The United States has joined European allies in dramatically escalating financial penalties against Russia over its invasion of Ukraine.
over its invasion of Ukraine, after the West's initial rounds of sanctions failed to deter Russian President Vladimir Putin in his military offensive.Two of the key new measures target the heart of Russia's financial system, its Central Bank, and cut an unspecified number of Russia's banks off from the SWIFT financial network. SWIFT is a vital element of global commerce and banking that moves money from bank to bank around the world.
A look at Saturday's measures and earlier ones. In all, they potentially amount to some of the toughest sanctions imposed on any nation in modern times.The new restrictions that the United States, European Union and United Kingdom announced for Russia's Central Bank would limit the Kremlin's ability to access the more than $600 billion in reserves there.
Combined with the new SWIFT limits announced by Europe and the United States, the Central Bank measure is"likely to cause serious damage to the Russian economy and its banking system," Lowery said. The U.S. has succeeded before in persuading the Belgium-based SWIFT system to kick out a country - Iran, over its nuclear program. But kicking Russia out of SWIFT could also hurt other economies, including those of the U.S. and key ally Germany.The disconnection from SWIFT announced by the West on Saturday is partial, leaving Europe and the United States room to escalate penalties further later.
That includes Russia's two biggest: state-owned SberBank and VTB. Combined, they hold almost $750 billion in assets, the U.S. said, which is more than half of the entire total in Russia.Thursday's sanctions on the banks wield the unique power the U.S. has through the dollar, the currency of choice in business transactions around the world.
The U.S. also went after more of Russia's elites, sanctioning bankers and other powerful associates of Putin in Russia's top financial, political and security circles.Export controls announced by the Biden administration earlier in the week featured another especially strong piece of leverage the U.S. holds - America's semiconductors and other advanced high-tech gear.
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