President Joe Biden signed an executive order on Thursday imposing tough new sanctions on Russia for alleged election interference, hacking and other “malign activities,” including the current military buildup in Ukraine and the persecution abroad of dissidents such as Alexei Navalny.
- The new measures include for the first time far-reaching financial sanctions, including a ban on U.S. financial institutions’ participation in the primary market for ruble- as well as non-ruble- denominated bonds.
- The U.S. Treasury department designated six Russian technology companies it accused of supporting the country’s intelligence services and blocked the property they or their affiliates might detain in the U.S.
- Ten Russian diplomats were expelled from the Washington embassy. 32 institutions and individuals were sanctioned for their trying to meddle in the 2020 U.S. presidential election.
- The U.S. also slapped sanctions on what it called “disinformation outlets” controlled by Russian intelligence services, and tightened existing sanctions against close Putin associate Yevgeny Prigozhin, the former restaurant owner accused of masterminding the meddling in the 2016 U.S. election campaign and of controlling the mercenary so-called Wagner group.
- The sanctions are in part a response to the cyberattack on SolarWinds software, unveiled in December, which U.S. authorities say allowed Russian hackers to access thousands of companies and government offices.
- Biden said in his executive order that Russia’s activities present an “unusual and extraordinary threat to the national security, foreign policy, and economy of the United States,” and declared “a national emergency to deal with that threat.”
- The announcement came two days after Biden called his Russian counterpart Vladimir Putin to express his concerns about those issues, as well as over the Russian military buildup on Ukraine’s borders, and suggest a bilateral meeting.
The outlook: Putin always took care to appear relaxed after previous sanctions rounds from the U.S. and Europe, but this time it might be different: The Biden version will be much more costly for the Russian economy, even if the curb on trading of Russian debt on international markets only affects for now the primary market, i.e. the original issuance of bonds.
Furthermore, the wide range of reasons cited for the sanctions — which include “extraterritorial activities targeting dissidents or journalists,” as well as attempts to “undermine the security in countries and regions important to United States” and the violation of “well-established principles of international law,” seem to show that Biden is determined to keep his options open for tightening the sanctions even further.
Russia can be expected to retaliate, notably with a tit-for-tat decision on the expulsion of diplomats, but it doesn’t have the financial might to hurt the U.S. economy back.
U.S. officials have indicated that European allies had been kept informed about the current round of sanctions, but the question now is whether they will emulate Washington’s decision, which would broaden its impact.