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US Treasury: More Western sanctions to target Russian economy, supply chains

US Treasury: More Western sanctions to target Russian economy, supply chains

by host

LONDON — The U.S., EU and other allies plan further sanctions against Russian supply chains and economic sectors that play a key role in the war in Ukraine, U.S. Deputy Treasury Secretary Wally Adeyemo said.

Speaking in London on Tuesday at the start of a European trip to consult allies on sanctions against Russia, Adeyemo said the aim was to undermine “the Kremlin’s ability to operate its war machine.”

“In addition to sanctioning companies in sectors that enable the Kremlin’s malign activities, we also plan to take actions to disrupt their critical supply chains,” he told an event held by the Chatham House think tank.

Adeyemo said the U.S. aim is to combine exports controls “which will bite over time” with economic sanctions that have an immediate effect.

“Russia does not produce a number of the things internally that they need to build their military equipment or to build things for their economy,” he said.

“Using our export control tool puts us in a position where we can disrupt that supply chain. Using the tools of financial sanctions puts us in a place where we can also freeze the assets, not only of those Russian companies that are helping to build the military equipment, but also to freeze the assets of the alternative suppliers potentially that they are using in order to go after them quickly.”

These sanctions will be taken in coordination with the “more than 30 partners and allies” that have formed a “coalition in response to Russia’s invasion of Ukraine,” he added.

Adeyemo did not name any particular sector or company, but said the U.S. and its allies are “committed to taking additional significant steps to constrain the Russian economy, for as long as Russia’s invasion continues.”

He said the international system that enabled the sanctions against Russia and Belarus needs strengthening, adding that governments needed to finalize the global minimum corporate tax agreement and tackle food insecurity linked to disrupted supplies from Ukraine.

Unilateral sanctions should be avoided, he added, in order to protect the efficacy of the economic measures, which must be tied to clear policy objectives and could be “reversed” when allies conclude Russia’s “behavior has changed.”

Adeyemo will travel to Brussels later Tuesday, where he is set to announce a “sanctions dialogue” with senior EU officials.

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