U.S. sanctions Putin’s daughters and more Russian banks

St. Basil’s Cathedral and towers of Kremlin are silhouetted against the sunset in Moscow, Russia August 12, 2021. REUTERS/Evgenia Novozhenina/File Photo

WASHINGTON, April 6 (Reuters) – The United States targeted Russian banks and elites with a new round of sanctions on Wednesday, including banning Americans from investing in Russia, in response to what President Joe Biden condemned as Russian “atrocities” in Ukraine.

The new sanctions hit Russia’s Sberbank (SBER.MM), which holds one-third of Russia’s total banking assets, and Alfabank, the country’s fourth largest financial institution, U.S. officials said. But energy transactions were exempted from the latest measures, they said.

The United States is also sanctioning Russian President Vladimir Putin’s two adult daughters, Russian Foreign Minister Sergei Lavrov’s wife and daughter, and senior members of Russia’s security council, the officials said.

“I made clear that Russia would pay a severe and immediate price for its atrocities in Bucha,” Biden said in a message on Twitter, referring to the town retaken from Russian forces where civilians were found shot at close range.

“Today, along with our Allies and partners, we’re announcing a new round of devastating sanctions,” Biden said.

Russia, which says it launched a “special military operation” in Ukraine on Feb. 24, denies targeting civilians and said images of the deaths were a “monstrous forgery” staged by the West.

Wednesday’s “full blocking sanctions” will freeze the two major banks’ assets “touching the U.S financial system,” the White House said in a statement.

Britain also froze Sberbank’s assets, and said it would ban imports of Russian coal by the end of this year in the latest installment of sanctions coordinated with the United States and other Western allies to “starve Putin’s war machine.”

Sberbank and Alfabank said the new sanctions would not have a significant impact on their operations. read more

The White House also said Biden was signing an executive order to prohibit “new investment in Russia by U.S. persons wherever located, which will further isolate Russia from the global economy.” This will include a ban on venture capital and mergers, officials said.

‘SOVIET-STYLE LIVING STANDARDS’

By cutting off Russia’s largest banks, the United States is “dramatically escalating” the financial shock on Russia, a senior administration official told reporters.

“The reality is the country is descending into economic and financial and technological isolation,” the official said. “And at this rate, it will go back to Soviet-style living standards from the 1980s.”

White House Economic Council Director Brian Deese said that, according to estimates, the Russian economy will contract by 10% to 15% in 2022 and that inflation in Russia is running at 200%.

Daniel Fried, a former State Department coordinator for sanctions policy in the Obama administration, said the latest package “basically makes Sberbank untouchable.” But he added: “What is missing is what are we going to do on oil and gas,” Russia’s most lucrative exports.

In the latest in a series of law enforcement actions against Russia, the U.S. Justice Department on Wednesday charged Russian oligarch Konstantin Malofeyev with violating sanctions imposed on Moscow after its invasion of Ukraine, saying he provided financing for Russians promoting separatism in Crimea.

Attorney General Merrick Garland said authorities had also disrupted a type of global malicious computer network known as a “botnet” controlled by a Russian military intelligence agency.

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In addition, Garland announced the department is cooperating with prosecutors in Europe to start collecting evidence of possible war crimes committed by Russia in Ukraine.

Seeking to further ratchet up pressure on Putin, the United States is also imposing full blocking sanctions on what the White House called “critical major Russian state-owned enterprises,” which it said would damage the Kremlin’s ability to fund its war effort.

Those entities included United Aircraft and United Shipbuilding, Deese said.

Among those sanctioned on Wednesday were Dmitry Medvedev, a former Russian president and former prime minister and one of Putin’s closest allies. Others included Russian Prime Minister Mikhail Mishustin and Justice Minister Konstantin Chuychenko.

Medvedev said earlier on Wednesday, in a post on the Telegram social media network, that Moscow will fight attempts to seize Russian property abroad in courts around the world.

The U.S. government took action amid mounting accusations of war crimes by Russia in Ukraine.

Grim images emerging from Bucha include a mass grave and bodies of people shot at close range, prompting calls for tougher action against Moscow and an international investigation. read more

U.S. Secretary of State Antony Blinken on Tuesday said the killings were part of a deliberate Russian campaign to commit atrocities.

Neither Blinken nor Russia provided evidence to support the assertions.

A senior French official said the European Union would also likely impose new sanctions on Wednesday.

Reporting by Matt Spetalnick, Alex Alper, Nandita Bose; additional reporting by Sarah N. Lynch and David Shepardson; editing by Heather Timmons, Howard Goller, Mark Porter and Jonathan Oatis

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