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    Biden Bans Oil Imports From Russia, Warning Gas Prices Will Rise

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    Officials said President Biden had struggled for days over the move amid deep concerns about accelerating the already rapid rise in the price of gasoline.WASHINGTON — President Biden on Tuesday banned imports of Russian oil, gas and coal in response to what he called President Vladimir V. Putin’s “vicious war of choice” in Ukraine, but warned Americans that the decision to inflict economic pain on Russia would inevitably mean higher gas prices at home.“Defending freedom is going to cost,” Mr. Biden said in televised remarks announcing the ban at the White House.The president’s move immediately shut off a relatively small flow of oil into the United States, but it was quickly followed by a British pledge to phase out imports of Russian oil by the end of the year and a declaration from the European Commission — the executive arm of the European Union, which is heavily dependent on Russian oil and gas — to make itself independent of that supply in the coming years.The impact of the decisions quickly rippled across the global energy market amid fears that the supply of oil would shrink. In the United States, the national average price of a gallon of regular gasoline, which had already surged in recent weeks, reached $4.173, not adjusted for inflation, a new high and an average increase of about 72 cents from only a month ago, according to AAA.“If we do not respond to Putin’s assault on global peace and stability today, the cost of freedom and to the American people will be even greater tomorrow,” Mr. Biden said.He vowed to “do everything I can to minimize Putin’s price hike here at home.”Under intense, bipartisan pressure from lawmakers to deny Russia any more oil revenue from Americans, Mr. Biden acted without the unity among allies that has characterized most of the response to Russia’s aggression during the past several months.The moves by Britain and the E.U. fell short of Mr. Biden’s ban. Franck Riester, the French minister for foreign trade, told the Franceinfo radio station on Monday that “everything’s on the table,” but that officials would need to consider “consequences” from an energy ban. In Italy, which imports more than 40 percent of its energy as Russian gas, Prime Minister Mario Draghi has said the overdependence on Russian gas is a strategic weakness for the country.Even as Mr. Biden spoke, describing his ban as “another powerful blow to Putin’s war machine,” a new wave of major corporations across the world began shutting down their operations in Russia on Tuesday.Shell, Europe’s largest oil company, said it would begin withdrawing from its involvement “in all Russian hydrocarbons,” including an immediate halt to all spot purchases of Russian crude and the shuttering of its service stations in the country. McDonald’s, Coca-Cola, Pepsico and Starbucks announced that they would temporarily close all restaurants and pause all operations in Russia in response to the invasion in Ukraine. Amazon stopped letting customers in Russia and Belarus open new cloud computing accounts.An oil refinery in Omsk, Russia. About 12 percent of the world’s oil and 17 percent of its natural gas comes from Russia, according to estimates from J.P. Morgan.Alexey Malgavko/ReutersOfficials said Mr. Biden had struggled for days over whether to cut off Russian oil amid fears of accelerating the already rapid rise in the price of gasoline. It is a potent political issue for Americans in an election year and a test of how much voters are willing to sacrifice in defense of Ukraine.Even into the weekend, as a bipartisan group of lawmakers in the House tried to finalize legislation to impose a ban on Russian oil, the White House expressed deep concerns, according to officials monitoring the discussions, who said the administration appeared wary of letting Congress take the lead on enacting a ban.A vote on the House bill, which is supported by Speaker Nancy Pelosi of California, was delayed late Tuesday.The president and his aides have discussed a series of additional moves to blunt the impact of the ban, including additional releases from strategic oil reserves. Last week, the United States committed to releasing 30 million barrels of oil, joining 30 other nations for a total release of 60 million barrels.Administration officials have also held diplomatic conversations with other oil-producing nations, including Venezuela, about increasing the flow of oil to keep prices stable. Jen Psaki, the White House press secretary, on Monday confirmed discussions with Venezuela about “energy security” and other issues, but declined to elaborate.Any barrels the United States imports to replace Russian oil will come from a global market that is already stretched. Unless and until Russia finds alternative buyers, the constraint on available supplies is likely to keep prices high.U.S. consumers are already feeling the squeeze. In California, prices for some types of gas has hovered around $6 in recent days; on Tuesday the state average was well over $5.Republicans on Tuesday largely backed Mr. Biden’s decision to cut off Russian oil, giving the president a rare moment of bipartisan support. But even as they did so, many Republicans once again seized on high prices at the pump to criticize him and his party.“Democrats want to blame surging prices on Russia,” Representative Kevin McCarthy of California, the House Republican leader, said on Tuesday. “But the truth is, their out-of-touch policies are why we are here in the first place.”In his remarks, Mr. Biden cast the decision as a moral one, aimed at further crippling Mr. Putin’s economy as Russian forces continued their brutal bombardment of civilians in several of Ukraine’s cities and suburbs after two grueling weeks of war in Europe.