President Biden’s administration will further isolate the world’s largest country due to conflict in Eastern Europe.
U.S. residents are banned from transacting with Russia’s Central Bank, National Wealth Fund, and Ministry of Finance. Russian assets currently in America will also be frozen.
The White House hopes these sanctions will financially handicap Russian President Vladimir Putin’s proposed invasion of Ukraine.
“Our strategy, to put it simply, is to make sure that the Russian economy goes backwards as long as President Putin decides to go forward with his invasion of Ukraine,” a senior Biden administration official said in a statement.
The prohibitions are already in effect.
“These actions will be effective immediately,” the official said. “We are taking these actions in a way that they will be effective immediately.”
If Washington did not act swiftly, the Central Bank of Russia could have easily moved war funds to different offshore financial institutions.
“We wanted to put these actions in place before our markets opened, because … the Russian Central Bank was attempting to move assets and there would be a great deal of asset flight starting on Monday morning from institutions around the world,” the official said.
“We knew that, ultimately, one of the things that we would need to do to ensure that our sanctions would be effective is at some point go after that war chest, and that is exactly what we have done,” he added.
Since Russia failed to transfer money abroad, the country’s currency and the broader economy are expected to deteriorate rapidly.
“We are seeing the effect of that today: the Russian stock market is not open, the ruble has depreciated a great deal, [and] Russia is taking unprecedented actions to try and support their economy,” the official said.
Biden previously authorized a White House memorandum that provides “immediate military assistance” to Ukraine.
The package potentially includes up to $250 million in financial assistance and $350 million in Department of Defense articles and services, military education, and training.
Ukrainian President Volodymyr Zelensky earlier refused a U.S. offer for his evacuation from the capital of Kyiv.
“The fight is here, I need ammunition not a ride,” he previously said.