Biden tightened restrictions on foreign financial institutions that help Russia circumvent sanctions

Oleksandra Opanasenko

US President Joe Biden signed a decree on economic measures against foreign financial institutions found to be involved in the supply of sanctioned military goods to Russia.

This is stated on the website of the White House.

"Foreign financial institutions" refers to any institutions that provide financial services, from banks to pension funds or payment system operators, as well as their subsidiaries.

Now the US Treasury Secretary, after consulting with the Secretary of State and, if necessary, the Secretary of Commerce, can impose sanctions on a foreign financial institution if it has facilitated deals between Russia and third countries. These are agreements in the field of defense, technology, construction, as well as aerospace and manufacturing industries.

Another reason for imposing sanctions is the provision of "any service related to Russiaʼs military-industrial base, including the sale, supply or transfer of any product or class of products."

Sanctions can be imposed without warning, as otherwise there is a risk of concealment of assets subject to restrictions. They include banning the opening of accounts in the United States or limiting their use, as well as blocking assets.

Western financial institutions have largely stopped doing business with Russia. But Biden administration officials expect the threat of new sanctions to prompt American and European financial companies to put pressure on banks in other countries to avoid Russian smuggling schemes.