The US government announced new sanctions Wednesday targeting Russian banks and the two adult daughters of Russian President Vladimir Putin — warning the country should expect “Soviet-style living standards” if it doesn’t end its invasion of Ukraine.
The White House said the US is imposing full blocking sanctions on Sberbank, which holds a third of all Russian bank assets, and Alfa-Bank, which is the country’s largest private bank.
“The reality is, the country’s descending into economic and financial and psychological isolation, and at this rate will go back to Soviet-style living standards from the 1980s,” a Biden administration official told reporters on a background call.
“Even an autocrat like Putin has a social contract with the Russian people. He took away their freedom in exchange for promising stability. And so he’s not giving them stability at the moment. He’s giving them instability and insecurity … And at some point that ought to matter to any leader — if only because they care about staying in power.”
The new bank sanctions freeze any funds within reach of US authorities and bar US citizens or institutions from engaging in transactions — though “there is a carve-out for energy,” the Biden administration official said. Prior sanctions against the banks restricted their use of US dollars for transactions.
President Biden also will sign an executive order Wednesday blocking new US investment in Russia over its invasion of Ukraine, which began on Feb. 24.
Mariya Putina and Katerina Tikhonova face sanctions because “we believe that many of Putin’s assets are hidden with family members and that’s why we’re targeting them,” the administration official said.
Russian Foreign Minister Sergei Lavrov’s wife and daughter will also face sanctions, as will relatives of Russian Prime Minister Mikhail Mishustin and former Russian president and prime minister Dmitry Medvedev.
Biden warned Putin of severe sanctions ahead of his invasion of Ukraine and the US has ratcheted up penalties with strong bipartisan support.
Last month, the president announced bans on imports of Russian oil, natural gas and coal under intense pressure from Congress, which was preparing to pass legislation to force his hand.
The Biden administration’s continued sanctions carveout for financial institutions doing business with Russia’s energy sector is a nod to Western European nations and multinational companies that continue to use Russian fuel.
Biden announced initially limited sanctions against state-owned Russian banks and certain Russian businessmen when tanks rolled across Ukraine’s borders. After criticism, Biden sanctioned Putin’s vast personal wealth and reached an agreement with US allies to partially unplug Russia from the SWIFT international banking system.
Biden has also imposed limits on certain technology exports to Russia and applied sanctions to a growing list of Russia’s elite. However, Russia’s richest woman, the billionaire Yelena Baturina — who allegedly paid $3.5 million in 2014 to a company linked to first son Hunter Biden — has not yet faced sanctions.
Major US companies have also pulled out of Russia, including Visa, MasterCard and McDonald’s.