The United States hit Russia with a new round of sanctions on Thursday, targeting more than 300 members of its parliament and dozens of defense companies, as it moved to restrict Russia’s ability to use gold reserves to prop up its currency.
The actions, which arrived along with new western allies sanctions, were the latest attempt to inflict economic damage on President Vladimir V. Putin of Russia for his invasion of Ukraine. In addition to imposing new sanctions, the US took steps to restrict Russia’s ability to evade existing restrictions on its central bank and major financial institutions. There were concerns that Russia was finding ways to stabilize the ruble and rebuild its foreign exchange reserves.
“The United States, with our partners and allies, is striking at the heart of Russia’s ability to finance and carry out its war and atrocities against Ukraine,” Treasury Secretary Janet L. Yellen said in a statement.
The sanctions were announced as President Biden met with world leaders at summits in Brussels focused on the war in Ukraine.
Senior Biden administration officials said Thursday that the sanctions had had a severe impact on Russia’s economy, citing forecasts that project the Russian economy will contract by 15 percent this year, ending 15 years of gains. They also pointed to estimates that more than 200,000 people had left Russia in the past month, accelerating a “brain drain.”
The new sanctions target 328 members of the State Duma, the lower house of Russia’s Federal Assembly. They also include Russian defense companies such as Tactical Missiles Corporation JSC, which makes weapons systems.
As part of the effort to put financial pressure on Putin’s allies, the US said it was sanctioning Herman Gref, chairman and chairman of Sberbank, one of Russia’s largest banks. The United States sanctions imposed at Sberbank last month.
The Treasury Department points to alternative assets that Russia could use to support its economy. On Thursday it issued new guidance to make it clear that transactions involving Russia’s $130bn gold reserves were also subject to US sanctions. Russia has built up its war chest of gold in recent years to help mitigate the impact of sanctions by allowing its central bank to use the precious metal to buy foreign currency or guarantee loans.
The United States is working to close that loophole by threatening sanctions on anyone who facilitates such transactions. the Treasury Department guidance included anyone “determined to be responsible for or complicit in, or to have participated or attempted to participate directly or indirectly in” sanctions evasion, including through assets such as gold.
Biden administration officials said they had seen reports suggesting that Russia was trying to use its gold reserves to prop up the ruble, and that the United States and its allies were shutting down Russia’s ability to use gold to circumvent sanctions.
The Russo-Ukrainian War and the Global Economy
The warning came a day after Ms. Yellen spoke to a bipartisan group of senators about proposed legislation to impose sanctions on Russian gold. They said that Russia was laundering money through gold by buying and selling it for high value currency.
The senators Ms. Yellen had met with: Senator Angus King, Independent from Maine; Senator John Cornyn, Republican from Texas; Senator Bill Hagerty, R-Tennessee; and Sen. Maggie Hassan, a Democrat from New Hampshire, praised the Treasury measure Thursday.
“To limit the effects of Russia’s billions of gold assets, we must keep up the pressure and close any possible loopholes that Putin and his cronies use to help finance their inconceivable war,” they said in a joint statement. “It is important that the Treasury Department has heeded our calls and taken steps to help prevent Russia from selling its gold.”