NEW YORK, Feb. 24, 2022– The United States acted swiftly today against what President Joe Biden called a “brutal assault on the people of Ukraine,” by imposing a set of economic sanctions on Russia in response to the further invasion of the European nation.

The sanctions are expected to have “severe economic costs that will have both immediate and long-term effects on the Russian economy and financial system,” according to the U.S. Department of the Treasury.

The Office of Foreign Assets Control, known as OFAC, imposed measures against Russia’s top financial institutions, including the two largest banks and almost 90 financial institution subsidiaries around the world, the Treasury said in a public statement. The measures also affect additional Russian elites and their family members and imposing additional new prohibitions related to new debt and equity of major Russian state-owned enterprises and large privately owned financial institutions. “This will fundamentally imperil  Russia’s ability to raise capital key to its acts of aggression,” the Treasury said in the statement.

Denouncing President Vladimir V. Putin of Russia for launching a “brutal assault on the people of Ukraine” overnight, Mr. Biden put the full weight of history on the Russian leader. “Putin is the aggressor. Putin chose this war,” Mr. Biden said in an address to the nation from the White House. “And now he and his country will bear the consequences,” he added.

The U. S. consulted closely with allied nations and partners and the actions were taken pursuant to Executive Order (E.O.) 14024, “which authorizes sanctions against Russia for its harmful foreign activities, including violating core principles of international law such as respect for the territorial integrity of sovereign states,” according to the statement.

The sanctions target Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank), and will “drastically altering their fundamental ability to operate,” the Treasury said. Russian financial institutions conduct about USD46 billion worth of foreign exchange transactions globally, on a daily basis, 80% which are in U.S. dollars and “the vast majority of those transactions will now be disrupted,” the U.S. said in the statement. “The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency, and security of the U.S. financial system.”

The Pentagon said on Thursday that it was sending an additional 7,000 troops to Europe, after Russia’s invasion of Ukraine launched the biggest land war in Europe since World War II, The New York Times reported on website. Defense Secretary Lloyd J. Austin III ordered the deployment of an armored brigade combat team to Germany to reassure NATO allies, the Pentagon said in a statement. In particular, American military officials want to send another message: while the United States is staying out of Ukraine, it will not hesitate to act if President Putin turns his eye toward a member of the Atlantic alliance.

Three More Banks, Putin’s Inner Circle

OFAC also imposed blocking sanctions on three major Russian financial institutions: Public Joint Stock Company Bank Financial Corporation Otkritie (Otkritie), Open Joint Stock Company Sovcombank (Sovcombank), the third largest privately owned financial institution in Russia by total assets, and Russia’s ninth largest bank overall; and Joint Stock Commercial Bank Novikombank (Novikombank) a state-owned and among the 50 largest financial institutions in Russia.

“On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars,” according to the Treasury.

The sanctions also target elites close to the Russian President for their disposition “to pillage the Russian state, enrich themselves, and elevate their family members into some of the highest positions of power in the country at the expense of the Russian people,” statement said. The individuals are Sergei Sergeevich Ivanov,  Sergei Borisovich Ivano, the Special Presidential Representative for Environmental Protection, Ecology, and Transport. Andrey Patrushev, son of Nikolai Platonovich Patrushev.

Mr. Platonovich Patrushev is the Secretary of the Russian Federation Security Council and is reported to be a longtime close associate of Putin. Nikolai Patrushev was previously designated in April 2018 for being an official of the GoR. Patrushev’s son, Andrey Patrushev, served in leadership roles at Gazprom Neft and is employed in Russia’s energy sector.

Ivan Igorevich Sechin, is the Chief Executive Officer (CEO), Chairman of the Management Board, and Deputy Chairman of the Board of Directors of Rosneft, one of the world’s largest publicly traded oil companies.

Sanctions were also imposed on senior executives at state-owned banks, like Kremlin-linked elites, including Alexander Aleksandrovich Vedyakhin, the First Deputy Chairman of the Executive Board of Sberbank as well as Andrey Sergeyevich Puchkov and Yuriy Alekseyevich Soloviev two high-ranking VTB Bank executives who work closely with VTB Bank chief executive Andrei Kostin, whom OFAC designated in April 2018 pursuant to E.O. 13661.

In its assessment of the first stages of the invasion, the Pentagon said that Russian military forces are moving to decapitate the Ukrainian government in Kyiv, according to the New York Times. Ukraine also announced that Russian forces have seized the city of Chernobyl.

President Emmanuel Macron of France called President Putin of Russia, according to the Kremlin. The two had “a serious and frank exchange” about Ukraine, and Mr. Putin “gave an exhaustive explanation of the reasons and circumstances” surrounding the invasion, according to a Kremlin statement. It was Putin’s fourth exchange of the day with a foreign leader, the New York Times reported.

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Commenting on the sanctions, Clay Lowery, Executive Vice President for the Institute of International Finance, highlighted that today’s decisions “do not include disconnecting Russia from the SWIFT global payments system, but the U.S. signaled this option was still on the table, leaving room for escalation.”

Lowery added that these sanctions will have a “significant impact” on Russia’s overall economy, and average Russians will feel the cost. “These sanctions target Russia’s domestic financial system, causing bank runs and forcing Russia’s central bank to continue hiking rates. As a result, we are likely to see negative growth in an economy that has already been hindered by increasing isolationism,” the executive said in a public statement released in Washington.

Note: Story Updated at 5:01pm EST to add comments by Clay Lowery in the last two paragraphs.

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Leandro Gabin contributed to this story from Buenos Aires, Argentina.

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