US Treasury Imposes New Sanctions on Russia’s Gazprombank Amid Ongoing Ukraine Conflict

The United States has imposed new sanctions on Russia’s Gazprombank, as announced by the Treasury Department on Thursday. This action comes as President Joe Biden intensifies efforts to penalize Moscow for its invasion of Ukraine ahead of his departure from office in January.

The sanctions utilize the Treasury’s most powerful tool, prohibiting Gazprombank from handling any new energy-related transactions involving the U.S. financial system. The measures also ban trade with Americans and freeze the bank’s U.S. assets. Gazprombank, one of Russia’s largest banks, is partially owned by the Kremlin-controlled gas company Gazprom.

Since the invasion began in February 2022, Ukraine has urged the U.S. to impose stricter sanctions on Gazprombank, which processes payments for natural gas from Gazprom’s European customers. Notably, the sanctions include exemptions for transactions related to the Sakhalin-2 oil and gas project until June 28, 2025, allowing several Japanese firms to continue purchasing liquefied natural gas from the project.

In addition to targeting Gazprombank, the Biden administration sanctioned 50 smaller Russian banks to limit the country’s connections to the international financial system, aiming to prevent Russia from acquiring technology and equipment for its military efforts. Treasury Secretary Janet Yellen emphasized that these actions would hinder the Kremlin’s ability to evade sanctions and fund its military operations.

Gazprombank responded by stating that the new sanctions would not impact its operations. Meanwhile, the Russian embassy in Washington did not provide comments on the matter. The Treasury also issued new licenses allowing U.S. entities to wind down transactions with Gazprombank and divest from its debt or equity.

The sanctions are intended to disrupt Russia’s ability to finance its military endeavors in Ukraine, as Gazprombank is a key conduit for purchasing military supplies and compensating soldiers. The administration believes these measures will enhance Ukraine’s position on the battlefield and contribute to achieving a just peace.

While Gazprombank has long been on the U.S. sanctions radar, it was seen as a last resort due to its role in energy and concerns about collateral impacts on Europe. Experts suggest that foreign banks may now be more hesitant to engage with Gazprombank.

As the Biden administration seeks to strengthen energy sanctions before the end of his term, analysts view this latest action as a significant step toward cutting off Russia’s energy revenue streams.

US Treasury Imposes New Sanctions on Russia’s Gazprombank Amid Ongoing Ukraine Conflict
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