U.S. Government Warns About Secondary Sanctions To People Or Entities Supporting Russia’s War
October 17, 2022—As Russia has waged war against Ukraine and Ukraine fought back, Western governments have carefully weighed in on the battle through the global financial system. It’s a powerful economic coalition that comprises 37 countries.
The U.S. government alone issued roughly 1,500 new sanctions and amended 750 more. They target Russia’s defense industrial base, the aerospace sector, the microelectronic industry, financial institutions, elites and oligarchs, luxury goods, and oil refining.
The sanctions are having an impact on the Russian economy. But is it enough to have an impact strong enough to end the war?
Impact of Sanctions
On Friday, the U.S. Treasury Department released a report assessing the strength of the sanctions.
“The strategic intent of our actions is to degrade Russia’s ability to wage its unjust war against Ukraine and prevent Russia from projecting military force beyond its borders,” the U.S. Treasury said. “By restricting Russia’s
-“Impact of Sanctions and Export Controls on Russia’s Military-Industrial Complex”
access to advanced goods, technology and services, the United States and our allies have degraded the Russian defense industry’s ability to replace weapons destroyed in the war, including over 6,000 pieces of military equipment, such as tanks, armored personnel carriers, and infantry fighting vehicles.”
Regarding the impact of sanctions, the U.S. Treasury asserted the following:
- Russia has run out of new semiconductors forcing hypersonic ballistic missile production to nearly cease;
- Russian auto manufacturing fell by three-quarters compared to 2021;
- Russian mechanical plants have closed; and
- $300 billion of assets held by Russia’s central bank are frozen.
As a result, Russia is looking to Iran and North Korea for military supplies, the report said. The Russian government also uses front companies and fraudulent licenses to evade sanctions.
Secondary Sanctions Possible
It’s noteworthy that the government is raising the potential for secondary sanctions. Treasury says it is prepared to target anyone supporting the Russian military-industrial complex or Russia’s war in Ukraine. In June, the U.S. government released an alert about exports that “presenting special concern” due to the possibility they may be converted to military use by Russia or Belarus. The list included commodities such as cameras, vacuum pumps, and GPS systems.
“FAC and the Department of State have and will continue to use their authorities against persons inside and outside Russia that engage in sanctions evasion or circumvention,” the report said.
In a financial sense, it is a global war.
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