Russia faces new round of US sanctions as Biden denounces ‘major war crimes’

WASHINGTON, April 6 (Reuters) – The United States on Wednesday imposed a new round of sanctions on Russia’s banks and elites, including banning Americans from investing in Russia in response to Russian forces’ condemnation of “major war crimes” by Russian forces. In Ukraine.

New sanctions hit Russia’s Sberbank (SBER.MM)U.S. officials say it owns one-third of Russia’s total bank assets and the country’s fourth-largest financial institution, Alfabank. But they said energy transactions have been exempted from recent measures.

Authorities say the United States has approved the two adult daughters of Russian President Vladimir Putin, the wife and daughter of Russian Foreign Minister Sergei Lavrov, and senior members of the Russian Security Council.

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“Nothing less than a major war crime has happened,” Biden told labor leaders, referring to the Ukrainian city of Pucha, which was recaptured by Russian forces, where the bodies of civilians shot dead were found.

“The responsible nations must work together to bring these criminals to justice,” he said. “And together with our allies and our allies, we are going to raise economic costs and increase the pain for Putin.”

The gruesome images emanating from Pucha include a mass grave and the bodies of people shot at close range, some of whom are being held captive, calling for drastic action against Moscow and an international investigation. read more

Russia, which claims to have launched a “special military operation” in Ukraine on February 24, has refused to target civilians and said the images of the deaths were “outrageous fakes” staged by the West.

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The White House on Wednesday said “full sanctions” would freeze the assets of Sberbank and Alfabank, “touching the US financial system”.

Britain has frozen Sberbank’s assets and said it would ban Russian coal imports by the end of this year as part of a joint effort to “starve Putin’s war machine.”

Sberbank and Alfabank have stated that the new sanctions will not have a significant impact on their operations. read more

Also on the list is Dmitry Medvedev, Russia’s former president, former prime minister and Putin’s close ally. Others include Russian Prime Minister Mikhail Michustin and Justice Minister Konstantin Chuchenko.

Later on Wednesday, Biden signed an executive order banning “an American person in the Russian Federation, new investments anywhere.” This includes a ban on venture capital and connections, officials said.

Despite the imposition of new sanctions, Ukrainian President Volodymyr Zhelensky has criticized some in the West and said “no uncertainty” can be tolerated.

“The only thing we do not have is the policy attitude of some leaders – political leaders, business leaders – who still think war and war crimes are not as terrible as financial losses,” he told Irish lawmakers. read more

Sources said EU diplomats on Wednesday failed to approve new sanctions as technical issues remain to be resolved, including whether the embargo on coal will affect existing agreements.

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‘Soviet-style living standards’

Washington has targeted Putin’s daughters because many of his assets are “hidden with family members,” a senior Biden administration official said.

Putin’s daughter, Katrina Vladimirovna Dikonova, is a technical executive who supports the Russian government and its defense ministry, according to figures released by the U.S. Treasury Department.

His other daughter, Maria Vladimirovna Vorontsova, is “leading billions of dollars in government-funded programs for genetic research from the Kremlin, and is personally overseen by Putin,” the Treasury said.

A senior executive told reporters that by cutting off Russia’s largest banks, the United States was “dramatically increasing” the financial shock on Russia.

“The truth is, the country is descending into economic and financial and technological isolation,” the official said. “At this rate, it’s going back to the Soviet – style standard of living from the 1980s.”

Brian Dees, director of the White House Economic Council, said that according to estimates, the Russian economy will shrink by 10% to 15% by 2022 and inflation in Russia by 200%.

Daniel Fried, the former State Department coordinator for sanctions in the Obama administration, said the latest package “basically makes Sberbank untouchable.” But he added: “What is missing is what we’re going to do with oil and gas,” which is Russia’s most lucrative export.

Under recent sanctions, special US Treasury licenses exempted Russian oil and gas from transactions with target banks related to the purchase of European allies.

U.S. Treasury Secretary Janet Yellen has called for flexibility in Russia’s energy transactions because many European countries are heavily dependent on Russia’s oil and gas, and are determined to “quickly move away from that.”

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In a recent series of law enforcement actions against Russia, the U.S. Justice Department on Wednesday accused the Russian oligarch Konstantin Malofeev of violating sanctions imposed on Moscow after the invasion of Ukraine, and of financing Russians promoting separatism in the Crimea. read more

Attorney General Merrick Garland announced that the department was cooperating with prosecutors in Europe to gather evidence of possible Russian war crimes.

As the United States seeks to increase pressure on Putin, the White House is imposing full sanctions on what it calls “important Russian state-owned enterprises.” Those companies include United Aircraft and United Shipping, Tees of the White House said.

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Report by Matt Spetalnick, Alex Alper, Nandita Bose; Sarah n. Additional report by Lynch, Toina Siaku, David Shepherdson and David Lauder; Editing by Heather Timmons, Howard Coller and Jonathan Odyssey

Our standards: Thomson Reuters Trust Principles.

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