U.S. unveils sweeping sanctions targeting Russia over Ukraine war

The United States announced a raft of sanctions Wednesday aimed at constraining Moscow's war in Ukraine while raising the stakes for foreign banks that still deal with Russia, ahead of G7 leaders' talks this week.

The Treasury Department and State Department's sanctions hit more than 300 targets, including entities in Russia and in countries like China, Turkey and the United Arab Emirates.

Those designated include the Moscow Exchange and several subsidiaries, a move set to complicate billions of dollars in transactions, as well as entities involved in three liquefied natural gas (LNG) projects.

"Today's actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries," said Treasury Secretary Janet Yellen.

"We are increasing the risk for financial institutions dealing with Russia's war economy and eliminating paths for evasion, and diminishing Russia's ability to benefit from access to foreign technology, equipment, software, and IT services," she added.

Secretary of State Antony Blinken said separately that the United States "remains concerned by the scale and breadth of exports" from China to Russia, supplying Moscow's military industry.

Besides fresh sanctions, the Treasury is broadening its definition of Russia's "military-industrial base."

Until now, foreign banks could be sanctioned for supporting Russia's defense industry. The latest step expands the reach of so-called secondary sanctions to all Russian individuals and entities that have already been impacted by US sanctions.

This means foreign financial institutions could be hit for conducting transactions involving any blocked person or designated Russian banks like VTB or Sberbank -- with the list of exposed targets growing from over 1,000 to about 4,500.

Washington is also restricting the supply of IT services and certain software support to people in Russia.

- Global networks -

The latest sanctions impact transnational networks, hitting more than 90 people and entities in places like China, South Africa, Turkey and the UAE, the Treasury said.

The United States charges that goods and services from these foreign networks helped Russia to sustain its war and avoid sanctions.

A senior US official told reporters Wednesday that efforts to restrict Russia's ability to sustain the war in Ukraine have had a "significant impact."

"Global exports to Russia have fallen by almost $90 billion, and US exports to Russia have essentially halted for everything but certain medical items like vaccines," the official added on condition of anonymity.

The Treasury also expanded its list of information for five sanctioned Russian financial institutions to include addresses and aliases of their foreign locations.

In a separate statement, the Commerce Department said it was adding eight Hong Kong addresses to a blacklist, in a move targeting shell companies.

The addresses listed will impact almost $100 million in high-priority items including semiconductors, the US official said, adding that much of the circumvention appears to be going through entities in China.

Washington's actions come ahead of this week's G7 summit in Italy.

The White House earlier said that steps to aid Ukraine using frozen Russian assets would be announced during the gathering.

G7 leaders hope to reach a deal on using the profits from the interest on 300 billion euros ($325 billion) of immobilized Russian central bank assets to help Kyiv. The idea is to use the profits as collateral for a loan of up to $50 billion.