“Ukrainian people have inspired the world and I mean that in the literal sense,” Mr. Biden said. “They’ve inspired the world with their bravery, their patriotism, their defiant determination to live free. Putin’s war has caused enormous suffering and needless loss of life of women, children, and everyone in Ukraine.”He added: “Putin seems determined to continue on his murderous path, no matter the cost.”Battles continued to rage across Ukraine on Tuesday as humanitarian officials reported that two million refugees have fled the country seeking safety. But casualties increased as evacuations though supposed “green corridors” continued to come under fire.About 2,000 civilians were able to escape Irpin, a suburb just northwest of Kyiv, Ukraine’s capital, which has spent days without water, power and heat because of the heavy fighting in the area. In the war-battered city of Sumy, east of Kyiv, one humanitarian corridor lasted long enough to allow hundreds of civilians to escape in a convoy of buses led by the Red Cross.Civilians were evacuated from Irpin, Ukraine on Tuesday.Lynsey Addario for The New York TimesBut hundreds of thousands of Ukrainians remain trapped in the besieged southern city of Mariupol.The Ukrainian military claimed to have shot down three Russian fighter jets and a cruise missile early Tuesday, an assertion that appeared to be backed up by several loud explosions over Kyiv, a potential sign that Ukraine’s air defense systems and air force are still functioning.President Volodymyr Zelensky of Ukraine taunted Mr. Putin on Tuesday with a video showing him in his office in Kyiv and saying: “I’m not hiding. And I’m not afraid of anyone.” Mr. Zelensky also spoke by video link to a packed meeting of Britain’s Parliament.The Pentagon on Tuesday rejected an offer by Poland to send its MiG-29 fighter planes to a U.S. air base in Germany to aid the Ukrainians, saying that for such jets to depart a U.S./NATO base “to fly into airspace that is contested with Russia over Ukraine raises serious concerns for the entire NATO alliance.”Separately, the Pentagon said it was sending two Patriot anti-missile batteries to Poland to protect U.S., Polish and other allied troops there, reflecting an increasing fear in Warsaw and in Washington that Russian missiles fired in neighboring Ukraine could end up in Poland, whether on purpose or by accident.White House officials said the president signed an executive order on Tuesday that prohibits anyone in the United States from importing “Russian crude oil and certain petroleum products, liquefied natural gas and coal.” It also bans new U.S. investment directly in Russia’s energy sector or in foreign companies that are investing in energy production in Russia, officials said.In announcing his decision, Mr. Biden acknowledged that some European countries, including Germany and France, would most likely not follow suit because they rely much more heavily on energy from Russia.“A united response to Putin’s aggression has been my overriding focus to keep all of NATO and all of the E.U. and our allies totally united,” Mr. Biden said. “We’re moving forward with this ban understanding that many of our European allies and partners may not be in a position to join us.”Russia-Ukraine War: Key Things to KnowCard 1 of 4Russian oil imports. 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    With Sanctions, U.S. and Europe Aim to Punish Putin and Fuel Russian Unrest

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    The Biden administration and European officials are crushing the Russian economy and stirring mass anxiety to pressure President Vladimir V. Putin to end his war in Ukraine.WASHINGTON — As they impose historic sanctions on Russia, the Biden administration and European governments have set new goals: devastate the Russian economy as punishment for the world to witness, and create domestic pressure on President Vladimir V. Putin to halt his war in Ukraine, current and former U.S. officials say.The harsh penalties — which have hammered the ruble, shut down Russia’s stock market and prompted bank runs — contradict previous declarations by U.S. officials that they would refrain from inflicting pain on ordinary Russians. “We target them carefully to avoid even the appearance of targeting the average Russian civilian,” Daleep Singh, the deputy national security adviser for international economics, said at a White House briefing last month.The escalation in sanctions this week has occurred much faster than many officials had anticipated, largely because European leaders have embraced the most aggressive measures proposed by Washington, U.S. officials said.With Russia’s economy crumbling, major companies — Apple, Boeing and Shell among them — are suspending or exiting operations in the country. The Biden administration said on Thursday that it would not offer sanctions relief amid Mr. Putin’s increasingly brutal offensive.The thinking among some U.S. and European officials is that Mr. Putin might stop the war if enough Russians protest in the streets and enough tycoons turn on him. Other U.S. officials emphasize the goals of punishment and future deterrence, saying that the carcass of the Russian economy will serve as a visible consequence of Mr. Putin’s actions and a warning for other aggressors.But Russia’s $1.5 trillion economy is the world’s 11th largest. No countries have tried pushing an economy of that size to the brink of collapse, with unknown consequences for the world. And the actions of the United States and Europe could pave the way for a new type of great-power conflict in the future.The moves have also ignited questions in Washington and in European capitals over whether cascading events in Russia could lead to “regime change,” or rulership collapse, which President Biden and European leaders are careful to avoid mentioning.