US to quadruple secondary sanctions on Russia this week – FT

The U.S. Department of the Treasury is set to significantly expand secondary sanctions against Russia this week, according to the Financial Times.

This decision will classify any foreign financial institution transacting with a sanctioned Russian entity as directly collaborating with the Kremlin's military industry.

The move will extend President Joe Biden's executive order from December, which empowered the U.S. Department of the Treasury to impose additional sanctions on foreign financial institutions found to be acting on behalf of any of the approximately 1,200 companies identified by the U.S. government as part of Russia's defense sector.

After this week's changes, the number of such companies will increase to over 4,500, encompassing nearly all Russian companies already under sanctions, even for reasons unrelated to direct support for Russia's war against Ukraine, journalists report.

Among these are banks such as Sberbank and VTB, Russia's largest lenders.

The publication notes that after Biden's December decree, the flow of war-related imports to Russia decreased in early 2024, as financing cross-border trade in these goods became more risky even for banks that have no ties to the United States.

"Secondary sanctions are intended to expand the US’s ability to pursue circumvention by actors who do not have any legal nexus with the US. It means the US can, in effect, enforce its sanctions on people who aren’t otherwise subject to US law," said Emily Kilcrease, a trade and sanctions expert at the Center for a New American Security.

Read also: G7 to call on China to stop supporting Russia in war against Ukraine – Bloomberg