Deputy Assistant Secretary for European and Eurasian Affairs Molly Montgomery, Deputy Assistant Secretary for Economic and Business Affairs Erik Woodhouse, and Acting Deputy Assistant Secretary for International Security and Nonproliferation Affairs Gonzalo Suarez, have shed light on the sanctions the United States has imposed on the Russian Federation in coordination with Allies and partners, on account of Russia’s war on Ukraine, reports SADIQ YISHAU.
UNITED States Deputy Assistant Secretary for European and Eurasian Affairs Molly Montgomery, Deputy Assistant Secretary for Economic and Business Affairs Erik Woodhouse, and Acting Deputy Assistant Secretary for International Security and Nonproliferation Affairs Gonzalo Suarez, know the details of the sanctions the United States has imposed on the Russian Federation. Montgomery is responsible for U.S. relations with Western Europe and the European Union. Woodhouse is responsible for counter threat finance and sanctions and Acting DAS Suarez oversees ISN’s counterproliferation efforts in the areas of Weapons of Mass Destruction (WMD) and dual-use technologies.
On Thursday, they revealed the details of the American sanctions against Russia at a forum organised by the Washington Foreign Press Centre.
Montgomery, while opening the floor for the discussion, said since Russia’s February 24th full-scale invasion, the U.S. has continued delivering on its commitment to support the people of Ukraine, including building on its unprecedented sanctions to hold President Vladimir Putin and his enablers accountable.
“These measures are the result of continued close cooperation with our allies and partners, including the EU and its member states, G7 countries, and partners in the Indo-Pacific. We are grateful for the coordination and solidarity of our allies and partners in support of Ukraine’s political independence, sovereignty, and territorial integrity, and importantly, for the significant sanctions they have each put in place to hold the Kremlin accountable.
“First, turning to the support that we have provided Ukraine. With funding from the two Ukraine supplemental appropriations bills totaling over $53 billion, we are concurrently supporting the people of Ukraine through security, humanitarian, economic, and governance assistance. Since Russia’s full-scale invasion of Ukraine, the United States has provided approximately $12.5 billion in assistance in these sectors. The United States is providing more than $1.2 billion in humanitarian assistance to refugees, the displaced, and vulnerable populations and communities in the region this year, including 368 million announced just a few days ago,” he said.
The United States, Montgomery said, has provided $4 billion in budget support to the Government of Ukraine through World Bank mechanisms. It intends to work with Congress to provide the Government of Ukraine with an additional $4.5 billion in direct budget support over the next five months.
“Using funds from the first and second Ukraine supplemental appropriations and working with Congress, we also intend to spend over $900 million more to support the continuity of Ukraine’s government, strengthen societal resilience and civilian security forces, and hold Russia accountable for its actions.
“On security assistance, the United States has provided approximately $8 billion in military assistance since the beginning of the Biden administration, including via 15 presidential drawdown authority packages to provide arms and equipment from U.S. stocks. Simultaneously, we are coordinating with our allies and partners to ensure that the Russian Government feels the compounding effects of our economic restrictions and robust sanctions,” he said.
According to him, the sanctions have led to over 700 private-sector companies leave Russia and rethink both short and long-term investments there, including in the energy sector. He said the World Bank projects that the Russian economy would contract by 11.2 percent, the steepest contraction Russia has seen in nearly 30 years.
“The cumulative impact of the measures we have collectively taken with our allies and partners will compound over time and will erode Russia’s economic growth. The export controls we have put in place will weaken Russia’s defense and technology-related sectors. We are continuing to work closely with our allies and partners to take further action to crack down on sanctions evasion, increase pressure on Putin and his enablers, and promote accountability for entities and individuals implicated in the Russian Federation’s abuses and atrocities in Ukraine.
“These sanctions will continue to add to the extensive economic measures that are imposing significant costs on Russia for its unprovoked war against Ukraine. So far, the United States has added 1,000 parties to Treasury’s Specially Designated Nationals and Blocked Persons List, and over 300 parties have been added to Commerce’s Entity List, and my colleagues will discuss this in greater detail in a moment,” he said.
