EXCLUSIVE: US Ready to Exert Devastating Economic Pressure on Russia, Official Says

By Valentina Pasquali

The White House has already crafted a package of financial sanctions and trade restrictions that would immediately impose “catastrophic” consequences on Russia if the Kremlin orders an invasion of Ukraine, an official with the U.S. National Security Council said Wednesday.

Officials have worked to shield U.S. financial and non-financial firms from any collateral effects but the extensive nature of the prospective actions means that they too will probably feel some impact, Peter Harrell, the National Security Council’s senior director for international economics and competitiveness, told attendees of the virtual Sanctions Space Summit.

“We have measures that are fully drafted and ready to go, you sort of hit the enter key … post them publicly,” Harrell said Wednesday. “We do want to minimize costs … but we are also looking at really quite major sanctions on Russia and there will be collateral costs for industry.”

U.S. intelligence began warning of Russia’s potential invasion of Ukraine in December after the Kremlin intensified its cyber- and digital-warfare campaign against its neighbor and shifted troops, tanks and military vehicles near their border.

The past month has seen U.S. and European officials locked in high-stake negotiations with their Russian counterparts to resolve the impasse, which primarily centers on Moscow’s concerns over NATO’s growing presence in former Soviet states and satellite nations, but have also prepared to respond aggressively to any military incursion.

Harrell on Wednesday refrained from going into details about the possible sanctions to avoid telegraphing the U.S. strategy to Russian officials, but said President Joe Biden plans to eschew a gradual escalation in favor of an all-out approach.

“We would not adopt the traditional escalatory ladder … where we begin with targeted sanctions on government officials, move on to state-owned entities and then the strategic sectors,” Harrell said. “We expect to adopt a start-high, stay-high approach in which we, in coordination with our allies and partners, impose severe costs on Russia’s economy and financial system immediately.”

Russia’s largest financial institutions and other sectors, including the country’s artificial intelligence, quantum computing and aerospace industries represent the most likely targets of restrictions that the Treasury and Commerce departments have prepared, he said.

The package of sanctions and export controls would far surpass the narrower measures the U.S. put in place after Russia annexed Crimea and Russian-backed separatists took control of the Donbas region of eastern Ukraine in 2014, Harrell said.

Federal lawmakers have criticized the administrations of both ex-President Donald Trump and President Joe Biden for not hitting corrupt Russian officials and oligarchs with visa bans and assets freezes, including under the expanded authority of the Countering America’s Adversaries Through Sanctions Act, which took effect in July 2017.

On Jan. 12, Robert Menendez (D-NJ) and nearly 40 other Democratic senators unveiled the Defending Ukraine Sovereignty Act, White House-supported legislation that would require Treasury to blacklist President Vladimir Putin, other top officials in Moscow and at least three of a possible 12 Russian banks, including Sberbank, VTB and Gazprombank, in the event of war.

“I think that our public support for that bill gives an idea of the kind of quite impactful measures that we think are valuable here,” Harrell said Wednesday.

Harrell pledged that Treasury and Commerce would accompany any imposition of sanctions on Russia with detailed guidance and “direct engagement” with impacted U.S. firms.

Contact Valentina Pasquali at

Topics : Sanctions , International Banking
Source: U.S.: White House/U.S. President
Document Date: February 2, 2022