Reuters reported Monday that the administration of Vice President Joe Biden is preparing sanctions on Russia that will prohibit U.S. financial institutions from processing transactions from Russia’s largest banks if Russia invades Ukraine (Feb. 21).
By eliminating the “correspondent” banking links between the two countries’ banks, the measures would have a negative impact on Russia’s economy.
The authorities have stated that the sanctions will include limits on financial links, but this has never been disclosed previously. Anonymous sources have claimed that VTB Bank, Sberbank, VEB, and Gazprombank are among the banks that could be targeted.
Additionally, the United States has the option of putting select Russian persons and corporations on the Specially Designated Nationals (SDN) list, which would effectively restrict them from doing business with Americans and freeze their assets in the nation.
Reuters noted that banks might still be damaged if it becomes more difficult for them to trade in U.S. dollars, which is the global reserve currency and most global trade is conducted in dollars.
“This is a sanction with bite, but without the more complicated and fatal sanction of being placed on the SDN list and having all assets in the United States or in the hands of United States citizens blocked,” Washington lawyer Kay Georgi, an expert in international trade, told Reuters.
A Soviet cyberattack was predicted by regulators earlier this month as a result of the ongoing tensions between Russia and Ukraine.
As of early February, there were roughly 100,000 Russian troops near the border, and European officials were concerned about the impact of an invasion.
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Cyberattacks were a concern for the European Central Bank, which has been on high alert.
In light of COVID, the regulator is investigating scams, and the Ukraine crisis is focusing attention on Russian threats. Banks have been conducting cyber tests to ensure they are prepared in the event of an attack.