For Woodhouse, partnership with others has aided the sanctions against Russia.
“By acting together, we have shown that our response is not motivated by any one country’s foreign policy or economic objectives. Rather, we are defending our shared principles – our opposition to aggression and to widespread violence against civilians, and our commitment to Ukraine’s sovereignty and to a rules-based global order,” he said.
Measures imposed
America, Woodhouse said, has targeted Russia’s financial sector and key sources of revenue that sustain President Putin’s war machine. It has sanctioned Russia’s largest financial institutions and major state investment funds, and its partners in Europe have removed many of these banks from the SWIFT system that is critical to cross-border payments.
“By working with our partners, we’ve been able to immobilise a substantial part of the hard currency reserves of the Central Bank of Russia,” he said.
America has also degraded Russia’s defense sector and other critical sectors feeding its military-industrial complex. It designated major Russian defense companies as well as a long and growing list of other companies and individuals associated with Russia’s defense sector and weapons manufacturing. It followed these actions with extensive export controls that cut Russia off from critical goods that it needs to sustain the military.
America has also targeted Russia’s oligarchs and their networks and assets, as well as hundreds of Russia’s political, financial, and corporate leaders.
Woodhouse said: “These elites have supported and benefitted from their association with the Kremlin and must continue to be held to account.
“In sum, our actions have severed Russia’s ties to major trading partners, halted access to important inputs, and have had a major impact on Russia’s economy. In the span of a few months, U.S. exports to Russia, including critical technology inputs needed to maintain the Russian military, have decreased precipitously. Russia’s imports of good from around the world could fall by up to half, and factories across Russia are struggling to maintain production. As my colleague mentioned, Russia’s GDP will likely decline by double digits, and inflation is expected to reach almost 16 percent.
“Our measures will continue to sap Putin’s military-industrial complex of critical components, prevent the Russian central bank’s foreign reserves from propping up an ailing economy, and deprive Moscow of their resources needed to wage this war. Effectiveness of our measures will only compound over time to further isolate Russia from the world economy.”
According to him, the most effective way to ratchet up the pressure on Russia is to restrict the revenue it generates from energy sales while maintaining stable energy supply rather than restricting the flow of oil exports.
“Allowing Russia to trade expensive oil only leads to more money leaving the pockets of oil consumers and going into the pockets of Russia’s energy exporters.
“This is why President Biden and other G7 leaders are actively exploring a limit on the price of Russian oil, the restrictions on maritime transport services. We’re working with G7 partners and consulting with a range of other countries on a more detailed proposal for how this can be implemented,” he added.
Defence matters
Suarez, in his contribution, said America and its partners and allies imposed the most significant set of export controls imposed on any one country.
“These controls were broad but targeted. They were designed to deprive Russia of the technology and equipment it needs in its defense industrial sector. These controls will force Russia to seek critical items via nontraditional suppliers at greater financial costs for lesser quality goods and at the risk of law enforcement actions.
“Since February, we followed up those export controls with a flurry of sanctions on critical companies in Russia’s defense industrial and technology sectors. To date we have sanctioned dozens of defense and high tech-related companies. These companies were sanctioned because of the important role they play in Russia’s military supplies and R&D. For example, on June 28, Rostec, United Aircraft Corporation, and United Engine Corporation were all sanctioned. These companies are central to Russia’s defense efforts. For example, Rostec is Russia’s most important defense conglomerate. The United Aircraft Corporation builds and maintains all of Russia’s combat aircraft. And the United Engine Corporation develops, produces engines for Russia’s – for Russian weapon systems, including aircraft and naval vessels.
“And even before that, on April 28th we announced sanctions on one of Russia’s largest state-owned enterprises, the joint stock company United Shipbuilding Corporation, which is responsible for building Russia’s largest warships. We also sanctioned 28 of its subsidiaries and eight members of its board of directors,” he concluded.
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