“This isn’t the Russian people’s war,” Secretary of State Antony J. Blinken said in a news conference on Wednesday. But, he added, “the Russian people will suffer the consequences of their leaders’ choices.”“The economic costs that we’ve been forced to impose on Russia are not aimed at you,” he said. “They are aimed at compelling your government to stop its actions, to stop its aggression.”The harshest sanctions by far are ones that prevent the Central Bank of Russia from tapping into much of its $643 billion in foreign currency reserves, which has led to a steep drop in the value of the ruble. Panic has set in across Russia. Citizens are scrambling to withdraw money from banks, preferably in dollars, and some are fleeing the country.The United States and Europe also announced new sanctions this week against oligarchs with close ties to Mr. Putin. Officials are moving to seize their houses, yachts and private jets around the world. French officials on Thursday snatched the superyacht of Igor Sechin, the chief executive of Rosneft, the Russian state oil giant.“The sanctions have turned out to be quite unprecedented,” said Maria Snegovaya, a visiting scholar at George Washington University who has studied U.S. sanctions on Russia. “Everybody in Russia is horrified. They’re trying to think of the best way to preserve their money.”The French finance minister, Bruno Le Maire, has used some of the harshest language yet to articulate the mission, telling a radio program on Tuesday that Western nations were “waging an all-out economic and financial war on Russia” to “cause the collapse of the Russian economy.” He later said he regretted his words.Evidence of shock and anger among Russians — mostly anecdotal in a country with restricted speech and little public opinion polling — has raised the specter of mass political dissent, which, if strong enough, could threaten Mr. Putin’s grip on power.Senator Lindsey Graham, Republican of South Carolina, said on Fox News, “The best way for this to end is having Eliot Ness or Wyatt Earp in Russia, the Russian Spring, so to speak, where people rise up and take him down.”Mr. Graham added: “So I’m hoping somebody in Russia will understand that he’s destroying Russia, and you need to take this guy out by any means possible,” reiterating his Twitter post on Thursday calling for an assassination of Mr. Putin.A spokesman for Prime Minister Boris Johnson of Britain said on Monday that the sanctions were “intended to bring down the Putin regime.” Mr. Johnson’s office quickly corrected the statement, saying that it did not reflect his government’s view and that the goal of the measures was to stop Russia’s assault on Ukraine.Michael A. McFaul, a former U.S. ambassador to Moscow, called the talk of Mr. Putin’s overthrow unhelpful, emphasizing that the sanctions should be tailored and described as a means of stopping the invasion. “The objective should be to end the war,” he said.But while the Biden administration has said it is still open to diplomacy with Russia, it has not offered to reverse any of the sanctions in exchange for de-escalation.“Right in this moment, they’re marching toward Kyiv with a convoy and continuing to take reportedly barbaric steps against the people of Ukraine,” Jen Psaki, the White House press secretary, said on Thursday. “So, no, now is not the moment where we are offering options for reducing sanctions.”But in an interview on Friday with the Russian news agency TASS, Victoria J. Nuland, the U.S. under secretary of state for political affairs, suggested terms for possible sanctions relief, albeit maximalist ones. She said that Mr. Putin had to end the war, help to “rebuild” Ukraine and recognize its sovereignty, borders and right to exist. Those are conditions that the Russian leader is highly unlikely to consider.Families in Kyiv, Ukraine, waited for a train west on Friday.Lynsey Addario for The New York TimesAll the while, Biden officials have sought to assure the Russian people that they take no pleasure in their suffering. The United States and Europe have tried to spare Russians some of the effects, including allowing sales of consumer technology to Russia despite sweeping new limits on exports.They have also refrained from imposing energy sanctions because of Europe’s dependence on Russian gas and the risk of higher oil prices.Even so, Mr. Putin and his aides are doing their best to find some political advantage in the sanctions, arguing that the real goal for the West has always been to weaken Russia. As he launched his invasion last week, Mr. Putin said the United States would have sanctioned his country “no matter what.”Russia-Ukraine War: Key Things to KnowCard 1 of 4Nuclear plant seized. More

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    US Escalates Sanctions With a Freeze on Russian Central Bank Assets

