US, allies to ban investments in Russia, sanction banks

Communal workers carry body bags in the town of Bucha, not far from the Ukrainian capital of Kyiv. PHOTO: AFP

WASHINGTON (REUTERS) - The United States and its allies will on Wednesday impose new sanctions on Russian banks and officials and ban investment in Russia, a source familiar with the announcement said, after officials in Washington and Kyiv accused Moscow of committing war crimes in the Ukrainian town of Bucha.

The sanctions will increase curbs on financial institutions and state-owned enterprises in Russia and target Russian government officials and their families, the source told Reuters on Tuesday (April 5).

"Tomorrow, the US will announce, in coordination with the G-7 and EU, an additional sweeping package of sanctions measures that will impose significant costs on Russia and send it further down the road of economic, financial and technological isolation," the source said.

The measures will "degrade key instruments of Russian state power, impose acute and immediate economic harm on Russia, and hold accountable the Russian kleptocracy that funds and supports (Russian President Vladimir) Putin's war," the source said.

A senior French official said the European Union would also likely impose new sanctions on Wednesday. The Wall Street Journal reported Sberbank may be among the banks targeted.

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.

US Secretary of State Antony Blinken said on Tuesday the killings were no random act of a rogue unit but part of a deliberate Russian campaign to commit atrocities. He offered no evidence to support his assertion of a deliberate campaign.

Russia, which says it launched a "special military operation" in Ukraine on Feb 24 to demilitarise and "denazify" its neighbour, denies targeting civilians and said the deaths were a "monstrous forgery" staged by the West to discredit it.

Ukraine, a parliamentary democracy, says it was invaded without provocation. Because of the war and Western sanctions, experts forecast a contraction of the Russian economy of as much as 15 per cent.

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