US Treasury Hits Gazprombank with New Sanctions Over Ukraine War

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The United States imposed fresh sanctions on Russia’s Gazprombank on Thursday, according to the Treasury Department, as President Joe Biden intensifies actions against Moscow for its invasion of Ukraine before his term ends in January.

These sanctions, utilizing the Treasury's most powerful tool, prohibit Gazprombank from processing any new energy-related transactions with the U.S. financial system. They also freeze the bank’s U.S. assets and ban trade with Americans. Gazprombank, one of Russia’s largest financial institutions, is partially owned by the Kremlin-controlled Gazprom gas company. Since the Russian invasion of Ukraine in February 2022, Ukraine has been urging the U.S. to take stronger measures against this bank, which handles payments for natural gas from Gazprom’s European customers.

The sanctions came shortly after the U.S. permitted Ukraine to use ATACMS missiles to strike Russian territory. On Tuesday, Ukraine used these long-range missiles on the 1,000th day of the war.

In addition to targeting Gazprombank, the Treasury imposed sanctions on 50 smaller Russian banks to sever Russia’s financial connections to the global system, aiming to prevent the country from accessing resources for its military needs. The U.S. warned foreign banks maintaining relationships with these entities could face significant risks of sanctions.

Treasury Secretary Janet Yellen emphasized that the sanctions would make it more difficult for the Kremlin to evade U.S. sanctions and continue funding its war efforts. Despite the measures, Gazprombank stated that the sanctions would not impact its operations, and the Russian embassy in Washington did not comment.

New U.S. licenses were also issued to allow American entities to wind down transactions involving Gazprombank and other targeted banks, as well as to divest from the bank’s debt or equity.

Gazprombank serves as a key channel for Russia’s military purchases and is used by the Russian government to pay soldiers, including combat bonuses, and compensate families of fallen soldiers. The new sanctions aim to strengthen Ukraine’s position on the battlefield and support efforts for a just peace.

Though Gazprombank had been under scrutiny for years, the U.S. avoided targeting it earlier due to its role in energy transactions, which could impact European nations. However, the new sanctions are expected to make foreign banks more cautious about dealing with Gazprombank.

European countries such as Slovakia and Hungary are evaluating the impact of these sanctions, and while President-elect Donald Trump could potentially reverse the sanctions once in office, they were imposed under an executive order by Biden.

Experts note that these actions represent a significant step in restricting Russia’s energy revenues. Edward Fishman, a former U.S. official, stated that the Biden administration is serious about cutting off funding for Russia’s energy sector during this critical period. Further actions may follow as the administration seeks to tighten energy sanctions.

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.