The US will impose sanctions on more than 500 targets on Friday in action marking the second anniversary of Russia’s invasion of Ukraine, deputy US treasury secretary Wally Adeyemo has said.
The action, taken in partnership with other countries, will target Russia’s military industrial complex and companies in third countries that facilitate Russia’s access to goods it wants, Adeyemo told Reuters news agency, as Washington seeks to hold Russia to account over the war and the death of opposition leader Alexei Navalny.
“Tomorrow we’ll release hundreds of sanctions just here in the United States, but it’s important to step back and remember that it’s not just America taking these actions,” Adeyemo said.
The package will be the latest of thousands of sanctions targeting Moscow announced by the US and its allies following Russia’s 2022 invasion of Ukraine, which has killed tens of thousands and destroyed cities.
Among the efforts has been a price ceiling enacted by the US and allies, aimed at slashing Moscow’s revenues from exports of oil and petroleum products.
To reduce funding for the war while still ensuring supplies to the global market, a coalition involving the G7 leading economies, the EU and Australia had set a price cap of $60 per barrel of Russian crude.
Due to the cap, Russia had the choice to either sell discounted oil to coalition countries or invest in building an alternative ecosystem.
In recent months, the coalition has announced plans to tighten compliance for the price ceiling.
The new penalties, which the treasury said were the largest single tranche since the start of the war, come as the US and its allies look to maintain pressure on Russia, despite doubts over whether the US Congress will approve additional security assistance for Kyiv.
President Joe Biden’s administration has exhausted money previously approved for Ukraine, and a request for additional funds is languishing in the Republican-controlled House of Representatives.
“Sanctions and export controls are geared towards slowing Russia down, making it harder for them to fight their war of choice in Ukraine,” Adeyemo said.
“But ultimately, in order to speed Ukraine up, to give them the ability to defend themselves, Congress needs to act to give Ukraine the resources that they need and the weapons they need.“
Experts have warned that the sanctions are not enough to stop Moscow’s attacks.
“What Congress does to pass additional military assistance to Ukraine is going to matter far, far more than anything else they could do on the sanctions front,” Peter Harrell, a former national security council official, said.
The treasury department in December said Russia’s economy had been hit by the sanctions, contracting by 2.1% in 2022.
Russia’s economy is over 5% smaller than had been predicted prior, Rachel Lyngaas, the chief sanctions economist, said on the treasury’s website.
Still, Russia’s economy has performed above expectations, with the International Monetary Fund in January forecasting 2.6% GDP growth for 2024 – a 1.5 percentage point upgrade from an October estimate – after solid 3.0% growth in 2023.
But IMF spokesperson Julie Kozack said on Thursday it was “clear that Russia is now in a war economy”, with military expenditures boosting weapons production, government social transfers propping up consumption and inflation that is rising, despite declines elsewhere.
Reuters and Agence France-Presse contributed to this report