The United States has announced that it will sanction foreign banks that support Russia’s war against Ukraine in a new bid to exert economic pressure on Moscow.

Under an executive order to be signed on Friday, December 22, 2023, by President Joe Biden, the United States would be authorized to issue so-called secondary sanctions against financial institutions that support Russia’s defense industry.

According to a senior official who spoke on condition of anonymity, the United States was sending a message to financial institutions that they have “a very stark choice.”

“Ultimately, for almost any bank in the world, you give them the choice between continuing to sell a modest amount of goods to Russia’s military-industrial complex or being connected to the US financial system – they’re going to choose being connected to the US financial system, given that our economy is far bigger, and our currency is the one used around the world.”
U.S Official

Russia has been seeking to reduce reliance on dollars, euros and yen since its invasion of Ukraine triggered a wave of Western sanctions.

China’s largest banks have extended billions of dollars worth of credit in renminbi to Russia since the war as Western institutions exit.

The US official voiced hope that European and US banks, while not directly invested in Russia, would pressure partners operating in the country.

Russia To Respond To Any Western Seizure Of Its Assets

Also on Friday, the Kremlin hit back at claim that $300bn in seized Russian assets could be handed to Ukraine.

Russia will never leave in peace any country that seizes its assets, the Kremlin declared, saying that it would look at what western assets it could seize in retaliation in such a scenario.

Kremlin spokesman, Dmitry Peskov told a briefing that any such seizure would deal a serious blow to the international financial system and that Russia would defend its rights in the courts and through other means if it happened.

Meanwhile, Russian Deputy Foreign Minister, Sergei Ryabkov, was quoted as saying that Russia may sever diplomatic ties with the U.S if it confiscates Russian assets frozen over the Ukrainian conflict.

The U.S “must not act under an illusion … that Russia is clinging with both hands to diplomatic relations with that country,” Ryabkov said.

Additionally, Ryabkov said that Russia is ready to swiftly respond in kind to Washington deploying short- and medium-range missiles in Europe and the Asia-Pacific region.

Ryabkov stated that Moscow was closely tracking US missile development and potential deployments and was ready to swiftly take the necessary political decisions to respond in kind.

He was also reported as saying that Moscow and Washington remained in contact over a potential prisoner swap between the two countries.

“The issue of exchanges of citizens serving prison terms in Russia and the United States is extremely delicate. Decisions in this area are often hampered by being actively discussed in public.”
Sergei Ryabkov

He said that contacts about possible exchanges were conducted by the intelligence services of both countries.

“It is interesting that the participants in these contacts on the American side insist on their complete confidentiality,” he noted.

He added, “We also adhere to this line, but then certain twists occur when the White House regularly arranges ‘leaks’ and begins to discuss sensitive issues in the public space.”

Paul Whelan, a former US marine serving a 16-year sentence in Russia for spying, and US reporter Evan Gershkovich is awaiting trial in Moscow on espionage charges.

The U.S and Russia have agreed high-profile prisoner swaps in the past. The most recent being in December 2022 when Moscow exchanged Brittney Griner, a U.S basketball star convicted of a drugs offence in Russia, for Russian arms trafficker Viktor Bout.