How the U.S. could tighten sanctions on Russia over Ukraine

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WASHINGTON — The United States has imposed several sanctions on Russia over its invasion of Ukraine in February, targeting its central bank, major lenders, oligarchs and Russian President Vladimir Putin.

On Wednesday, Washington warned that the United States would take action against Moscow in the coming days over “fake” referendums that Russia held in the occupied regions of Ukraine.

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Here are some ways the United States could further increase sanctions on Russia:

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EXECUTION OF SANCTIONS

Experts said they expect Washington to continue taking steps to enforce its existing sanctions on Russia and target those who help Moscow evade the sanctions.

The United States could also apply secondary sanctions against designated Russian entities and individuals, which would threaten anyone in the world who transacts with Russia, said Edward Fishman, who worked on Russia sanctions at the State Department during the administration President Barack Obama.

Targeting foreign entities for sanctions evasion would not be surprising, said Brian O’Toole, a former Treasury Department official now with the Atlantic Council think tank.

O’Toole also said he anticipates enforcement action from the Commerce Department, though he said it could be a “slower burn.”

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Commerce could blacklist additional companies for violating its expansive export controls to Russia. Being added to the entity list requires US suppliers to seek a special license before sending to a blacklisted entity.

OLIGARCHS, VIOLATORS OF HUMAN RIGHTS

According to experts, the United States could still impose sanctions on Russian oligarchs and others who have not yet been targeted.

The US State Department’s head of sanctions coordination, James O’Brien, told the Senate Foreign Relations Committee on Wednesday that the US will look for human rights violators in future sanctions packages.

ALIGNMENT OF SANCTIONS

The United States, the European Union and the United Kingdom could harmonize their sanctions lists, which have differences in the names of those who have been designated, O’Toole said.

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“I think leveling the playing field would probably be a smart move for everyone, so there’s no confusion and no one is taking advantage of one jurisdiction against another,” O’Toole said.

The United States could bring its measures against the oligarchs in line with the EU and the UK, which have targeted several Russian oligarchs not yet designated by Washington.

They include billionaire Roman Abramovich and tycoon Mikhail Fridman.

ENERGY

Washington and its G7 partners have said they will put a price cap on Russian oil, starting on Dec. 5, but have avoided directly targeting major Russian energy companies over concerns about prices and supply. the energy

Elizabeth Rosenberg, Treasury’s assistant secretary for terrorist financing and financial crimes, told the Senate Foreign Relations Committee on Wednesday that Russia’s main source of hard currency is energy sales.

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“It is in energy that we need to focus our attention to deny Russia that income,” he said.

The United States could still impose full-blockade sanctions on major Russian energy companies, including Rosneft and Gazprom, Fishman said.

“The biggest card left on the table, of course, is oil sales to Russia,” Fishman said.

The United States could also target Gazprombank with full-blocking sanctions, O’Toole and Fishman said, using Washington’s most powerful sanctions tool and adding it to the SDN list.

“The two main things that remain about energy are blocking companies and the associated bank,” Fishman said.

HARDENED SANCTIONS ON BANKS, STATE COMPANIES

According to experts, Washington could also target other banks and state-owned companies.

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The United States has imposed sanctions on major Russian banks, including Sberbank, the country’s largest lender.

But Washington could target banks that have stepped in to fill the void left by those cut off by the sanctions and are facilitating transactions for designated lenders, O’Toole said.

Fishman said full blocking sanctions on all remaining Russian banks would be a good option.

He added that one of the biggest gaps is the lack of sanctions blocking on major Russian state-owned companies.

O’Brien said Wednesday that Washington would look to the financial sector and high technology, particularly for energy exploitation, in future sanctions actions.

He also said Washington would keep the focus on Russia’s military supply chains.

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TRADE, FINANCIAL EMBARGOES

Washington could extend the embargoes on Donetsk and Luhansk regions to include Zaporizhzhia and Kherson, to cover the four Ukrainian regions where Russia has held referendums, O’Toole said.

US President Joe Biden signed an executive order in February to ban trade and investment between US individuals and the two separatist regions of eastern Ukraine, Donetsk and Luhansk, after Russia recognized as independent.

But Fishman said that because Zaporizhzhia and Kherson are not fully under Russian control, such an embargo may inadvertently hurt Ukrainians.

A full financial embargo on Russia later is another possibility, O’Toole said, although he said he thinks such a move would be unlikely to happen unless there is a direct attack on a NATO member state or if a nuclear weapon is used. .

It would likely be implemented by issuing a new executive order that would prohibit Americans from exporting or importing goods, services or technology from Russia, O’Toole said.

(Reporting by Daphne Psaledakis; Additional reporting by David Lawder, Andrea Shalal, Doina Chiacu, Alexandra Alper and Karen Freifeld; Editing by Mary Milliken, Jonathan Oatis and Daniel Wallis)