Biden announces sanctions ‘to cut Russia off Western financing’

US President Joe Biden yesterday announced the “first tranche” of sanctions against Russia, including steps to starve the country of financing, saying Moscow had started an invasion of Ukraine.And Biden threatened tougher steps if Russia “continues its aggression.”“We’re implementing sanctions on Russia’s sovereign debt. That means we’ve cut off Russia’s government from Western financing,” Biden said.“It can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either.”Russian President Vladimir Putin did not watch a speech by Biden announcing sanctions and is currently in a meeting, Kremlin spokesperson Dmitry Peskov told the RIA news agency. The US measures also target VEB, Russia’s state development bank, and members of the country’s “elites,” Biden said. “They share the corrupt gains of the Kremlin policies, and should share in the pain as well.”Biden said the responses “have been closely co-ordinated with our allies and partners” and added, “We’ll continue to escalate sanctions if Russia escalates.”However, Washington’s response did not seem to go as far as the European Union, nor as far as some expected.Biden announced “full blocking sanctions” on both VEB and Russia’s “military bank,” which likely means the institutions will have their foreign assets frozen and will be prohibited from using the US financial system.However, the penalties cover fewer financial institutions, and do not appear to have severed the country from the SWIFT system used to move money around the globe.Nor did Biden resort to export controls, which would have cut Russian firms off from key high-tech equipment and software, which some analysts said was a possibility.Starting today, he said, sanctions would begin against Russian elites and their family members as well.“This is the beginning of a Russian invasion of Ukraine,” Biden said.“Russia has now undeniably moved against Ukraine by declaring these independent states.”“As Russia contemplates its next move, we have our next move prepared as well,” Biden said. “Russia will pay an even steeper price if it continues its aggression, including additional sanctions.”On Monday a senior administration official said Russia sending troops to the breakaway regions of Donetsk and Luhansk in Ukraine did not represent a further invasion because Russia had troops there previously. But yesterday, deputy national security adviser Jonathan Finer said an invasion had begun. Biden used similar language.The United States could wield its most powerful sanctioning tool against certain Russian people and companies by placing them on the Specially Designated Nationals list, effectively kicking them out of the US banking system, banning them from trading with Americans, and freezing their US assets.The Biden administration has said it plans to spare everyday Russians from the brunt of US export controls if Russia invades Ukraine, and focus on targeting industrial sectors, a White House official said in late January. Still, “key people” will also face “massive sanctions,” White House national security official Peter Harrell said in a speech in Massachusetts.Meanwhile, Biden met yesterday with Ukrainian Foreign Minister Dmytro Kuleba to “reaffirm” support for Kyiv amid soaring tensions with Russia.Biden assured Kuleba the United States “would continue providing security assistance and macroeconomic support to Ukraine,” while also reiterating Washington’s readiness “to respond swiftly and decisively to any further Russian aggression against Ukraine.”