Treasury Secretary Janet Yellen on Wednesday warned of major consequences for countries that undermine the sanctions that the U.S. and its Western allies have imposed on Russia over the war in Ukraine.
"The unified coalition of sanctioning countries will not be indifferent to actions that undermine the sanctions we’ve put in place," Yellen said in remarks prepared for delivery at the Atlantic Council.
The U.S. and European nations targeted Russia with severe financial penalties that are designed to cripple its economy following the Feb. 24 invasion of Ukraine. Although no countries have subverted the measures yet, there is concern that China – which has criticized the sanctions and so far maintained neutrality on the war – could do so in the future.
Yellen did not specify what the consequences could be for nations that do not abide by the sanctions on Moscow.
The Treasury secretary called on Beijing to persuade Russia to end the war – suggesting that sitting on the sidelines could hurt China's standing in the world.
"Going forward, it will be increasingly difficult to separate economic issues from broader considerations of national interest, including national security," Yellen said. "The world’s attitude towards China and its willingness to embrace further economic integration may well be affected by China’s reaction to our call for resolute action on Russia."
Western allies have already cut off a key part of the Central Bank of Russia by preventing it from selling dollars, euros and other foreign currencies in its roughly $630 billion reserve stockpile; blocked certain financial institutions from the Swift messaging system for international payments; and sanctioned many Russian lawmakers and elites who have close ties to Putin.
The U.S. also ordered a ban on Russian oil imports in addition to blocking new investments in the country.
Yellen acknowledged that international sanctions on Russia have cast a shadow over the global economy, but maintained that the U.S. and its allies are "resolute in our commitment" to holding President Vladimir Putin accountable for the war.
In the U.S., fallout from the war has exacerbated already sky-high inflation. The Labor Department on Tuesday reported that consumer prices soared 8.5% in March from the previous year, the fastest pace since December 1981.
"The ultimate outcome for the global economy of course depends on the path of the war," Yellen said. "Russia could end this unnecessary war and the near-term impact could be contained."
Her speech to the Atlantic Council comes one week before the world's finance ministers and central bank governors meet in Washington for the International Monetary Fund and World Bank Group's annual spring meeting.