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    WASHINGTON — The Treasury Department on Monday moved to further cut off Russia from the global economy, announcing that it would immobilize Russian central bank assets that are held in the United States and impose sanctions on the Russian Direct Investment Fund, a sovereign wealth fund that is run by a close ally of President Vladimir V. Putin.The moves are meant to curb Russia’s ability to use its war chest of international reserves to blunt the impact of sanctions that the United States and European allies have enacted in response to Russia’s invasion of Ukraine.“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine,” Treasury Secretary Janet L. Yellen said in a statement.Russia has spent the last several years bolstering its defenses against sanctions, amassing $643 billion in foreign currency reserves in part by diverting its oil and gas revenues and reducing its holdings of U.S. dollars. New restrictions by the United States and its allies against selling rubles to Russia aim to undercut the country’s ability to support its currency in the face of new sanctions on its financial sector.As a result of the sanctions, Americans are barred from taking part in any transactions involving the Russian central bank, Russia’s National Wealth Fund or the Russian Ministry of Finance.Any Russian central bank assets that are held in U.S. financial institutions are now stuck, and financial institutions outside the United States that hold dollars for the bank cannot move them. Because the United States has acted in coordination with European allies, Russia’s ability to use its international reserves to support its currency has been curbed. Japan joined with Western allies in imposing the central bank sanctions, freezing Russia’s yen-denominated foreign reserves, the news agency Nikkei reported.“This is simply unprecedented to a scale and scope that we haven’t seen since the Cold War,” said John E. Smith, the former director of the Treasury Department’s Office of Foreign Assets Control. “Sanctions against the Central Bank of Russia and the central bank’s assets held worldwide are simply beyond comparison to previous sanctions regimes, particularly involving a major power like Russia.”It is not clear how much of Russia’s currency reserves are held in U.S. dollars, and Biden administration officials declined to provide an estimate in a briefing with reporters on Monday.The sanctions on the Russian Direct Investment Fund represent an expansion of the effort to sever Russian financial ties from the rest of the world and punish Russian elites. The Treasury Department described the fund, which was created in 2011 and operates in the insurance and financial services industries, as Mr. Putin’s “slush fund” and emblematic of Russia’s kleptocracy. The chief executive of the fund is Kirill Dmitriev, a close ally of Mr. Putin.The fund, according to its website, works with the “world’s foremost investors” to make direct investments in leading and promising Russian companies. It has reserved capital of $10 billion under management and has attracted over $40 billion into the Russian economy. The sanctions ban any Americans from investing in the fund and freeze any assets that it holds in the United States.Senior Biden administration officials said the actions were effective immediately. They noted that the value of Russia’s ruble had already fallen more than 30 percent over the weekend and that Russia’s central bank more than doubled its interest rate to try to mitigate the fallout. They also predicted that inflation would soon spike and economic activity would contract as the country’s currency lost value.Even nations that usually remain neutral in global disputes entered the fray.Switzerland, a favorite destination for Russian oligarchs and their money, announced on Monday that it would freeze Russian financial assets in the country, setting aside its tradition of neutrality to join the European Union and a growing number of nations seeking to penalize Russia for the invasion of Ukraine. The country said it would immediately freeze the assets of Mr. Putin, Prime Minister Mikhail V. Mishustin and Foreign Minister Sergey V. Lavrov, as well as all 367 individuals the European Union imposed sanctions on last week.“These are probably the most serious economic sanctions ever imposed on a country,” said Elina Ribakova, the deputy chief economist of the Institute of International Finance, predicting that Russia’s economy could contract by double digits.The U.S. moves represent a significant escalation of sanctions, although the Treasury Department said it was making an exemption to ensure that transactions related to Russia’s energy exports could continue. It is issuing a “general license” to authorize certain energy-related transactions with the Russian central bank.The carve-out means that energy payments will continue to flow, mitigating risks to global energy markets and Europe, which is heavily reliant on Russian oil and gas exports. U.S. officials said that they wanted energy prices to remain steady and that they did not want a spike in prices to benefit Mr. Putin. However, they noted that they were considering measures that would restrict Russia from acquiring technology it needs to be an energy production leader in the long term.“The U.S. and other Western economies have deployed a set of highly potent financial weapons against Russia with remarkable speed,” said Eswar Prasad, a Cornell University economics professor and a former International Monetary Fund official. “Cutting off access to global financial markets and to a country’s war chest of international reserves held in currencies of Western economies amounts to a crippling financial blow, especially to an economy like Russia’s that relies to such a large extent on export revenues.”The measures announced on Monday were born from lessons the United States has learned since imposing sanctions on Russia after its annexation of Crimea in 2014. A senior Biden administration official said that Mr. Putin began amassing international reserves after 2014 to blunt the impact of future sanctions and that the United States, in preparing to exert new pressure on Russia’s economy, determined during months of preparation with European allies that it would need to target Russia’s central bank directly.Understand Russia’s Attack on UkraineCard 1 of 7What is at the root of this invasion? More

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    U.S. escalates sanctions with a freeze on Russian central bank assets.

