A Republican senator is pushing the US Treasury to tighten its sanctions on a range of companies, warning that gaps in the current regime are strengthening the hand of Russian president Vladimir Putin.
Steve Daines, one of the first members of Congress to visit Ukraine after war broke out, urged Treasury secretary Janet Yellen on Tuesday to impose tougher penalties on Bank Rossiya, Gazprom, Gazprombank and Rosneft.
Speaking to Yellen during a hearing of the Senate banking committee, Daines said: “Our current sanction regime is full of holes and enforcement on entities that are currently sanctioned is severely lacking.”
In a separate letter to the Treasury secretary sent on Monday, Daines wrote: “We must act to end this war expeditiously, and that means immediately ratcheting up sanctions on Russia and Vladimir Putin himself.”
The US has launched what some commentators have called “financial warfare” on the Kremlin since Russian forces invaded Ukraine, including freezing part of Russia’s foreign currency reserves and sanctioning a range of companies and individuals.
However, Daines argued in his letter that some of the penalties had not worked as the sanctioned entities have remained in business. He called for the Treasury to tighten its restrictions on Bank Rossiya in particular, a relatively small Russian bank that has been accused of having links to Putin.
The bank was hit with sanctions in 2014, but Daines said that it had been able to carry on trading, in part by doing business through other companies in which it owns a stake but not a controlling share. He called on the Treasury to sanction those companies: Cyprus-based Telcrest Investments and the Dutch company ABR Investments.
Bank Rossiya did not respond to a request for comment. ABR and Telcrest could not be reached for comment.
Daines also called for Yellen to put Rosneft, Gazprom and Gazprombank on the Specially Designated Nationals And Blocked Persons List, which would put any company that does business with them at risk of violating US sanctions.
This would in turn make it significantly more difficult for European companies to buy Russian gas, since US banks might be more wary of helping complete such transactions.
David Asher, a former state department official and senior fellow at the Hudson Institute, said: “All of this together should have a devastating effect, if combined with sufficiently tough messaging from the Treasury and ruthless enforcement.”
Yellen would not commit to strengthening sanctions against those companies. But she told the committee: “Almost every week we’ve announced further steps to tighten our sanctions, so we wish to take every action we possibly can to raise the pain to Russia, and to end this war as soon as possible.”
She also insisted Russia was feeling the pain of the sanctions that have already been imposed, saying the country was “clearly in recession”, with inflation running at around 20 per cent this year.
She added that the Treasury is considering allowing a licence for Russia to make debt repayments to expire, potentially pushing the country closer to a default.