The US Treasury is expected to roll out a big expansion of its secondary sanctions programme on Russia this week, treating any foreign financial institution transacting with a sanctioned Russian entity as though it is working directly with the Kremlin’s military-industrial base.
The measure will widen a White House executive order that in December gave the Treasury the authority to apply secondary sanctions on foreign financial institutions if they were found to have acted for, or on behalf of, any of about 1,200 entities deemed by the US government to be part of Russia’s defence sector.
After this week’s change, that number will rise to more than 4,500 and will encompass almost all Russian entities that have already been sanctioned, even if this was for reasons other than direct support of the war in Ukraine. They include banks such as Sberbank and VTB, the country’s largest lenders.