The US Treasury Department has announced new sanctions on Gazprombank, one of Russia’s largest banks.
The measures effectively kick Gazprombank, which is partially owned by Kremlin-owned gas company Gazprom, out of the US banking system, banning its trade with US citizens and freezing its assets.
The Treasury also imposed sanctions on 50 small-to-medium Russian banks to curtail the country’s connections to the international financial system and prevent it from abusing it to pay for technology and equipment needed for the war.
It warned foreign financial institutions that maintaining correspondent relationships with the targeted banks “entails significant sanctions risk.”
The 50 banks were sanctioned along with about 15 officials.
Along with the sanctions, the Treasury also issued two new general licences authorising US entities to wind down transactions involving Gazprombank, among other financial institutions, and to take steps to divest from debt or equity issued by Gazprombank.
The sanctions were imposed under an executive order from US President Joe Biden.
It was not immediately clear whether President-elect Donald Trump could remove them after taking office in January if he decided to take a different stance on Russia.
Trump’s return to the White House in January and his pledge to end the war in short order has created a new sense of urgency among Western allies to strengthen Ukraine’s hand ahead of any talks.
After the Russian invasion of Ukraine in 2022, the US Treasury placed debt and equity restrictions on 13 Russian firms, including Gazprombank, Sberbank and the Russian Agricultural Bank.
It has also worked to provide Ukraine with funds from windfall proceeds of frozen Russian assets.
Gazprombank is accused of helping Russia to pay for military equipment and materiel for the war in Ukraine.
It has also allegedly paid the salaries of Russian soldiers, including combat bonuses, and helped to compensate families of Russian soldiers who have been killed in the fighting.
Several other countries, including Australia, Canada, New Zealand and the United Kingdom, have previously sanctioned Gazprombank.
U.S Seeks To Diminish Russia’s War Machine
U.S Treasury Secretary, Janet Yellen said in a statement that the sanctions targeting Russia’s largest remaining non-designated bank, as well as dozens of other financial institutions and officials in Russia, will “further diminish and degrade Russia’s war machine.”
“This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military.
“We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine.”
Janet Yellen
The US had held off sanctioning Gazprombank to make it possible for countries in Europe to pay for Russian gas.
However, the need for that exception waned as European nations reduced their dependence on Russian supplies.
Gazprombank has been handling payments for gas from remaining European customers of Gazprom PJSC since 2022.
Putin then forced the gas buyers to switch to rubles and open special ruble and foreign-currency accounts at Gazprombank, which was authorized to handle payments for the fuel. Some buyers refused and were cut off from supply, others obliged.
It’s not immediately clear if the sanctions could prevent payments for gas by the customers still receiving the fuel from Moscow.
In reaction to the announced sanctions, the Economy Ministry of Slovakia, whose state-owned gas buyer SPP has a long-term contract with Gazprom and continues to buy Russian gas, said that it was analysing the US move and will know its potential impact on the country soon.
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