US Treasury reports slower financial flows for Russia due to sanctions threat
Illustrative photo: the US Treasury spoke about the slowdown in Russian financial flows due to the threat of sanctions (facebook.com/ukr.embassy.usa)
The threat of the United States government to impose sanctions on foreign financial institutions has significantly altered the financial flows between Russia and countries such as Turkiye, the United Arab Emirates (UAE), and Kazakhstan. Such financial operations have slowed down, stated the United States deputy secretary of the treasury, Wally Adeyemo, in an interview with Reuters.
According to a US official, data obtained by the Treasury, including reports from financial institutions, indicate a reduction in the movement of funds after Washington issued a decree in December of last year threatening sanctions on financial institutions of third countries for assisting Russia in circumventing Western sanctions imposed due to the large-scale military aggression against Ukraine.
"In the data that I can see, I've seen a significant difference in terms of financial flows that have been transactions...potentially being blocked by institutions. And I've heard about this also from some of the monitors who are in institutions ... that they're taking a more cautious approach with regard to doing any business with Russia, which is exactly what we wanted," said Adeyemo.
It is noted that the earlier threat by the US to impose sanctions on financial companies doing business with Russia has led to a "chilling effect" on Turkish-Russian trade, disrupting or slowing down some payments for both imported oil and Turkish exports, according to seven sources familiar with the matter.
While Washington's executive order is not directly aimed at the energy sector, it complicated certain payments by Turkiye for Russian crude oil and payments by Russia for a broader range of Turkish exports, sources of the agency reported.
Sanctions for assisting Russia in bypassing imposed restrictions
Two years ago, the US and allied countries imposed numerous sanctions on Russia for its full-scale invasion of Ukraine, and since then Western states have been trying to prevent the Kremlin from circumventing these measures.
The United States has repeatedly warned companies against assisting Moscow in evading sanctions and has targeted firms in the United Arab Emirates, Turkiye, and China.
High-ranking US officials have also visited Turkiye, the UAE, and other countries to warn that companies may lose access to the markets of the Group of Seven if they engage in business with companies subject to US restrictions.
The executive order announced in the United States at the end of last year did not include a general threshold but penalized companies if they knowingly engaged in transactions on behalf of those sanctioned by the US or linked to the Russian military-industrial complex, even creating the risk of being cut off from the US financial system.
Russia continues to bypass sanctions
Recently, Politico reported that despite sanctions on Russian oil, the aggressor country earned 1 billion euros in 2023 from the purchase of fuel by the European Union.
Media also reported that the Italian company Beretta still imports firearms into Russia through its subsidiary and the company of arms baron Mykhail Khubutiia.
In Czechia, it was stated that Russian intelligence services, as before, remain active in Europe, helping to circumvent European Union sanctions.
Earlier, Bloomberg reported that Russia is buying weapons technology from the European Union worth tens of millions of euros, despite sanctions imposed against the Kremlin.