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    The Treasury Department on Monday moved to further cut off Russia from the global economy, announcing that it would immobilize Russian Central Bank assets that are held in the United States and impose sanctions on the Russian Direct Investment Fund, a sovereign wealth fund that is run by a close ally of President Vladimir V. Putin.The moves are meant to curb Russia’s ability to use its war chest of international reserves to blunt the impact of sanctions that the United States and European allies have enacted in response to Russia’s invasion of Ukraine.“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities, and target the funds Putin and his inner circle depend on to enable his invasion of Ukraine,” Treasury Secretary Janet L. Yellen said in a statement.As a result of the sanctions, Americans are barred from taking part in any transactions involving the Russian Central Bank, Russia’s National Wealth Fund or the Russian Ministry of Finance.The moves represent a significant escalation of U.S. sanctions, although the Treasury Department said it was making an exemption to ensure that transactions related to Russia’s energy exports can continue. It is issuing a “general license” to authorize certain energy-related transactions with the Russian Central Bank.On Saturday, the European Commission, Britain, Canada, France, Germany, Italy and the United States said they would remove some Russian banks from the SWIFT financial messaging system, essentially barring them from international transactions, and impose new restrictions on Russia’s Central Bank to prevent it from using its large international reserves to sidestep sanctions.Russia has spent the last several years bolstering its defenses against sanctions, amassing $643 billion in foreign currency reserves in part by diverting its oil and gas revenues. New restrictions by the United States and its allies against selling rubles to Russia aim to undercut the country’s ability to support its currency in the face of new sanctions on its financial sector. More

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    Before Ukraine Invasion, Russia and China Cemented Economic Ties

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    Facing a wary United States and worried about depending on imports by sea, China is buying more energy and food from its northern neighbor.BEIJING — As Russia wreaks havoc in Ukraine, Moscow has a powerful economic ally to help it resist Western sanctions: China.Chinese purchases of oil from Russia in December surpassed its purchases from Saudi Arabia. Six days before the military campaign began, Russia announced a yearslong deal to sell 100 million tons of coal to China — a contract worth more than $20 billion. And hours before Russia began bombing Ukraine, China agreed to buy Russian wheat despite concerns about plant diseases.In a throwback to the 1950s, when Mao Zedong worked closely with Joseph Stalin and then Nikita Khrushchev, China is again drawing close to Russia. As the United States and the European Union have become wary of China, Beijing’s leaders have decided that their best geopolitical prospects lie in marrying their vast industrial might with Russia’s formidable natural resources.Recent food and energy deals are just the latest signals of China’s economic alignment with Russia.“What happened up to now is only a beginning for both the Russian expansionism by force and the Chinese economic and financial support to Russia,” Shi Yinhong, a professor of international relations at Renmin University in Beijing, said in a text message. “This does not mean that China directly supports in any degree that expansionism — this only means that Beijing strongly feels the necessity to maintain and boost strategic partnership with Moscow.”The United States and the European Union are hoping that sanctions force Russia to reconsider its policies. But Wang Wenbin, the Chinese foreign ministry’s spokesman, said at a briefing on Friday that China opposed the use of sanctions.“Sanctions are never an effective way to solve the problems,” he said. “I hope relevant parties will still try to solve the problem through dialogue and consultation.”At the same time, Russia’s invasion of Ukraine has imposed an awkward diplomatic quandary on China by violating the principle of national sovereignty that the Chinese leaders regard as sacrosanct. While President Xi Jinping of China has not criticized Russia publicly, he could use his country’s economic relationship with its northern neighbor as leverage to persuade the Russians to resolve the crisis quickly.Mr. Xi and President Vladimir V. Putin of Russia spoke by phone on Friday. An official Chinese statement said afterward that Mr. Xi had expressed support for Russia in negotiating an agreement with Ukraine — a stance that Mr. Putin has also favored, provided that Ukraine accepts his terms.Until now, much of China’s energy and food imports came across seas patrolled by the U.S. or Indian navies. As China’s leaders have focused lately on the possibility of conflict, with military spending last year growing four times as fast as other government spending, they have emphasized greater reliance on Russia for crucial supplies.China and Russia share a nearly 2,700-mile border, and in recent years China has become Russia’s largest source of imports and the biggest destination for its exports.“Given the geopolitical tensions, Russia is a very natural geopolitical partner,” said Andy Mok, a senior research fellow at the Center for China and Globalization in Beijing.Initial Western sanctions on Russia have focused on limiting technology exports and imposing financial penalties. For now, U.S. officials have avoided targeting consumer goods, agricultural products and energy, to try to avoid harming ordinary people and further fueling inflation.China is the world’s dominant manufacturer of electronics, machinery and other manufactured goods, and has been supplying them to Russia in exchange for food and energy.A train carrying coal in Yekaterinburg, Russia, in 2020. China’s imports of Russian coal have more than doubled in the past three years.Maxim Babenko for The New York TimesThe new cornerstone of relations between China and Russia is the Sino-Russian nonaggression pact concluded in Beijing on Feb. 4. Mr. Xi and Mr. Putin reached the deal hours before the opening ceremony of the Beijing Winter Olympics and issued a statement saying the countries’ friendship “has no bounds.”The pact freed Mr. Putin to move troops and military equipment from Russia’s border with China to its border with Ukraine while ushering in closer economic cooperation.