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Biden admin threatens harsh sanctions on Russia if invasion of Ukraine commences

'If Russia invades Ukraine, it will become a pariah to the international community. It will become isolated from global financial markets,' said a White House official in a Friday briefing.

Biden admin threatens harsh sanctions on Russia if invasion of Ukraine commences
AP Photo/Alex Brandon
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The White House says that Russia will be denied access to the global financial markets if the situation in Ukraine escalates.

“If Russia invades Ukraine, it will become a pariah to the international community. It will become isolated from global financial markets,” said a White House official in a Friday briefing.

The threat from the Biden administration is designed to tighten the noose around the Russian economy in retaliation to its perceived advances on its neighbor.

The United States already has sanctions against 180 individuals following Russia’s annexation of Crimea in 2014. The new round of sanctions, if imposed, could include Russian billionaires and businesses with extensive global ties throughout Europe and the rest of the world.  

“One option is to go after the people who are aiding and abetting the oligarchs already sanctioned,” said Julia Friedlander of the Atlantic Council, who served in the U.S. Treasury coordinating sanctions policy and combating illicit finance, per CNBC. “The other option is to go after the biggies.”

The threat of economic sanctions comes amid outbreaks of violence in the Donetsk People’s Republic breakaway province of Ukraine, which has engaged in an ongoing conflict against Ukraine since 2014.

As American officials push for a diplomatic solution, the State Department insists that Russia continues to build up its military presence despite claims that it has withdrawn some of its forces. The U.S. is calling for more substantive evidence of a withdrawal.

The potential sanctions by the U.S. government against Russia are part of a “range of scenarios” and contingencies should Russia commit military action against Ukraine.

Reuters reported: 

For all the talk of a "massive" EU sanctions package, European diplomats say Russia's closest friends in the bloc - Hungary, Italy, and Austria - have an understanding that these will only be imposed if there is a Russian military attack.

The hyperfocus on a physical invasion has taken some of the attention off other irregular warfare threats, but it also reflects differences among the allies on how to respond to non-military actions, one U.S. official said.

Sweden has suggested a discussion about a course of action if Putin never attacks and reduces troop levels slightly, but sits on the border with Ukraine, massively pressuring the Ukrainian economy and firing off the occasional cyberattack. 

The rest of the bloc is not keen to delve into this scenario, because it threatens to open up EU divisions and break the united front, several officials said.

In a separate report on February 11, U.S. and European officials said that sanctions against Russia would target major Russian banks, but would not ban Russia from the SWIFT financial system.  

Despite threats to deny Russia access to global financial markets, the chair of the Financial Stability Board, one of the world’s most powerful financial watchdogs, warned the west to “think twice” about cutting the country off.

“When applying severe measures, one should always think twice and also be aware of the consequences,” said Financial Stability Board chairman Klaas Knot, who is also head of the Dutch central bank. 

Knot made his remarks to the Financial Times ahead of the G20 finance meetings in Jakarta, where he said that the “ultimate decision” of what sanctions would look like would be “taken on different grounds” than the risk to the global financial system.

“But it is clear that they might have some financial ramifications and I would urge policymakers to take those into account,” he said.

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