US imposes sanctions on hundreds of targets in fresh Russia action

© Reuters. FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the U.S. Treasury building in Washington, U.S., January 20, 2023.  REUTERS/Kevin Lamarque

By Daphne Psaledakis and Simon Lewis

WASHINGTON (Reuters) -The United States on Friday announced sanctions on more than 300 targets as Group of Seven leaders met in Japan, aiming to punish Russia for its invasion of Ukraine and intensifying one of the harshest sanctions efforts ever implemented.

The move, which targets Russia's sanctions evasion, future energy revenues and military-industrial supply chains, marks the latest sanctions and export controls targeting Moscow, which have already hit thousands of targets and imposed steep curbs on Russia.

"Today’s actions will further tighten the vise on (Russian President Vladimir) Putin’s ability to wage his barbaric invasion and will advance our global efforts to cut off Russian attempts to evade sanctions," U.S. Treasury Department Secretary Janet Yellen said in a statement.

Russia's foreign ministry said former U.S. President Barack Obama was among 500 Americans citizens who would be banned in response to the latest round of U.S. sanctions.

The ministry also said Russia had refused the latest U.S. request for consular access to detained reporter Evan Gershkovich, who faces spying charges.

The U.S. and Europe imposed financial penalties on Russia immediately following the start of the war last year and have steadily ratcheted up the pressure since then, targeting Putin and officials close to him, the financial sector and oligarchs.

Experts say Washington could still impose tougher penalties, however - while the sanctions have clearly damaged Russia's economy, they have so far failed to stop Putin from pursuing a war that has killed tens of thousands and turned cities to rubble.

U.S. Secretary of State Antony Blinken said Friday's action targeted an international network that procures components for the Russia-based entity responsible for the manufacture of the Orlan drone, which Russian forces and their proxies are using in Ukraine.

An investigation by Reuters and iStories, a Russian media outlet, in collaboration with the Royal United Services Institute, a defense think tank in London, last year uncovered a logistical trail that spans the globe and ends at the Orlan's production line, the Special Technology Centre in St. Petersburg, Russia.

The investigation found that among the most important suppliers to Russia's drone program has been a Hong Kong-based exporter, Asia Pacific Links Ltd, which was targeted by Washington on Friday, as was import company SMT iLogic.

HUNDREDS OF TARGETS

The Treasury Department said it imposed sanctions on 22 people and 104 entities with touchpoints in over 20 countries or jurisdictions, including companies that import, ship or manufacture electronics components, semiconductors and microelectronics to Russia.

As part of its crackdown in recent months on Russia's evasion of sanctions, the Treasury Department designated people and entities in Switzerland, Germany and Liechtenstein on Friday.

Among the targets on Friday were Russian intelligence services procurement networks and agents, including in Liechtenstein and the Netherlands. The Foreign Intelligence Service of the Russian Federation was also hit with sanctions.

    Washington has previously warned that the Kremlin has tasked its intelligence services with finding ways to circumvent sanctions to replace equipment lost on the battlefield.

The Treasury Department said it was also imposing sanctions on Russia’s energy educational and research institutions in a bid to “limit Russia’s future extractive capabilities” by targeting the training grounds for Russia’s future energy specialists, and sites where new extraction technologies are developed. 

Additionally, the Treasury implemented a requirement for Americans to report any property in their possession or control in which Russia's Central Bank, National Wealth Fund or Ministry of Finance has an interest.

The State Department also designated or blocked property of almost 200 individuals, entities, vessels and aircraft and imposed sanctions on Polyus and the Russian business of its peer, Polymetal - the largest gold producers in Russia. Polymetal declined to comment. Polyus did not reply to a request for comment.

Subsidiaries of Russia's state-owned nuclear energy company Rosatom were also targeted. Washington has not imposed sanctions on Rosatom itself.

The State Department also designated two Iranian shipping companies, a port operator and a maritime service provider it said were part of deepening ties between Russia and Iran.

U.S. sanctions authorities were also expanded to more sectors of the Russian economy, including architecture, manufacturing and construction, the Treasury said.

The Biden administration also halted the export of wide range of consumer goods to Russia on Friday and added 71 companies to a Commerce Department's list that bars suppliers from selling them U.S. technology without a hard-to-obtain license.

Dan Fried, a former State Department coordinator for sanctions policy who is now at the Atlantic Council think tank, said Friday's action was a broad and impactful sanctions package, but that further action to escalate could still be taken, including further sanctions on banks and a reduction of the oil price cap.

"At first glance, this is a solid list, not a dramatic escalation," Fried said.