The US has announced fresh sanctions on 300 individuals and entities thought to be supporting Russia’s war effort, as well as secondary locations across Asia, Europe and Africa.
As part of its crackdown, Chinese firms supplying semiconductor chips to Russia have been targeted, Reuters reports.
Treasury secretary Janet Yellen said the US was aiming to “increase the risk for financial institutions dealing with Russia’s war economy”.
New approach
In addition to hitting Russian entities, the new targets include shell companies based in Hong Kong, which have allegedly routed high-tech chips to Russia.
Russia has also had access to other military equipment, such as drones, radios and missiles, believed to have been imported.
Al Jazeera notes that entities in South Africa, the UAE and Turkey were also among those sanctioned.
Yellen added that the US would seek to “eliminate paths for evasion and diminish Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services”.
“Every day, Russia continues to mortgage its future to sustain its unjust war of choice against Ukraine.”
Russian response
Bloomberg reports that Russia has responded to the new sanctions by ceasing trade of US dollars and euros in Russia’s main exchange, which was hit by this round of sanctions.
The ban hit the country’s foreign exchange, precious metals, stock markets and currency, which the publication predicts will lead to unfavourable exchange rates for financial traders.
Speaking to Bloomberg, economist Sofya Donets suggested the move will have minimal impact in Russia:
“For the average Russian, nothing much will change. Transactions in dollar and euros for individuals have already been significantly limited for quite some time.”
She added that "what will not change is the continued strengthening of the yuan’s position in Russia”. This follows Russia shifting to the Chinese Yuan as its main reserve currency in the wake of its invasion of Ukraine and subsequent Western sanctions.
Sanction efficacy
Major economies in the West have been applying sanctions to Russia since 2022, when it launched an invasion of neighbouring Ukraine.
The effectiveness of the sanctions has been limited by the rerouting of Russian exports and imports by proximate countries or allies. For example, while divesting of Russian oil and gas, the EU has received increased oil imports from India, which, in turn has been importing significantly more Russian crude since the war began.
While the UK imposed export controls on manufactured goods like cars, the number of units exported to central Asian nations like Kyrgyzstan increased 1000-fold.