Today, President Biden and the G7 leaders from Canada, France, Germany, Italy, Japan, the United Kingdom, as well as the European Union will announce new economic measures to hold Putin accountable for his continued attack on Ukraine and the further isolation of Russia from the world. financial system. Each partner will implement procedures consistent with its national operations.
Collectively, these actions will increase pressure on Putin and build on the unprecedented package of economic sanctions and export controls that the United States and more than 30 countries have already imposed on Russia. Today, the ruble is trading at its weakest level ever and is worth less than a penny; The Russian stock market is closed for the longest period in history; The Russian government’s credit rating has been downgraded to “junk” status, and we are witnessing a mass exodus from Russia by the private sector – the result of our historic multilateral coordination and commitment to ensuring that Putin’s war of choice is a strategic failure. Russia is now a global economic and financial pariah.
Today’s announcements include:
The abolition of MFN status in Russia. President Biden will work closely with Congress to deny Russia the benefits of membership in the World Trade Organization and to ensure that Russian imports do not receive most-favoured-nation treatment in our economy. The US Congress has shown bipartisan leadership to abolish Russia’s permanent normal trade relations, and President Biden is looking to sign a bill into law. Together with similar actions taken by the Group of Seven major industrialized countries, following our own national operations, this collective action of more than half of the world economy will deal another serious economic blow to Russia.
Refusal of borrowing privileges in multilateral financial institutions. G7 leaders will agree to ensure that Russia cannot obtain financing from leading multilateral financial institutions, such as the International Monetary Fund and the World Bank. Russia cannot flagrantly violate international law and expect to benefit from being part of the international economic system.
Complete ban on sanctions against additional Russian elites and their family members. This includes Yuri Kovalchuk, the executives of the banks that we have sanctioned, and members of the State Duma who have adopted legislation to recognize the so-called “Donetsk People’s Republic” and the “Luhansk People’s Republic”. This action will follow multiple efforts, along with those of our allies and partners, to target the Russian elites and their family members who are profiting from this war of choice, cut them off from the US financial system, freeze any assets they have in the United States and prohibit their travel to the United States. We will work through the international task force announced on February 26 to pursue the illicit gains of these elites.
Banning the export of luxury goods to Russia. President Biden will sign an Executive Order (EO) that will end the export of luxury goods to anyone located in the Russian Federation. This will ensure that American people will not be supplied with luxury goods, such as high-end watches, luxury vehicles, high-end clothing, fine alcohol, jewelry, and other goods frequently purchased by Russian elites. Today, US exports of products covered by the luxury goods restrictions are worth approximately $550 million annually. The elites who support Putin’s war machine should no longer be able to reap the benefits of this regime and squander the resources of the Russian people.
Ban on US imports of goods from several distinct sectors of the Russian economy. President Biden’s Employers’ Organization will also ban the import of goods from many distinct sectors of the Russian economy – including seafood, spirits/vodka and non-industrial diamonds. This will deprive Russia of more than $1 billion in export revenue, and ensure that American citizens cannot tolerate Putin’s war. The United States retains the authority to impose additional import bans as appropriate.
New guidance from the Treasury Department to thwart sanctions evasion, including through virtual currency. The Treasury Department, through new guidance, will continue to make clear that the Treasury’s expansionary actions against Russia require all U.S. persons to comply with sanctions regulations regardless of whether the transaction is denominated in conventional or virtual currency. The Treasury closely monitors any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currency, and is committed to using broad law enforcement powers to address abuses and promote compliance.
Creation of a body to ban new investment in any sector of the Russian economy. President Biden has already banned new US investment in Russia’s energy sector. This Executive Office will establish the legal authority for future investment restrictions in any sector of the Russian economy, as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, by an American person.