The US is making a move to impose new sanctions on Russian banks including President Vladimir Putin’s children. The announcement comes after Zelenskyy said yesterday that “Russia itself must face new painful sanctions.”
President Biden is expected to sign a new Executive Order stipulating that no US person can invest in Russia, a move to isolate Russia from the global economy further.
The new sanctions on Russia will also impose financial sanctions on Russia’s largest bank, Sberbank, and Alfa Bank, Russia’s largest privately-owned financial institution and Russia’s fourth-largest financial institution overall.
The sanctions will also be imposed on President Putin’s adult children, Foreign Minister Lavrov’s wife and daughter, members of Russia’s Security Council, including former President and Prime Minister of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin.
The set of sanctions on family members aims to cut them off from the US financial system and freeze any assets they hold in the United States.
Impact of Sanctions on Russia
These new measures imposed on Russia are building upon the US action earlier this week to cut off Russia’s frozen funds in the United States to make debt payments. While Russia can use the money to pay the debt outside of the US jurisdiction, the goal of these sanctions is to make Putin “choose between draining its available funds to make debt payments or default.”
The White House estimates the following impact of the sanctions on Russia:
- Russia’s GDP will contract up to 15 percent in 2022
- Inflation in Russia is already above 15 percent and will to go higher than that.
- More than 600 private sector companies have already left the Russian market.
- Supply chains in Russia have been disrupted.
- Russia will very likely lose its status as a major economy.
- US exports to Russia have decreased 99 percent compared to last year.