U.S. threatens to punish third parties who help Moscow evade sanctions

U.S. threatens to punish third parties who help Moscow evade sanctions

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The U.S. is threatening to impose sanctions on individuals and companies outside Russia that help it circumvent penalties imposed by the West for the war in Ukraine, which would significantly escalate its efforts to financially isolate Moscow.

US National Security Adviser Jack Sullivan said Washington was ready to expand its economic and financial penalties globally to include “secondary” sanctions. President Joe Biden spoke to reporters on Air Force One on Friday as he traveled from Belgium to Poland.

“We have many tools to ensure compliance, one of which is to designate individuals or entities in third-party jurisdictions that are not complying with U.S. sanctions or are taking systematic efforts to weaken or circumvent them,” Sullivan said.

“We are prepared to use them if necessary,” he added.

Sullivan’s comments come as the United States and its allies increasingly worry that Russia will try to circumvent financial isolation The West propped up their economy and the ruble imposed by finding alternative sources of foreign exchange and business transactions.

Imposing secondary sanctions would cripple any such efforts, but could increase negative spillovers to the global economy, forcing companies and investors around the world to choose between doing business with the West or Russia.

Sullivan’s threat to impose such sanctions comes amid a heated debate between the United States and its European allies over how to handle China’s position in the Ukraine war.There are concerns that Beijing may aid russia Military and economic, including as a backdoor to evade sanctions.

The United States has warned Beijing that it will face “consequences” if it helps Russia, but it has not specified what steps it will take. U.S. and European leaders have been trying to coordinate their approach to Beijing ahead of the EU-China summit in early April.

In an interview with CNBC on Friday, U.S. Treasury Secretary Janet Yellen said it was too early to impose sanctions on China. “I don’t think it is necessary or appropriate at this point. As senior government officials, we are having private and quiet conversations with China to make sure they understand our position,” she added.

“We would be very concerned if they supply Russia with weapons or try to evade the sanctions we have imposed on the Russian financial system and the central bank. We are not seeing that happening at the moment.”

Next week, U.S. Treasury Undersecretary Wally Adejemo will travel to European countries including Britain, Belgium, France and Germany to coordinate sanctions policy over the Ukraine war. European countries have historically resisted secondary sanctions imposed by the United States, especially those imposed by the United States on Iran.

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