On Friday, the US Treasury’s Office of Foreign Assets Control (OFAC) announced that nations maintaining economic ties with Russia could face secondary sanctions if they permit Russian banks to open local branches to facilitate trade. These measures aim to close loopholes that Moscow is reportedly using to evade existing sanctions. The Treasury Department alleges that Russia is employing complex schemes to pay for dual-use goods imported from third countries.....CONTINUE READING THE ARTICLE FROM THE SOURCE
“Treasury is aware of Russian efforts to facilitate sanctions evasion by opening new overseas branches and subsidiaries of Russian financial institutions,” the department stated. It urged foreign regulators and financial institutions to exercise caution with any dealings involving new branches or subsidiaries of Russian banks, warning that it has tools to target these new evasion channels.
The new measures focus on Russian banks not yet sanctioned. Since the escalation of the Ukrainian conflict in February 2022, Washington has imposed several rounds of sanctions targeting foreign banks interacting with Russian financial entities. Last December, President Joe Biden ordered secondary sanctions against institutions allegedly supporting Russia’s defense sector.
In June, the White House expanded its crackdown to include any foreign bank working with sanctioned Russian entities, and imposed sanctions on subsidiaries of major Russian banks in China, Kyrgyzstan, and India. The US and its allies have introduced extensive restrictions against Moscow since 2014, with recent measures targeting 400 individuals and companies accused of supporting Russia’s military-industrial supply chains.
Russia’s Ambassador to the US, Anatoly Antonov, criticized the sanctions as ineffective and harmful to US consumers and international partners. Moscow has labeled these measures as illegitimate and responded with its own travel bans and retaliatory actions.
