New York.- The Biden administration is urging international banks not to help Russia evade sanctions, warning them that those institutions would risk losing access to markets in the United States and Europe if they support Russian companies or oligarchs facing financial constraints such as result of the war in Ukraine.
The warning by a high-ranking Treasury Department official highlights the efforts that the United States is making to put pressure on Russia’s economy through American financial might, and that underscores the broad view that the Biden administration is taking in based on his ability to apply sanctions by trying to isolate Russia from the global economy.
In private meetings with representatives of international banks in New York on Friday, Treasury Undersecretary Adewale Adeyemo outlined the consequences of helping the Russians circumvent sanctions.
He pointed to the “material support provision” which states that even if a financial institution is headquartered in a country that has not imposed sanctions on Russia, the company may face consequences for violating US and European Union restrictions, including being removed from the financial systems of those countries.
Financial institutions from China, Brazil, Ireland, Japan and Canada attended the meeting, which was organized by the Institute of International Bankers.
Adeyemo said that US banks have been careful to avoid violating US sanctions, but that Russian individuals and companies were looking to set up trusts to use as proxies to circumvent sanctions.
He also pointed to companies that could support sanctioned oligarchs who are trying to move their yachts to different ports to avoid having them seized.
Most jurisdictions have been abiding by the sanctions, but some, like the United Arab Emirates, have continued to harbor Russian assets. The yachts of various Russian oligarchs have been docked in Dubai.