Two days ago, the United States expanded sanctions against Russia, including targeting Chinese companies that export semiconductors to Moscow in a new attempt to undermine the Russian military.
The US Treasury Department announced that it was “the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy,”, threatening a number of players with loss of access to the US market, Reuters reports.
The US also says it has taken steps to restrict Russian access to various types of US software and information technology services, and has targeted an additional 300 individuals and entities in Russia, Asia, Europe and Africa for sanctions.
At the same time, the US Department of Commerce says it is imposing sanctions on Hong Kong-based shell companies that supply semiconductors to Russia, and that it has “taken actions” that are expected to affect exports of “high priority items” such as nearly $100 million worth of microchips to Moscow.
Sanctions on the Moscow Stock Exchange
The list of products that Russia will no longer be allowed to import will be expanded to include not only US-origin products, but also US-branded products manufactured in third countries.
They say that US-made microchips and other technologies have frequently been found in Russian equipment – including drones, radios, missiles and armored vehicles – and that the new sanctions are being imposed to stop this.
– Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries, US Treasury Secretary Janet Yellen said in a statement.
New sanctions were also imposed on the Moscow Exchange – forcing an immediate halt to dollar and euro trading on the Russian market.
“Global financial embargo”
Peter Harrell, who served as White House director of international finance in 2021 and 2022, described the latest sanctions as a “paradigm shift” because they put foreign banks at risk of being shut out of the US financial system if they do business with major Russian banks.
– For the first time, the U.S. is shifting towards something that begins to look like … an effort to set up a global financial embargo on Russia.
– The message here is really one to banks in China and Turkey and the UAE and elsewhere outside of the G7 they face sanctions for continuing to engage in transactions with the big Russian banks and other sanctioned Russian banks, he continued, saying that these banks are now expected to make a “major retreat” from Russia.
Opinions are divided on whether the sanctions against Russia are really effective, and while their defenders argue that they are, critics point out that the impact appears to be limited, while the sanctions are also hitting European economies hard.
