This is a measure that was announced by President Joe Biden last month, but which had to be validated by the elected officials of the American House and Senate. The United States officially revoked the commercial status of Russia and Belarus on Thursday (April 7) in response to the war in Ukraine, in order to “to further isolate Russia on the world stage”.
By depriving Russia of its “most favored nation clause”, a basic principle of reciprocity in free trade, the West would de facto cut it off from the global game of free trade, and would give themselves the right to heavily tax imports of Russian products.
As far as the United States is concerned, only two other countries are currently excluded from this principle of reciprocity, which is the basis of most international trade relations: Cuba and North Korea. The congressional bill also requires the United States to call for Russia’s suspension from the World Trade Organization.
Congress has also voted for a ban on the import of Russian energy, following in the footsteps of the American president who announced an embargo on these materials at the beginning of March by decree.
Last year, the United States imported some $30 billion worth of Russian products – including $17.5 billion worth of crude oil, a commodity on which Washington has just imposed an outright embargo.
15 years of economic progress erased by sanctions
Also yesterday, the US Treasury announced that it had sanctioned two new Russian state-controlled companies. The first is Alrosa, a mining giant which alone accounts for 90% of the diamonds mined in Russia and 28% of the world market. The group had previously been targeted by sanctions, but the US government is extending them.
The second is the United Shipbuilding Corporation (USC), Russia’s leading shipbuilder and “responsible for the construction of almost all” of the country’s warships, according to the statement from the US Treasury Department.
All this is in addition to several salvoes of Western measures adopted in recent weeks, intended to gradually cut economic and financial ties with the rest of the world of the country led by Vladimir Putin. All new investments in Russia, for example, are prohibited. The US executive will also impose the most severe constraints on the essential public bank Sberbank and the largest private bank in the country, Alfa Bank. These institutions, already targeted by less severe sanctions, will undergo a freezing of all their assets “in contact with the American financial system”, and will be banned from any transactions with American actors, according to the White House.
“Our sanctions will certainly erase fifteen years of economic progress in Russia” and “we will stifle (its) ability to grow for years”, said Joe Biden, Wednesday, April 6.
According to Washington, Russia could see its economy collapse by some 15% this year.
Putin’s daughters targeted
Washington will also sanction the two daughters of the Russian president, identified by the US Treasury as Maria Vorontsova and Katerina Tikhonova. Their assets in the United States will be frozen and their links with the American financial system severed. “We believe a lot of Putin’s assets are hidden through his family members, and that’s why we’re targeting them,” said a senior US official.
The same treatment will be applied to Foreign Minister Sergey Lavrov’s wife and daughter, Maria Lavrova and Yekaterina Vinokurova, as well as to members of the Russian Security Council, including former President and Prime Minister Dmitry Medvedev. .
The United States also announced this week the indictment of billionaire Konstantin Malofeev for violating US sanctions imposed after Russia invaded Ukraine. The oligarch, considered one of the main sources of funding for pro-Russian separatists in eastern Ukraine, is accused of having “attempted to evade sanctions by using accomplices to secretly acquire and run media outlets across Europe”.