The U.S. unveiled its biggest one-day sanctions package against Russia since the invasion of Ukraine two years ago, targeting more than 500 people and entities in a fresh bid to squeeze the country's economy and send a message over the death of dissident Alexey Navalny.
Sanctioned people and entities included Russia's Mir payment system, a military drone manufacturer and its top staff, and three people linked to Navalny's death earlier this month in a Russian prison. A State Department advisory said the moves -- which also included pressure on Russia's state-owned atomic energy company Rosatom Corp. -- were aimed at "imposing additional costs on Russia for both its internal repression and foreign aggression" led by President Vladimir Putin.
"That's why I'm announcing more than 500 new sanctions in response to Putin's brutal war of conquest, in response to Alexey Navalny's death," President Joe Biden said Friday at the White House. "We can't walk away now. That's what Putin is betting on."
Just as important was what was left off the list: the U.S. largely avoided sanctions on Russia's metals sector and held off major sanctions on energy amid wariness of economic shocks in an election year. That led to forecasts that Russia's economy -- which has largely withstood the sanctions campaign -- would only continue to grow.
"The latest announcements mark only an incremental tightening of the sanctions regime and we still estimate that Russia's economy will expand by around 1% to 1.5% in 2024," Alexander Isakov, Russia economist at Bloomberg Economics, said in a note. Sanctions on Mir will complicate Russia's access to western technology "but aren't likely to close those channels completely."
The U.S. has already imposed sweeping sanctions affecting whole swaths of Russia's economy and prominent oligarchs after the invasion of Ukraine. It's acted in concert with European allies, which have also imposed about a dozen sanctions packages in a complementary bid to punish Putin and crimp his forces' ability to wage war.
The Kremlin's calculation, however, that it would be able to outlast U.S. resolve appears to be paying off as billions in aid is stalled in the approval process in Congress, leaving Ukrainian troops short of the shells they need to hold off Putin's forces.
Ukraine presidential adviser Mikhailo Podolyak said the only action that will scare Putin or Russia's elites is to provide more weapons.
"Lots of weapons," Podolyak wrote on X, formerly Twitter. "A really big amount of weapons for Ukraine. Long-range, anti-missile, anti-marine weapons. The rest is a fiction, delayed awareness, chronicling of the process, prolongation of the war."
Maria Snegovaya, a senior fellow at the Center for Strategic and International Studies, said that primarily sanctioning Russia's defense industry and failing to cut meaningfully into Russia's energy revenue will not be enough to halt the war.
"One way or another, they will have to eventually address Russia's oil revenues and have to consider an oil embargo," Snegovaya said. "The oil price cap has effectively stopped working."
NO HEAVY HITTERS
None of the people or entities targeted Friday were especially well known. That highlighted how the U.S. and European nations have already imposed harsh penalties and export controls on the most significant sectors of the Russian economy in the days after the invasion.
That includes freezing the country's central bank assets and cutting several of its banks off from the Swift financial messaging system. A price cap on Russian oil was introduced in the summer of 2022 and implemented in December of that year, targeting Putin's most lucrative commodity.
In specific response to Navalny's death, the State Department targeted three Russian officials the U.S. says are connected to his death, including the deputy director of Russia's Federal Penitentiary Service, who was promoted by Putin to the rank of colonel general on Monday, three days after Navalny died.
The sanctions bar the officials from traveling to the U.S. and block access to U.S.-owned property, but they appear largely symbolic given that the officials are unlikely to travel to or have assets or family in the West.
At the same time, the U.S. has held off a more severe clampdown on Russian oil sales for fear of causing a surge in crude prices -- a politically perilous scenario during an election year. The U.S. has also resisted singling out Russia's metals sector. In 2018, aluminum surged in response to sanctions imposed on Russians including United Co. Rusal International PJSC. Those sanctions were later unwound.
Russia has also managed to defy the oil price cap, finding willing buyers among allies such as China. Other nations including North Korea and Iran have kept it supplied with munitions to press ahead with the fight in Ukraine.
At the same time, support for Ukraine is wavering in the U.S. A bill to provide Ukraine another $60 billion in weapons and munitions is stalled in the House of Representatives, with Republican lawmakers refusing to let it go ahead. Former President Donald Trump, the presumptive Republican nominee for the 2024 presidential election, has come out strongly against it, leading many of his supporters in Congress to abandon it.
The EU, for its part, added sanctions on several foreign companies over allegations that they have exported dual-use goods to Russia that could be used in its war against Ukraine. The 27-nation bloc also targeted scores of Russian officials, including members of the judiciary, local politicians and people it said were "responsible for the illegal deportation and military re-education of Ukrainian children."
The Russian foreign ministry called the EU sanctions "illegal" and said they undermine "the international legal prerogatives of the UN Security Council." In response, the ministry is banning some EU citizens from entering the country because they have provided military assistance to Ukraine. It did not immediately address the U.S. sanctions.
Overall, since the start of the war, the U.S. Treasury and State departments have targeted more than 4,000 officials, oligarchs, firms, banks and others under Russia-related sanctions authorities. The EU asset freezes and travel bans constitute its 13th package of measures imposed by the bloc against people and organizations it suspects of undermining the sovereignty and territorial integrity of Ukraine.
"Today, we are further tightening the restrictive measures against Russia's military and defense sector," EU foreign policy chief Josep Borrell said. "We remain united in our determination to dent Russia's war machine and help Ukraine win its legitimate fight for self-defense."
Information for this article was contributed by Fatima Hussein, Lorne Cook, Josh Boak, Zeke Miller and Emma Burrows of The Associated Press; and by Daniel Flatley and Akayla Gardner of Bloomberg News (TNS).