US and allies preparing new sanctions on Russian supply chains

WASHINGTON (NYTIMES) – The United States is preparing new sanctions targeting the supply chains of Russia’s military industrial sector as it seeks to erode Moscow’s ability to attack Ukraine, Deputy Treasury Secretary Adewale Adeyemo said on Tuesday (March 29).

The new sanctions will be rolled out in coordination with Western allies and come amid an ongoing effort to exert pressure on the Russian economy.

Russia’s central bank, major financial institutions and defence companies have already been subjected to coordinated sanctions.

“We are planning to target additional sectors that are critical to the Kremlin’s ability to operate its war machine, where a loss of access will ultimately undermine Russia’s ability to build and maintain the tools of war that rely on these inputs,” Mr Adeyemo said during a speech at Chatham House, an international affairs think-tank in London.

“In addition to sanctioning companies in sectors that enable the Kremlin’s malign activities, we also plan to take actions to disrupt their critical supply chains.”

The US last week imposed sanctions on Russian defence companies such as Tactical Missiles Corporation JSC, which makes weapons systems, along with new sanctions targeting 328 members of the State Duma, the Lower House of Russia’s Federal Assembly.

In addition to sanctions, the US and its allies have been utilising export controls to cut off the flow of semiconductors, aircraft components and other technologies that are crucial to Russia’s defence, maritime and aerospace industries.

Mr Adeyemo did not elaborate on the mechanics or timing of the supply chain sanctions.

He said in his speech that multilateral coordination was key to ensuring that sanctions aimed at Russia would be effective.

“When it comes to using economic tools to advance our national security, collective action significantly increases the costs we impose on our adversaries while providing opportunities to limit the collateral impact on our allies and partners,” Mr Adeyemo said.

The speech was delivered at the start of a six-day trip that Mr Adeyemo is making with stops in London, Brussels, Paris and Berlin to work with allies on tightening sanctions enforcement and preventing evasion.

Despite the robust nature of the sanctions, there are already signs that Russia is mitigating them and finding ways to stabilise its currency as oil and gas sales continue.