Ukraine was: the EU proposes an oil embargo on Russia, but what could the US do to tighten sanctions?

The United States imposed several sanctions on Russia for the invasion of Ukraine in February, targeting its central bank, major lenders, oligarchs and Russian President Vladimir Putin.

Here are some ways the US could further increase sanctions against Russia.

The EU executive on May 4 proposed the toughest package of sanctions against Moscow for its war in Ukraine, including a planned embargo on Russian oil.

Diplomats said the talks were complex, but many expressed confidence that all 27 EU governments could agree before next week.

Sanctions on oil and energy

Edward Fishman, who worked on sanctions against Russia at the State Department during President Barack Obama’s administration, said that now that the EU is moving towards an oil embargo, it opens up possibilities for what Washington and its allies can do. do next.

“I think the next step will be the US to work with the EU and the rest of the G7 to globalize that campaign against Russia’s oil sales,” Fishman said.

Some measures the West could impose to prevent Russia from receiving payments for oil could include requiring all payments for Russian oil to be deposited in escrow accounts outside of Russia and setting a cap. of price on what can be paid for Russian oil, supported by the threat of secondary sanctions, Fishman said.

Another option would be for the EU to impose import taxes on Russian oil, Fishman said.

Brian O’Toole, a former Treasury Department official now with the Atlantic Council think tank, said the United States could also ban the provision of insurance for Russian oil cargoes and threaten secondary sanctions to any foreign person who conducts a significant transaction with a Russian cargo ship.

He said such a move “greatly complicates Russia’s ability to ship oil elsewhere.”

The US could also tighten energy-related sanctions further by adding major companies like oil giant Rosneft or gas producer Gazprom to the Specially Designated Nationals (SDN) list.

Sanctions on banks and state-owned enterprises have been tightened

Experts said the US can also expand its punitive measures against Russian banks and state-owned enterprises.

The United States has imposed sanctions on major Russian banks, including Sberbank, the country’s largest lender.

Washington could further target Gazprombank and others, O’Toole said, using Washington’s most powerful sanction tool and adding them to the SDN list.

Such a move would effectively expel them from the US banking system, ban their trade with Americans, and freeze their American assets.

“Aside from Gazprombank, there is nothing strategic about the banking world in Russia anymore. So frankly, if they did Gazprombank separately, I think the next step would just be a complete financial embargo,” O’Toole said.

Financial embargo

A full financial embargo on Russia would likely be implemented through the issuance of a new executive order that would prevent Americans from exporting or importing goods, services or technologies from Russia, O’Toole said.

“Then Russia becomes Iran,” he said.

Secondary sanctions

The US could also impose secondary sanctions against designated Russian entities and individuals, which would threaten anyone in the world transacting with Russia, Fishman said.

Additional SWIFT restrictions

In early March, the EU named seven banks that would ban it from SWIFT, the world’s leading international payments network, including Russia’s second largest bank VTB. However, the lenders handling the energy payments have been spared.

The US and its allies could further tighten these restrictions and block more or all Russian banks from accessing SWIFT.

The latest round of EU sanctions proposes to exclude Sberbank from SWIFT.

oligarchs

The United States could impose sanctions on Russian oligarchs who have not yet been targeted, perhaps aligning its measures with the EU and the United Kingdom, which have targeted several Russian oligarchs not so far designated by Washington.

They include billionaire Roman Abramovich and tycoon Mikhail Fridman.

In his State of the Union address in March, Biden said the United States will work to seize yachts, luxury apartments and private jets of wealthy Russians linked to Putin.