US President Joe Biden on Friday signed an executive order clearing the way for Washington to impose sanctions on financial institutions that help Russia evade sanctions, the White House said in a statement.
The order, part of a broader U.S. crackdown on sanctions evasion, also gives Washington the opportunity to expand import bans on some Russian goods such as seafood and diamonds, the White House said.
The new order gives Washington and its allies new tools to combat networks that Moscow has tried to create to circumvent those sanctions through the use of front companies and “witting and unwitting financial intermediaries,” one senior official said.
“We have imposed sanctions on a number of companies that we have identified, but ultimately the bottleneck for these companies and Russia's ability to continue to try to circumvent our sanctions is the financial system,” the official said.
“This tool allows us to target these institutions and give them very tough choices.”
The provisions take effect immediately.
Officials said they were unaware of any U.S. or European institutions that had violated the order, noting that most U.S. and European firms had already abruptly curtailed their business with Russia.
Brian O'Toole, a former Treasury Department official now at the Atlantic Council think tank, said the order would allow the Biden administration to use secondary sanctions more subtly.
"This ... should make it easier to communicate and sanction Russia's sanctions evasion efforts, as well as provide a deterrent effect for those considering doing business that may be related to the Russian military," O'Toole said.
“It’s like Iran-style sanctions,” he said.
The order will also give Washington the ability to ban products made in Russia but processed outside the country, including diamonds and seafood, the White House said.
The action comes after G7 countries earlier this month announced an outright ban on Russian diamonds starting January 1, followed by phased restrictions on indirect imports of Russian gems from around March 1.
