The administration has for weeks vowed to hit Moscow with a potent cocktail of banking sanctions and export controls
The administration has for weeks vowed to hit Moscow with a potent cocktail of banking sanctions and export controls
If Russia further invades Ukraine, the Biden administration could deprive it of low- and high-tech US and foreign-made goods, from commercial electronics and computers to semiconductors and aircraft parts, people familiar with the matter told Reuters. told.
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People said President Joe Biden will get by by expanding the list of goods that require US licenses before suppliers can ship them to Russia, and that his administration will reject those licenses.
The measures, the details of which have not been previously reported, are part of a suite of export control penalties that the United States has devised for damaging Russia’s economy, which includes everything from lasers to telecommunications equipment and marine goods. is aimed.
Tuesday as part of a round of sanctions unveiled by Biden to punish Russian President Vladimir Putin for deeming two separate regions of Ukraine independent and deploying troops in areas to “keep the peace” were not announced.
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The White House and the Commerce Department, which oversees US export controls, did not respond to requests for comment.
The package, which was still being corrected over the weekend and could change, comes even as some White House officials have promised to protect the Russian consumer from the brunt of the penalty.
“The goal of export control measures is really to reduce Russia’s ability to industrialize in some key areas,” Peter Harrell, who sits on the White House’s National Security Council, said in a speech last month. “We are thinking about how we degrade Russia’s industrial production and high-tech sectors, rather than how we target the Russian people,” he said.
In response to the crowding of hundreds of thousands of Russian soldiers on Ukraine’s borders, the administration has for weeks vowed to hit Moscow with a potent cocktail of banking sanctions and export controls.
Reuters reported on Saturday that the Biden administration had prepared a package of sanctions against Russia that includes barring US financial institutions from processing transactions for major Russian banks.
The most comprehensive measure ever contained in the export control package will take a page from the sanctions imposed by former President Donald Trump on Chinese telecom giant Huawei Technologies Co Ltd. This would dramatically expand the scope of the so-called Foreign Direct Products Rule (FDPR), which would require firms that use US equipment to manufacture technology overseas to obtain a US license before shipping to Russia.
“This is extraordinarily novel and has the potential to be much more important than the controls on exports of these items from the United States,” said Washington attorney Kevin Wolf, a former Commerce Department official.
US suppliers must also obtain licenses for some Russia-bound items they do not currently require, such as civil aircraft parts. Whether Europe will follow suit with similar measures remains to be seen.
Japan said on Tuesday it was ready to join the United States and other G7 industrialized nations in imposing sanctions on Russia.
On Monday, as an initial reaction to Putin’s moves in eastern Ukraine, Biden vowed to end investment and trade in the regions, while British Prime Minister Boris Johnson announced initial sanctions targeting Russian banks and billionaires .
Under the proposed changes to the US export control package, license applications will, in turn, face a strict “policy of denial” standard of review, meaning that only in rare cases will the administration approve them.
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In addition, Russian companies listed as so-called military end users for their alleged ties to the Russian military, including a handful of aircraft manufacturers, will be added to a business blacklist known as the Entity List. This would expand the scope of items that companies would need a license to obtain.
Finally, Washington will expand the scope of products that will require approval from the United States when shipped to Russian military end users through a broader application of the FDPR rule, made overseas with US equipment, subject to US licensing requirements. Destined for all items and companies that support the military.
US exports to Russia were less than $5 billion in 2020, according to the Commerce Department, and are already facing a number of sanctions. But using the FDPR rule dramatically increases the impact of the steps included in the package.
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