The US announces sanctions including a ban on new investments in Russia

The US is ready to announce a ban on new investments in Russia while increasing sanctions against the country’s financial institutions, state-owned companies and government officials, people familiar with the matter said on Tuesday.

“These measures will weaken key instruments of Russian state power, inflict acute and immediate economic damage on Russia, and hold accountable the Russian kleptocracy that funds and supports Putin’s war,” one of the people said, adding that the new sanctions would be unveiled Wednesday and coordinated with the G7 and the EU.

“These actions are being taken in lockstep with our allies and partners to demonstrate our determination and unity to impose unprecedented costs on Russia for its war against Ukraine,” the person added.

Requests additional sanctions on Moscow have multiplied in recent days after mounting evidence of war crimes in Ukraine, including a massacre of civilians in the town of Bucha, on the outskirts of the capital Kyiv. The EU decided this week to ban Russian coal and other measures to further reduce its dependence on energy imports from Russia.

The US already had it forbidden New investment in Russia’s energy sector, but the move expected on Wednesday would apply the ban to the entire Russian economy as part of a package designed to send the country “further down the path of economic, financial and technological isolation,” the person said trust the plan.

The US and its allies have imposed massive sanctions on Russia since its invasion of Ukraine, including a ban on all transactions with the Kremlin’s central bank. Finding additional ways to punish Moscow economically without risking a major negative impact on the global economy is becoming increasingly difficult.

At the same time, the US and EU are trying to step up enforcement of existing sanctions against Russia to limit Moscow’s ability to evade the financial penalty by moving assets to other jurisdictions around the world.

Jake Sullivan, the US national security adviser, on Monday defended the aggressive use of sanctions against criticism that they had failed to stop the war.

“It will take time to crush the elements of Russian power within the Russian economy, to hit hard on its industrial base, to hit the revenue streams that have sustained this war and sustained kleptocracy in Russia,” he said.

“[Sanctions] are a crucial tool to ultimately achieve a better outcome for this conflict than would otherwise be the case,” he added.

Separately, the U.S. Treasury Department announced on Tuesday that it is imposing sanctions on Hydra, the Russian dark web marketplace, and Garantex, a virtual currency exchange that operates largely out of Russia.

launched in 2015, Hydra is the largest marketplace on the dark web by revenue. It is popular among cyber criminals who are looking for hacking tools, money laundering services, and want to trade stolen data and drugs. The Treasury Department said both Hydra and Garantex were being used by ransomware criminals — many of whom operate with impunity from Russia or Russia-affiliated countries — to launder millions of dollars in proceeds from their crimes.

Western experts warn of an explosion of financially motivated cybercrime from Russia as existing sanctions bite and damage the economy.

“The global threat of cybercrime and ransomware originating in Russia, and the ability of criminal leaders to operate there with impunity, is of deep concern to the United States,” said Treasury Secretary Janet Yellen. “Our actions today send a message to criminals that you cannot hide on the dark web or its forums, and you cannot hide in Russia or anywhere else in the world.” The US announces sanctions including a ban on new investments in Russia

Adam Bradshaw

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