“The joint statement is strong and has lasting consequences for the new world order,” said Jean-Pierre Cabestan, a research professor of political science at Hong Kong Baptist University.The Chinese and Russian governments share many values, particularly their antipathy to sanctions the West imposes on human-rights grounds. “The two sides firmly believe that defending democracy and human rights should not be used as a tool to exert pressure on other countries,” their pact on Feb. 4 said.When the Obama administration imposed sanctions on Russia after its invasion of Ukraine’s Crimea region in 2014, China helped Russia evade them.It is not clear if China will help Russia evade sanctions put in place this week. On Tuesday, the Biden administration added to previous measures by announcing sanctions against Russia’s two largest financial institutions and sweeping restrictions on advanced technologies that can be exported to Russia. The technological curbs, when taken in concert with allies, would block roughly a fifth of Russian imports, the administration said.Chinese companies that circumvent those rules could face escalating punishment by the United States, including criminal and civil penalties, said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Those businesses could also be cut off from American technology and the financial system.ZTE and Huawei, two Chinese firms that were barred from receiving American technological exports, attracted the attention of the U.S. government in part for evading sanctions on Iran.“The interesting question is: Is China going to comply with this?” Mr. Chorzempa said. China also has a law designed to penalize companies for following extraterritorial sanctions by countries like the United States, he said, all factors that “could put companies in a real bind.”“If they don’t comply with the U.S., they’re in trouble with the U.S., but if they don’t comply with China, they could also face penalties in China,” he said.Of course, collecting fines from companies that are unwilling to pay and monitoring whether businesses comply with the rules could be difficult, Mr. Chorzempa added. “It’s already proving difficult to monitor the things that are already controlled, and if you expand that list, that’s going to be a real challenge to verify what’s going to Russia,” he said.Russia’s Attack on Ukraine and the Global EconomyCard 1 of 6A rising concern. More

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    How the U.S. and Europe Are Targeting Putin With Sanctions

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    WASHINGTON — The United States and Europe moved on Friday to personally penalize President Vladimir V. Putin of Russia for his invasion of Ukraine, imposing sanctions aimed at freezing his wealth while continuing to try to cripple his military and economic capabilities through other new restrictions.White House officials said that President Biden intended to impose sanctions and freeze the assets of Mr. Putin, along with Sergey V. Lavrov, his foreign minister. Other Russian national security officials will also be subject to the sanctions, and the United States plans to impose a travel ban to restrict the movement of Russia’s top leaders.The decisions align the United States with its European allies, whose governments made similar moves earlier in the day.“Treasury is continuing to inflict costs on the Russian Federation and President Putin for their brutal and unprovoked assault on the people of Ukraine,” Treasury Secretary Janet L. Yellen said in a statement announcing the sanctions.European leaders met into the early hours of Friday to hammer out an agreement over a new set of sanctions aimed more broadly at the Russian economy and at Mr. Putin himself, as his troops advanced in their invasion of Ukraine.One of the decisions was to freeze the assets of Mr. Putin and Mr. Lavrov, but not to impose a travel ban on them, according to three European Union diplomats and officials familiar with the draft E.U. sanctions.The new American and European sanctions are a provocative step given how rarely governments, including the United States, take aim at foreign leaders. Yet they may prove largely symbolic given that the status of Mr. Putin’s financial holdings has been cloaked in mystery and his money is not believed to be held in the United States.Jen Psaki, the White House press secretary, said that imposing sanctions directly on Mr. Putin “sends a clear message about the strength of the opposition to the actions by President Putin and the direction in his leadership of the Russian military.”Speaking to reporters on Friday, Ms. Psaki said the decision had been made in the past 24 hours after consultation with European leaders. She would not comment on what impact she believed the sanctions would have on Mr. Putin. But she underscored that they were a demonstration of trans-Atlantic unity in opposition to his actions.While the United States has imposed sanctions on and frozen the assets of some Russian oligarchs, targeting Mr. Putin directly was a significant escalation. It puts him in similar company with Presidents Bashar al-Assad of Syria and Aleksandr G. Lukashenko of Belarus, both of whom have been subject to personal sanctions by the U.S. government.Adam M. Smith, a former Treasury Department official who is now a partner at the law firm Gibson, Dunn & Crutcher, said placing sanctions on Mr. Putin sent a significant message given that the United States had never taken a similar action against such a powerful leader. However, he said that it was unlikely that the sanctions would affect Mr. Putin’s wealth or change his calculus in Ukraine.“I don’t think Putin is really going to lose much sleep on being sanctioned,” Mr. Smith said.The personal sanctions add to the growing list of restrictions that the Biden administration, in coordination with Europe, has rolled out. The United States has placed sanctions on major Russian financial institutions and the nation’s sovereign debt, and on Thursday, it took steps to prevent Russia from gaining access to American technology critical for its military, aerospace industry and overall economy.But the attempt to punish Mr. Putin has exposed the degree to which many European countries rely on Russia for energy, grains and other products. A package of penalties, which European leaders described as unprecedented in terms of its size and reach, was difficult to forge consensus on, even as Russian forces approached Kyiv, Ukraine’s capital.Europe’s economies are deeply intertwined with Russia’s economy, and the more the European Union leans into Russian sanctions, the more its own members will also feel the pain. The toughest of sanctions could even derail the bloc’s tentative recovery from the recession induced by the coronavirus pandemic.That is why negotiators left off the table particularly difficult elements, such as imposing sanctions on oil and gas companies or banning Russia from SWIFT, the platform used to carry out global financial transactions on commodities including wheat. E.U. officials said one key reason for their reluctance to cut off Russia’s access to the platform was that Europe uses it to pay for the gas it buys from Russia.Experts said that the approved sanctions were tough and that the speed at which the European Union was moving was impressive. But some were critical of the leaders for not going further.President Volodymyr Zelensky of Ukraine was scathing in a statement posted on Facebook on Friday.