After Russian President Vladimir Putin recognized the breakaway regions of Donetsk and Lugansk, in eastern Ukraine, as independent territories during his speech on Monday (21), Western countries coordinated new sanctions against Moscow.
According to a report by Reuters, the government of Joe Biden, in the United States, prepared a measure to sever relations between large Russian and American banks that allow international payments.
It should also place Russian companies on the “Specially Designated Nationality” (SDN) list, allowing them to be expelled from the US banking system, freezing their assets and banning trade with Americans. For now, some smaller state-owned Russian banks are subject to these sanctions.
According to the source consulted by the report, it is unclear whether Russian banks will also be added to the SDN list, but both sanctions will have consequences for the country, making dollar transactions difficult.
In addition, a bill introduced by Senate Democrats in January calls for sweeping sanctions against senior Russian government and military officials, including Putin. At the time, Biden said he would be ready to consider personal sanctions against the Russian president. Moscow responded to the threat by saying that Putin would not be harmed by such measures, but they would be “politically destructive”.
Members of the European Union are also considering adopting sanctions. In Germany, Chancellor Olav Scholz interrupted the Nord Stream 2 pipeline certification process. The construction is considered one of Russia’s main “bargains” in Europe, given the growing dependence of Germany and other neighboring countries on Russian gas. .
“We must reassess the situation, in particular in relation to Nord Stream 2,” Scholz told a news conference. The pipeline, built to transport gas from Russia to Germany across the Baltic Sea, has been completed but has yet to gain regulatory approval.
The chancellor claimed to have asked the Ministry of Economy to take steps to ensure that certification does not take place, for the time being. “The appropriate departments of the Ministry of Economy will reassess the security of our supply in light of what has changed in recent days,” Scholz said.
Last week, Britain threatened to block Russian companies from raising capital in London, Europe’s financial hub for such transactions. On Tuesday, the country imposed sanctions on five Russian banks and three men, including Gennady Timchenko, who have close ties to Putin.
British Prime Minister Boris Johnson has declared that Russia is on its way to achieving “pariah status” and that the world must prepare for the next stage of Putin’s plan which, according to the premier, includes a full-scale invasion of Ukraine prepared by the Kremlin.
One of the toughest measures being considered by Western allies would be to disconnect the Russian financial system from SWIFT, which handles international transfers and is used by more than 11,000 financial institutions in more than 200 countries.
In 2012, SWIFT disconnected Iran’s banks as international sanctions on the country intensified over its nuclear program. Iran has lost half of its oil export earnings and 30% of its foreign trade, according to the Carnegie Moscow Center think tank. Requests to cut off Russia’s SWIFT access were debated in 2014, when Moscow annexed Crimea, prompting Moscow to develop an alternative messaging system, SPFS.
Finally, Japan also stated that it is ready to join the G7 nations in enforcing sanctions on Russia. The recognition of the separatists was called by Prime Minister Fumio Kishida an “unacceptable action and a violation of international law”. Kishida’s office later reported that the leader had called Olaf Scholz in Germany to reaffirm cooperation regarding the situation in Ukraine.
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