US to start ‘waves of sanctions’ against Russia within hours

A Ukrainian serviceman is seen on the front line with Russia-backed separatists in the Lugansk region, on Feb 22, 2022. PHOTO: AFP

WASHINGTON (AFP, REUTERS) - The United States said on Tuesday (Feb 22) that Russia's move into eastern Ukraine amounts to the "beginning of an invasion" and warned that "severe" sanctions would be announced shortly.

Washington is set to announce the first of what could be multiple levels of new sanctions and export controls against Russia, with US President Joe Biden due to deliver remarks at 1800 GMT (2am, Wednesday, Singapore time), the White House said. 

Washington's stern message followed an initially more hesitant response from the White House to Russian President Vladimir Putin's recognition of two rebel-held enclaves in Ukraine as independent, along with reluctance to say that "invasion" was underway after Mr Putin ordered troops there.

For weeks, the United States and its allies have said that a full invasion of Ukraine by massing Russian forces would trigger devastating economic sanctions.

But with doubts continuing over Mr Putin's ultimate intentions, it took some 12 hours for the Biden administration to shift to a harsher tone.

"We think this is, yes, the beginning of an invasion, Russia's latest invasion into Ukraine, and you're already seeing the beginning of our response, that we said will be swift and severe," deputy national security advisor Jonathan Finer told CNN.

“For the third or fourth time, I am calling it an invasion. We are taking a severe response, including sanctions on Russia that we’ll be rolling out in a matter of hours,” he said.

Potential US sanctions 

Mr Finer said the US had envisioned multiple levels of sanctions based on Russia’s actions.

“This will be our severe sanctions and swift response to a Russian invasion,” he said, adding the US will impose additional sanctions if Russia continues to move forward.

“That has been our approach all along. We envisioned waves of sanctions that we would roll out on Russia if and as it continues to take steps down the path for toward war, which we believe that they’ are doing.” 

Reuters could not determine what sanctions or export controls might be announced, but the Biden administration has prepared an initial package that includes barring US financial institutions from processing transactions for major Russian banks, people familiar with the matter said over the weekend.

The measures aim to hurt the Russian economy by cutting the “correspondent” banking relationships between targeted Russian banks and US banks that enable international payments.

The US could also wield its most powerful sanctioning tool against certain Russian people and companies by placing them on the Specially Designated Nationals list, effectively kicking them out of the US banking system, banning them from trading with Americans and freezing their US assets, the same sources said.

The Biden administration has said it plans to spare everyday Russians from the brunt of US export controls if Russia invades Ukraine, and focus on targeting industrial sectors, a White House official said in late January.

Still, “key people” will also face “massive sanctions”, White House national security official Peter Harrell said in a speech in Massachusetts.

Export control measures could also be announced as part of the package but would probably not have the same immediate impacts, and instead “degrade Russia’s ability to have industrial production in a couple of key sectors”.

Expanding the scope of the so-called Foreign Direct Product Rule to Russia, in a way that mirrors a Trump-era move against Chinese telecoms giant Huawei Technologies, could allow the US to stop shipments of chips, computers, consumer electronics, telecommunications equipment, and other items made anywhere in the world if they were produced using US technology.

Mr Harrell did not detail which sectors, but other White House officials have mentioned aviation, maritime, robotics, artificial intelligence, quantum computing and defence.

The White House also welcomed Germany's earlier decision to halt the mammoth Nord Stream 2 pipeline project meant to deliver Russian natural gas to Europe.

President Joe Biden "made clear that if Russia invaded Ukraine, we would act with Germany to ensure Nord Stream 2 does not move forward... We will be following up with our own measures today," Press Secretary Jen Psaki tweeted.

Mr Putin sharply escalated the crisis on Monday when he announced recognition of the enclaves that Moscow supports in Ukraine - and said Russia's military would be responsible for what he called "peacekeeping".

But it was not immediately clear what the scope and timing of Russian "peacekeeping" troop movements would be and, crucially, whether Russia will now openly support the separatists in their goal to seize even more Ukrainian territory across the Donbas region.

A senior US administration official had said on Monday that Russia’s sending troops to the breakaway regions of Ukraine did not represent a further invasion because Russia had had troops there previously. 

But some of the territory recognised by Russia is on the other side of the line of control that separates the rebel regions of Ukraine from the rest of the country, British defence minister Ben Wallace suggested on Tuesday. 

Mr Putin has since received the green light from his upper house of Parliament to deploy Russian military forces to the two separatist-held regions of Donetsk and Luhansk for what lawmakers said would be a "peacekeeping" mission.

While the United States and other Western allies condemned a violation of pro-Western Ukraine's territorial integrity, Washington initially struck a cautious posture.

Mr Biden immediately imposed economic sanctions on the two enclaves, but on the question of any further sanctions against Russia itself, a US official told reporters, "We are going to assess what Russia's done."

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The official stressed that Russian forces have already been deployed covertly in the separatist areas for eight years.

"Russian troops moving into Donbas would not be a new step," the official said. "We'll continue to pursue diplomacy until the tanks roll."

Later on Monday a White House spokesperson first revealed that new sanctions would be announced, indicating that the position was hardening.

Beyond Nord Stream 2

Secretary of State Antony Blinken slammed Russia's recognition of the separatist areas as a sign Mr Putin had no interest in negotiating, saying it "directly contradicts Russia's claimed commitment to diplomacy, and is a clear attack on Ukraine's sovereignty".

Mr Putin's announcement sparked intense phone diplomacy between Washington, European capitals and Ukraine as the United States tries to maintain unity among dozens of partners over how to respond to Russia, which supplies much of the European Union's energy supplies.

After announcing a stop to the near-completed Nord Stream 2 pipeline project, German Chancellor Olaf Scholz warned Russia that "there are also other sanctions that we can introduce if further measures are taken".

Britain on Tuesday also imposed sanctions against Russia, targeting five Russian banks and three Russian billionaires with close links to Mr Putin

Foreign ministers from the Group of Seven (G-7) nations had agreed a package of escalatory sanctions in response to Russia’s actions towards Ukraine, British foreign minister Liz Truss said on Twitter.

“The G-7 Foreign Ministers strongly condemn Russia’s violation of their international commitments. We agreed a strong package of coordinated escalatory sanctions in response,” Ms Truss said following a call between the ministers.

Last Friday, the deputy US national security advisor for international economics, Mr Daleep Singh, warned that the full set of sanctions under preparation would turn Russia into an international "pariah".

Ukraine's Foreign Minister Dmytro Kuleba said his country was cautiously optimistic that its allies were finally listening to Kyiv about the need to impose sanctions on Russia and that Russia had been wrongfooted by being sanctioned sooner than expected. 

Speaking at a briefing, Mr Kuleba said he would have more talks with Mr Blinken and that separately he had contacted Britain and other countries with additional requests for weapons. 

He also said he had urged European Union member states to promise his country future membership in the bloc in response to Russia’s attempts to isolate it.

“I called on the EU to put aside all the hesitation, all the reticence and skepticism that exists in European capitals and to give Ukraine the promise of future EU membership. That time has come,” Mr Kuleba said. 

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