“This morning, we are defending our state alone,” he said. “Like yesterday, the world’s most powerful forces are watching from afar. Did yesterday’s sanctions convince Russia? We hear in our sky and see on our earth this was not enough.”Understand Russia’s Attack on UkraineCard 1 of 7What is at the root of this invasion? More

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    Biden Hits Russia With Broad Sanctions for Putin’s War in Ukraine

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    The penalties will affect Russia’s biggest banks, its weapons industry, its largest energy company and families close to President Vladimir V. Putin. The country’s stock market has plummeted.WASHINGTON — President Biden, vowing to turn President Vladimir V. Putin of Russia into a “pariah,” announced tough new sanctions on Thursday aimed at cutting off Russia’s largest banks and some oligarchs from much of the global financial system and preventing the country from importing American technology critical to its defense, aerospace and maritime industries.The package unveiled by the U.S. government is expected to ripple across companies and households in Russia, where anxiety over Mr. Putin’s full-scale invasion of Ukraine has already begun setting in. The nation’s stock market fell more than 30 percent on Thursday, wiping out a huge amount of wealth.The new U.S. sanctions include harsh penalties against the two largest Russian financial institutions, which together account for more than half of the country’s banking assets.U.S. officials are also barring the export of important American technology to Russia, which could imperil industries there. In addition, the United States will limit the ability of 13 major Russian companies, including Gazprom, the state-owned energy conglomerate, to raise financing in Western capital markets. And it is penalizing families close to Mr. Putin.The sanctions against the financial giants will cause immediate disruptions to Russia’s economy but are manageable over the longer term, analysts said. The technology restrictions, on the other hand, could cripple the ability of certain Russian industries to keep up.“Putin chose this war, and now he and his country will bear the consequences,” Mr. Biden said in remarks from the East Room of the White House. “This is going to impose severe cost on the Russian economy, both immediately and over time.”It was the second round of American sanctions imposed on Russia this week, following a more modest tranche that Mr. Biden announced on Tuesday after Mr. Putin’s government recognized two Russia-backed insurgent enclaves in eastern Ukraine as independent states.It was accompanied by a blizzard of sanctions from other countries announced on Thursday. Britain adopted penalties largely in line with the American ones, with additions such as barring Aeroflot, the Russian airline, from operating in its territory. The European Union announced measures including bans on large bank deposits in the European Union and halts in many technological exports to Russia, including semiconductors. Japan and Australia also unveiled various sanctions.One question in the days and weeks ahead is whether the United States and its European allies can stay in lock step on Russia’s actions, as they claim they will. Secretary of State Antony J. Blinken spoke on both Wednesday and Thursday with the European Union’s top diplomat, Josep Borrell Fontelles, a sign of the intense efforts to coordinate a joint response.The new suite of sanctions from Washington includes some of the tougher penalties that U.S. officials had said were being considered. There had been debate about whether constricting the operations of Russia’s biggest banks and other large companies would cause too much pain to ordinary Russians and to citizens in other countries.Russia has a $1.5 trillion economy, the world’s 11th-largest. The global economy remains precarious at the start of the third year of the pandemic, and many governments are grappling with the highest inflation rates in decades. The price of crude oil has been surging this week because of Mr. Putin’s actions.“I know this is hard, and that Americans are already hurting,” Mr. Biden said on Thursday. “I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me.”But he added that Mr. Putin’s aggression could not go unanswered. “If it did, the consequences for America would be much worse,” he said. “America stands up to bullies. We stand up for freedom. This is who we are.”Residents lined up at a bus station in Kyiv, Ukraine’s capital, on Thursday.Emile Ducke for The New York TimesDaleep Singh, the deputy national security adviser for international economics, told reporters that over time, the sanctions would “translate into higher inflation, higher interest rates, lower purchasing power, lower investment, lower productive capacity, lower growth and lower living standards in Russia.”But it is unclear whether the sanctions will compel Mr. Putin to halt his offensive, in which dozens of Ukrainian soldiers and civilians have already been killed, according to Ukrainian officials. If Mr. Putin pushes forward, then the sanctions will serve as a punishment, Mr. Blinken has said.Some analysts are skeptical that the pain of the sanctions will break through to Mr. Putin, who has isolated himself during the pandemic, even from some of his close advisers.Alexander Gabuev, a scholar at the Carnegie Moscow Center, said the Russian leader and the top officials around him had adopted a bunker mentality, understanding that their lives and wealth depend on their status at home, not within Western nations. They also see themselves as being on the frontline of an ideological contest with the United States and its allies, he said.Furthermore, the Russian government adopted fiscal policies to shield the country’s economy after the United States and Europe imposed sanctions in 2014 following Mr. Putin’s first invasion of Ukraine, and some top security officials and oligarchs have profited off the changes.Edward Fishman, who oversaw sanctions policy at the State Department after Russia annexed Crimea in 2014, said he was surprised at the breadth of the new U.S. sanctions beyond the financial and technology sectors. He said the measures limiting access to capital markets for Russian state-owned enterprises in industries as varied as mining, metals, telecommunications and transportation “cut across the commanding heights of the Russian economy.”Even as Russia’s stock market plunged and the ruble fell to a record low against the dollar, the country may avoid all-out financial panic. Sergey Aleksashenko, a former first deputy chairman of the Central Bank of Russia and former chairman of Merrill Lynch Russia, said the financial measures were likely to inflict serious but ultimately bearable pain.