasury’s new sanctions also provide a new avenue for attempting to restrict Russia’s energy income. These include seven Russian LNG boats that are now under construction, equipment suppliers, shipbuilding companies, and Gazprom Invest and other construction firms connected to the projects.

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