Ukraine crisis: what next for the rest of the world?
Administration officials have studied how the sanctions will affect each of the major banks, including Russia’s two biggest banks, Sberbank and VTB. Sberbank accounts for about a third of the assets in the country’s banking sector, and VTB owns more than 15 percent. Some experts doubt the administration will put those two banks on the SDN list, fearing consequences for the Russian and global economies. For now, US officials are unwilling to cut all Russian banks from SWIFT, the crucial Belgian money transfer system used by more than 11,000 financial institutions worldwide.
The Treasury Department lists other sanctions that impose costs while inflicting less widespread suffering. For example, it can put a bank on a list that prevents it from doing any transactions involving the dollar. Many international commercial transactions are conducted in the US dollar, the currency that supports the global economy.
The Treasury Department is also expected to put more Russian officials, businessmen and companies on the sanctions list.
By Thursday afternoon in Russia, the country’s stock market had fallen nearly 40 percent.
The Commerce Department is planning to restrict exports of some US technologies to Russia, a tactic the Trump administration used to block Chinese telecommunications company Huawei. Control would damage the supply chain for some Russian regions. US officials said their targets included the defense industry and the oil and gas industry.
European officials are expected to announce sanctions similar to many of those planned by the United States, as they did this week. However, they have been more wary of imposing the harshest sanctions because of the continent’s strong trade with Russia.
Although Mr Biden has said he would consider any possible sanctions, US officials do not for now plan major disruptions to Russia’s energy exports, which are pillars of the country’s economy. Europe is dependent on products, and a rise in oil prices around the world will lead to more inflation and more problems for politicians. However, Germany announced this week that it would not certify Nord Stream 2, a new natural gas pipeline connecting Russia and Western Europe. On Wednesday Mr Biden announced sanctions on a subsidiary of the big Russian energy company Gazprom, which built the pipeline and plans to operate it.
Understand Russia’s attack on Ukraine
What is at the root of this attack? Russia considers Ukraine to be within its natural sphere of influence, and it has been alarmed by Ukraine’s proximity to the West and the possibility of the country joining NATO or the European Union. While Ukraine is part of neither, it receives financial and military aid from the United States and Europe.
“We have been clear, we have been clear with the American people that our measures – the measures we have in place and are ready to impose on the Russian Federation – will certainly not be cost-free to the Russian Federation,” said Ned Price, foreign A spokesman for the department said on Wednesday. “But they also won’t be completely cost-free to the rest of the world.”
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