Source: White House e US Treasury

In order to create an immediate and strong pressure on the Russian economy, the USA has been applying various sanctions, creating mainly financial obstacles. The sanctions imposed, in addition to those applied by other countries and organisations, have left the Russian market badly affected, with falls in the rouble’s value of around 20%. In this year’s State of the Union speech, Joe Biden, mentioned the need to punish Russia for its acts against Ukraine.

Main Sanctions

Banking

  1. Ban on transactions with the Russian Central Bank, Wealth Fund and Ministry of Finance of Russia and freezing of Russian assets in the US;
  2. Eliminate Sberbank (holds almost a third of Russia’s overall banking sector assets) and its 25 subsidiaries from the US financial system;
  3. Full block against VTB Bank, Russia’s second largest bank and its 20 subsidiaries, which cannot do any business in the US or with its citizens;
  4. Full block against three other major Russian banks: Bank Otkritie, Sovcombank OJSC and Novikombank;

Companies and Entities

  1. mpediment to withdraw money from the US market by the following companies: Sberbank, AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot and Russian Railways;
  2. Sanctions on Russian elites and their family members

Other Sanctions

  1. Closure of US airspace to Russian airlines;
  2. Use of 30 million barrels of oil from its strategic reserves to cushion the impact of sanctions on Russia
  3. Prevented high-tech exports to Russia;

Impacts

Aviation and Tourism

The airspace closure is aimed to increase the pressure on the Russian economy, with all flights from Russia banned from US airspace.

Energy

Currently, the energy sanctions instituted against Russia are limited to a cascading effect on the banking sector and other restrictions, and a block on several Russian state-owned energy companies, for example Gazprombank, Gazprom, Gazprom Neft, Transneft and RusHydro. This will make business more difficult for these companies. But the natural gas prices practiced by Gazprom in 2021 (up to €186 per megawatt-hour) have given Russia a good margin to live on during a sanctions-imposed period. Oil prices have isolated Russia from the impacts of sanctions, at least in the short to medium term.

Banking and Finance

The actions taken against banks, companies and individuals are aimed to mobilise the assets held and prevent any operations, isolating Russia from the global economy. In practice, these measures freezes all Russian government deposits on US soil and prevents Russians from injecting money into the economy in order to reduce the impact of sanctions imposed by various countries. It adds that over the years since the annexation of Crimea, Vladimir Putin has saved billions of dollars for the military operation in Ukraine and now finds himself forbidden to touch those reserves, limiting his ability to finance this war.

Others

The block in high technology exports is aimed at compromising Russia’s military capability and its advances on Ukrainian territory, since it prevents the export of technology associated with telecommunications, encrypted security, lasers, sensors, technology associated with navigation and aviation.