US announces largest Russia sanctions package since invasion of Ukraine

President Joe Biden warns of consequences of not stopping Vladimir Putin as war drags into third year

A graveyard where Ukrainian soldiers who died in the Russian-Ukrainian war are buried, in Kramatorsk, Donetsk. AFP

The US on Friday imposed sanctions on more than 500 people and entities linked to Russia's war machine, the largest package of punitive actions Washington has taken since Moscow launched its invasion of Ukraine in 2022.

“Ukraine is still standing, Ukraine is still free. The people of Ukraine remain unbowed and unbroken in the face of [Russian President Vladimir] Putin's vigorous onslaught,” President Joe Biden said in remarks from the White House.

Mr Biden also warned Mr Putin would continue his offensive if he is not stopped in Ukraine.

The Treasury and State departments sanctioned 550 people because of Russia's repression, human rights abuses and its continued assault against Ukraine.

The measures, which come a week after Russian opposition leader Alexei Navalny died at a Russian penal colony in the Arctic Circle, also targeted three Russian officials connected to his death, the Treasury Department said.

Washington's sanctions target Russia's financial sector, defence industrial base and its procurement networks, while also aiming at those who have sought to evade prior sanctions across multiple continents.

Additionally, the US is putting sanctions on 100 entities for supporting Russia's war machine.

The sanctions are “going to have a growing and long-term impact on Russia”, Secretary of State Antony Blinken said during a news conference at the G20 summit in Brazil.

President Volodymyr Zelenskyy thanked the US for its action on Friday.

"I am grateful to the United States for imposing the largest single package of sanctions against Russia," he wrote in a post on X.

"We must deprive Putin’s Russia of all means and maximise the sanctions pressure so that Moscow can no longer finance its war."

Washington has imposed a raft of sanctions against Moscow since Mr Putin began his full-scale invasion of Ukraine two years ago.

In addition to punishing oligarchs and high-ranking members of the Kremlin, as well as those connected to Russia's procurement of drones from Iran, the US has also sought to hobble the Russian economy.

Among the harshest measures undertaken by the US and its allies was cutting of several Russian central banks from the SWIFT payments network.

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Banishing the Russian banks from SWIFT has significantly limited Russia's ability to transfer assets abroad or obtain foreign currency. It has also impacted Russian citizens, who have been unable to use their credit cards when travelling outside the country.

After shrinking in 2022, Russia's economy grew by 3.6 per cent last year and is projected to increase by 2.6 per cent this year, according to figures from the International Monetary Foundation.

However, this growth largely reflects military spending, which is expected to increase by 70 per cent this year.

“For the first time in modern Russian history, the 2024 budget allocates more to military expenditures than social policy,” US Deputy Secretary of the Treasury Wally Adeyemo said in prepared remarks at the Council on Foreign Relations in New York.

Washington also imposed new price cap sanctions on Russian oil, building on measures the US and allies implemented in 2022 to stabilise the energy market while also limiting Russian profits.

“Unsurprisingly, the Kremlin is investing time and resources into evading the price cap. And in response, we have further cracked down, enforcing and adjusting the price cap to make the Kremlin’s costs rise and profits fall,” Mr Adeyamo he said.

Russia's ambassador to the US, Anatoly Antonov, said the sanctions would not stop Moscow from protecting its interests, the RIA news agency reported.

As the US marked the second anniversary of the war in Ukraine with its sanctions package, Mr Biden's administration also warned failure by Congress to deliver more aid to Kyiv would have devastating consequences.

“Today’s grim milestone should spur us all to decide what kind of future we want for our children and grandchildren: an open, secure, and prosperous world of rules and rights, or the violent and lawless world of aggression and chaos that Putin seeks,” Defence Secretary Lloyd Austin said.

The Republican-led US House of Representatives thus far has shown little appetite for moving on a $95 billion security package passed by the Senate, of which $60 billion would be for Ukraine's defensive purposes.

Ukrainian forces have already begun facing the consequences of dried-up aid after withdrawing from Avdiivka in Donetsk.

Meanwhile, Senate Majority Leader Chuck Schumer led a delegation to Kyiv on Friday to demonstrate Washington's continued support of Ukraine.

“When we return from Ukraine, we will make clear exactly what is at stake here in Ukraine, for the rest of Europe, for the free world,” he said.

Before the sanctions announcement, the Justice Department on Thursday also announced a series of charges and forfeiture proceedings against criminal networks aiding Russia's war efforts.