President Joe Biden (L) and President Vladimir Putin.
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The Biden administration on Thursday imposed a slew of new sanctions against Moscow for alleged interference in the 2020 elections, a colossal cyber-attack on US government and corporate networks, illegal annexation and occupation of Crimea, and human rights violations.
Today, the US Treasury Department’s Office of Foreign Assets Control (OFAC) has taken sweeping action against 16 entities and 16 individuals attempting to influence the 2020 US presidential election as directed by the leadership of the Russian government, the minister said. of Finance. in a statement. It also announced sanctions against five individuals and three entities linked to the Russian occupation of Ukraine’s Crimean region and human rights violations.
In addition to widespread sanctions enacted by the Treasury Department, the State Department has announced that it will expel 10 officials from Russia’s diplomatic mission in the United States.
The sanctions come after President Joe Biden’s phone call to Russian leader Vladimir Putin this week, and as Russian troops pile up near the border with Ukraine.
Washington formally accused Russia’s foreign intelligence agency, or SVR, of being behind the SolarWinds cyber attack published late last year and described by cybersecurity experts as one of the largest and most sophisticated hacking operations in history.
“The US intelligence community is very confident in its assessment of attribution,” said the Treasury Department’s publication. The hack gave hackers access to the software used by thousands of government agencies and businesses.
The sanctions are also in response to a March report by the U.S. Director of National Intelligence, which concluded that Russian President Vladimir Putin had approved attempts to meddle in the 2020 election in favor of former President Donald Trump. .
The Russian government has denied any wrongdoing.
Biden also signed an executive order on Thursday that allows Washington to sanction any sector of Moscow’s economy, significantly expanding the scope of sanctioning authorities.
Under this new authorization, US financial institutions are prohibited from conducting transactions in the primary market for new ruble or non-ruble-denominated bonds issued after June 14.
“The president has signed this sweeping new authority to deal with Russia’s ongoing and growing malicious behavior,” Finance Minister Janet Yellen said in a statement welcoming the move.
The Ministry of Finance is using this new authority to impose charges on the Russian government for its unacceptable behavior, including by limiting Russia’s ability to fund its activities and targeting malicious and disruptive cyber capabilities. of Russia, ”she added.
Deteriorating relations between the US and Russia
A tougher stance on Russia was one of Biden’s commitments on foreign policy. The measures announced Thursday tie in with a series of earlier steps: the Obama administration’s funding restrictions on large Russian companies such as Rosneft, and the Trump administration’s ban on US entities to buy Russian government bonds in foreign currency.
“Today’s US sanctions continue the general trend of deteriorating relationships since the annexation of Crimea,” Maximilian Hess, chief political risk at London law firm Hawthorn Advisors, told CNBC.
“The most important part” of these sanctions, he said, “is the Russian government’s exclusion of US entities from the primary market for ruble-denominated debt.”
However, Hess noted that this “will not have a major impact, especially given Russia’s manageable indebtedness”.
For Timothy Ash, senior emerging markets strategist at Bluebay Asset Management, the measures are far from harsh.
“They’re like guys, come on, you have to do better than this,” Ash wrote in a note after the announcement.
Sovereign primary still allows US entities to hold this debt. So US institutions cannot buy Russian sovereign debt in primary issue, but can persuade their Russian banking friends to buy it for them in the first place, compensate them. and then buy it in the subordinate. “
The ruble offset some of the daily losses against the dollar shortly after the sanctions news, trading at 76.3025 against the dollar at 4 p.m. local time, compared to 77.0718 just before the details of the sanctions were announced.
Russian troop build-up on the border with Ukraine
Biden-Putin’s appeal on Tuesday, at least the second between the two men since Biden took office in January, comes as the United States and other Western countries tire of Russia’s growing military build-up along the Ukraine border, where it has seen dozens years has accumulated. thousands of troops and tanks.
“We now see the largest concentration of Russian troops on Ukraine’s borders since 2014,” said Secretary of State Antony Blinken on Tuesday after a visit to NATO headquarters in Brussels. “This is a major concern not only for Ukraine, but also for the United States.”
Regional experts say this move could be an attempt to test Biden’s courage and intimidate Ukraine; the more pessimistic outlook suggests its aim is to provoke Ukraine into a new conflict.
Biden in the telephone conversation with Putin “emphasized the unwavering commitment of the United States to the sovereignty and territorial integrity of Ukraine,” according to a White House lecture.
Biden suggested holding a summit somewhere outside the US and Russia “to discuss all the issues” facing the countries.
The Kremlin said in a statement later on Tuesday that Biden had “suggested considering the possibility of holding a personal summit meeting in the near future.”