The US also announced sanctions on the wife and daughter of Putin’s foreign minister, Sergey Lavrov. The United Kingdom later announced its own sanctions, and the European Union were expected to follow suit as well, ramping up Western pressure on Moscow as the war enters its second month.
The sanctions are designed to tighten the vice on Russia’s economy, which has been kneecapped by Western punishment. Still, ever-harsher consequences for the invasion of Ukraine have not appeared to force Putin to ease a brutal campaign that has increasingly targeted civilians.
The “full blocking” sanctions on Russia’s largest financial institution, Sberbank, and its largest private bank, Alfa Bank, are meant to grind Russia’s economy further to a halt. They will prohibit transactions with any American financial institutions and freeze assets held by the banks in the US.
Sberbank holds nearly one-third of Russia’s total banking sector assets, and the White House says that with Wednesday’s sanctions, more than two-thirds of the Russian banking sector are now blocked.
“The sad reality is Putin’s war will make it harder for Russians to travel abroad. It means their debit cards may not work. They may only have the option to buy knockoff phones and knockoff clothes, the shelves at stores may be empty,” the official told reporters.
“The reality is the country’s descending into economic and financial and technological isolation and at this rate, it will go back to Soviet-style standards from the 1980s,” the official went on.
In targeting Putin’s two adult daughters, the US hopes to freeze any assets the Russian President may be hiding with them, according to the senior administration official. Without detailing which of Putin’s assets could be hiding with Mariya Putina and Katerina Tikhonova, the official said the practice was common among the Russian elite.
Members of Russia’s Security Council, including former President and Prime Minister of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin, are also being targeted by individual sanctions. The US has already sanctioned more than 140 oligarchs and their family members and over 400 Russian government officials, the senior official said.
The new sanctions will cut those individuals off from the US banking system and freeze any assets held in the United States.
The White House also announced a ban on new investment in Russia that will be executed in alignment with the G7 and EU. The ban will be implemented with an executive order signed by President Joe Biden.
And the US will also apply full blocking sanctions on critical major Russian state-owned enterprises, which will be announced by the Department of Treasury on Thursday. The official also noted Tuesday’s announcement that the Department of Treasury has blocked Russia from making debt payments with dollars stockpiled at US banks.
While the US and its allies have imposed the most sweeping sanctions regime targeting a country of the size of Russia in history, officials acknowledge it has done little to shift Putin’s calculation. The threat of the sanctions didn’t stop the invasion itself, and the piling on of economic penalties hasn’t brought Russia any closer to a withdrawal or negotiated settlement since.
Pressed about the efficacy of sanctions in ending Putin’s war in Ukraine, the senior official sought to underscore the effect they are having on life in Russia and said Putin would eventually have to reckon with his people.
“Even an autocrat like Putin has a social contract with the Russian people. He took away their freedom in exchange for promising stability, and so he’s not giving them stability,” the official said.
“The question really is not so much: What can we do and when will that have an effect? I think it’s: What’s the endgame here for Putin? What’s he playing for?” the official said. “This is very clearly becoming a failure for him and at some point he will have to recognize that reality.”
This story has been updated with additional reporting.