Biden administration to impose new Russia sanctions banning all new investment in Russia
White House predicts 'economic collapse' of Russia's GDP
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President Biden's administration is set to announce a slew of sanctions against Russia on Wednesday as the country's invasion of Ukraine continues.
The White House is expected to roll out aggressive sanctions on U.S. companies doing business in Russia or with organizations or individuals directly linked to the state. The policy will likely end all new attempts at investment in the country moving forward. Russian financial institutions such as the national bank and state-run businesses will be hit hard as well.
"This will include a ban on all new investment in Russia, increased sanctions on financial institutions and state owned enterprises in Russia, and sanctions on Russian government officials and their family members," a source familiar with the proposed sanctions told FOX Business.
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"These measures will degrade key instruments of Russian state power, impose acute and immediate economic harm on Russia, and hold accountable the Russian kleptocracy that funds and supports Putin’s war," the source said. "These measures will be taken in lock step with our allies and partners, demonstrating our resolve and unity in imposing unprecedented costs on Russia for its war against Ukraine."
A Russian national flag above the headquarters of Bank Rossii, Russia's central bank, in Moscow, Russia, on Monday, Feb. 28, 2022. The Bank of Russia acted quickly to shield the nations $1.5 trillion economy from sweeping sanctions that hit key banks (Photographer: Andrey Rudakov/Bloomberg via Getty Images / Getty Images)
This flurry of new sanctions – combined with the financial penalties already lobbied against Russia since the beginning of the invasion – is expected to continue tanking the nation's economy. Russian officials have previously acknowledged that international penalties will likely spoke unemployment and inflate their currency.
"We had already concluded that Russia committed war crimes in Ukraine, and the information from Bucha appears to show further evidence of war crimes. And as the President said, we will work with the world to ensure there is full accountability for these crimes. One of those tools is sanctions – and we have been working intensively with our European allies on further sanctions," the source added.
The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars.
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Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen.
Russian President Vladimir Putin attends a meeting with top officials on support to aviation industry in Russia amid western sanctions vis videoconference at the Novo-Ogaryovo residence outside Moscow, Russia, Thursday, March 31, 2022. (Mikhail Klime (AP / AP Images)
But the Treasury Department had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments came due, including a $552.4 million principal payment on a maturing bond, the U.S. government decided to cut off Moscow's access to the frozen funds, according to a U.S. Treasury spokesperson.