“They will be able to manage what is related to the financial sector,” Mr. Aleksashenko said. “Maybe it will be complicated, maybe it will be expensive — but it’s doable.”More damaging, albeit over a longer term, Mr. Aleksashenko said, would be the new technology export controls.The export controls imposed by the Commerce Department are aimed at severing the supply of advanced technologies to Russia, such as semiconductors, computers, lasers and telecommunications equipment.The measures are expected to stop direct technological exports from American companies to Russia, potentially hobbling the Russian defense, aerospace and shipping industries, among others. They also go beyond previous sanctions issued by the U.S. government by placing new export limits on products that are manufactured outside the United States but use American equipment or technology.The administration said the measures, taken in concert with allies, would restrict more than $50 billion of key inputs to Russia. The country imported $247 billion of products in 2019, according to the World Bank.“This is a massive set of technology controls,” said Emily Kilcrease, a senior fellow at the Center for a New American Security.Understand Russia’s Attack on UkraineCard 1 of 7What is at the root of this invasion? More

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    White House Prepares Curbs on Russia’s Access to U.S. Technology

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    Biden administration officials have warned Russia that it could face further restrictions on technology that is critical to its economy and military.The Biden administration warned on Wednesday that it had prepared additional measures aimed at cutting off Russia from advanced technology critical to its economy and military in the event of further aggression by President Vladimir V. Putin toward Ukraine.The United States on Tuesday announced sanctions on two Russian banks and curbs on Russia’s sovereign debt, effectively isolating the country from Western financing. President Biden also announced further sanctions on the Nord Stream 2 natural gas pipeline and its corporate officers.Export controls could ratchet up the pressure on Russia by preventing the country from obtaining semiconductors and other advanced technology used to power Russia’s aerospace, military and tech industries.“If he chooses to invade, what we’re telling him very directly is that we’re going to cut that off, we’re going to cut him off from Western technology that’s critical to advancing his military, cut him off from Western financial resources that will be critical to feeding his economy and also to enriching himself,” Wally Adeyemo, the deputy Treasury secretary, said on CNBC on Wednesday.The Biden administration has not clarified what specific restrictions it would impose on the products Russia imports. But the actions and statements of administration officials suggest they could repurpose a novel measure that the Trump administration turned to to cripple the business of Huawei, a Chinese telecom company, in 2020, export control specialists said.The tool, called the foreign direct product rule, allows U.S. officials to block more than just exports from the United States to Russia, which totaled just $4.9 billion in 2020. It also allows American officials to restrict exports to Russia from any country in the world if they use American technology, including software or machinery.Companies can seek licenses to sidestep the restrictions but they are likely to be denied.Daleep Singh, the deputy national security adviser, said on Friday that the administration was “converging on the final package” of sanctions and export controls, and suggested that those controls would target tech products.“We produce the most sophisticated technological inputs across a range of foundational technologies — A.I., quantum, biotech, hypersonic flight, robotics,” Mr. Singh said. “As we and our partners move in lock step to deny these critical technology inputs to Russia’s economy, Putin’s desire to diversify outside of oil and gas — which is two-thirds of his export revenue, half of his budget revenues — that will be denied.”“He’s spoken many times about a desire for an aerospace sector, a defense sector, an I.T. sector,” Mr. Singh said of Mr. Putin. “Without these critical technology inputs, there is no path to realizing those ambitions.”Kevin Wolf, a partner in international trade at Akin Gump who worked in export controls under the Obama administration, said the White House could tailor its use of export controls to target certain strategic sectors, for example companies in the aerospace or maritime industry, while bypassing products used by the Russian populace, like washing machines.“They’re making it clear they’re not trying to take action that harms ordinary Russians,” Mr. Wolf said.Andy Shoyer, co-lead of global arbitration, trade and advocacy for Sidley Austin, said the restrictions appeared likely to focus on semiconductors and semiconductor equipment. The novel export controls that the United States wielded against Huawei have a powerful reach when it comes to semiconductors, since even chips made abroad are mostly manufactured and tested using machinery based on American designs, he said.“It’s not just what’s physically exported from the U.S.,” Mr. Shoyer said. “It could encompass a substantial amount of production, because so much of the semiconductor industry relies on U.S. technology.”The global semiconductor industry, which has been roiled by shortages and supply chain disruptions throughout the pandemic, could face more disruptions given Ukraine’s role in the semiconductor supply chain.The Ukraine Crisis’s Effect on the Global EconomyCard 1 of 6A rising concern. More