(Bloomberg) — President Joe Biden imposed stiff sanctions on Russia over its invasion of Ukraine as Western nations warned that Kyiv could fall within hours.
As Russian tanks, troops and aircraft pushed closer to Ukraine’s capital city, Biden, speaking to the nation from the White House, promised to inflict a “severe cost on the Russian economy” that will hamper its ability to do business in foreign currencies.
“This is a dangerous moment for all of Europe,” Biden said, adding that the “next few weeks and months will be hard on the people of Ukraine.”
The Russian military effectively eliminated Ukraine’s air defenses and rapidly advanced across the neighboring country, meaning Ukraine’s capital could quickly be overrun as well, a senior Western intelligence official said.
After weeks of warnings that an attack would bring about a “massive” economic response, Biden announced that the U.S.
would sanction Sberbank — Russia’s largest lender — and four other financial institutions that represent an estimated $1 trillion in assets, as well as a broad swath of Russian elites and their family members.
“The sanctions we imposed exceed anything that’s ever been done,” Biden said.
“The sanctions we imposed have generated two-thirds of the world joining us. They are profound sanctions.”
The U.S. will also implement export controls designed to cut Russia off from semiconductors and other advanced technology crucial to the military, biotechnology, and aerospace industries.
Rules allow the U.S. to restrict exports to Russia from anywhere in the world using American technology, including software.
The U.S. also plans to impose new restrictions on Russia’s largest state-owned enterprises, blocking them from raising money from U.S.
and European investors, Biden said.
Biden’s Inner Circle Feared Sanctions Wouldn’t Stop Putin
But Russia will not be barred from the Swift international banking network because Europe opposed that action, Biden said.
But the sanctions imposed Thursday against major Russian banks should have a similar effect and limit Russia’s ability to do business in dollars, Euros, and pounds, he said.
The U.S. leader said sanctions were a long-term tool to pressure Putin and were never expected to prevent an attack.
The penalties will “take time,” adding “he’s going to test the resolve of the West to see if we stand together and we will.”
But in launching Russia’s most sweeping military action in decades, Putin has defied global condemnation and new rounds of sanctions.
Putin has threatened other countries that may interfere with his Ukraine offensive with historic consequences.
Putin’s audacity is a troubling development for Biden and European allies. The stakes are high for Biden, who has promised to uphold the post-war geopolitical order that Russia’s offensive now threatens.
The latest round of sanctions follow the administration’s decision Wednesday to target the company that built the Nord Stream 2 gas pipeline from Russia to Germany.
That came on top of a sanctions package announced Tuesday following Putin’s recognition of breakaway territories in the Donbas region of eastern Ukraine as independent states.
To cushion the impact of the conflict and fresh sanctions on Americans, Biden said the U.S.
will release additional barrels of oil from the U.S. Strategic Petroleum Reserve as conditions warrant.
The U.S. already authorized the release of 50 million barrels of crude from the reserve last year, well before Russia’s invasion of Ukraine.
“I will do everything in my power to limit the pain the American people are feeling at the gas pump.
This is critical to me,” said Biden — who has seen inflation surge in recent months. “But this aggression cannot go on. If it did, the consequences for America would be much worse.”
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
