US Expands Sanctions On Russia Over Support From Countries Like China; Biden To Sign Security Agreement With Ukraine

The fresh sanctions aimed at seven Chinese and Hong Kong-based companies for shipping millions of dollars-worth material to Russia.

Ukrainian President Volodymyrr Zelenskyy with US counterpart Joe Biden. Photo: AP

The United States on Wednesday widened its sanctions against Russia as G7 leaders are set to gather in Italy for a summit, where the top priority is to increase support for Ukraine and push down the machinery of Russia.

The latest sanctions focus on Chinese companies which assist Russia in pursuing its war in Ukraine, raising the stakes for other foreign financial institutions that work with sanctioned Russian organisations.

Since the beginning of the war, the US has sanctioned over 4,000 Russian businesses and individuals in a bid to suffocate the flow of money and armoury to Moscow. However, new companies continue arising amid Russia's attempts at reworking the supply chains.

Aaron Forsberg, the State Department's Director for Economic Sanctions Policy and Implementation, told The Associated Press, "We have to be very honest with ourselves that Putin is a very capable adversary who is willing to adapt and find those willing collaborators."

Therefore, he said that the sanctions against Russia are a "dynamic affair".

Though the flow of illicit goods couldn't be stopped by the sanctions, the aim is to give Russia a hard time in sourcing key technology as well as driving up the market prices on the goods.

Wednesday's sanctions targeted over USD 100 million in trade between Russia and its suppliers for the war. Over 300 new sanctions are majorly aimed at dissuading companies and individuals in countries including China, the United Arab Emirates and Turkiye from helping Moscow.

Emphasising the US' stance that Kremlin has turned the Russian economy onto a war footing, the sanctions also threaten foreign financial institutions if they do business with almost any sanction Russian organisation.

Treasury Secretary Janet Yellen said that Russian military is "desperate for access to the outside world".

The announcement of fresh sanctions came shortly before President Joe Biden's arrival in Italy, where he and other G7 leaders are trying to turn frozen Russian assets into billions of dollars of aid to Kyiv.

Notably, the sanctions aimed at seven Chinese and Hong Kong-based companies for shipping millions of dollars-worth material to Russia, including those that could be used in the Russian weaponry.

China is the leading supplier of crucial components to Russia, providing it with both Chinese and Western technology, US officials said.

A senior economist at the Kyiv School of Economics, Benjamin Hilgenstock, said that the move clarifies that US is "willing to wade into more treacherous territory" by increasing the pressure on the Chinese government.

Earlier on Tuesday, White House national security spokesman John Kirby had said, "We will address (China's) support for the Russian defence industrial base. And we will confront China's non-market policies that are leading to harmful global spillovers."

China had not sanctioned Russia after the latter invaded Ukraine and Putin, meanwhile, concluded a visit to China in May by pressing on the two countries' growing strategic ties.

Janis Kluge, a Russia sanctions specialist at the German Institute for International and Security Affairs in Berlin (SWP), said, "The Chinese leadership is not interested in making these sanctions a success."

She said that Beijing is reluctant to putting a stop to a valuable trade, which is worth large sums of money, adding that it does not want to "add the pressure on Putin in this war".

Chinese imports have been vital to Russia in his war, since the former is a major producer of critical components, including for Western companies. However, Hilgenstock said, that while Chinese technology is seen on the battlefield in Ukraine, most of the components are still from Western nations, including those which are “overwhelmingly” found in high-tech drones and ballistic missiles.

In December 2023, the White House had said that foreign financial entities could be sanctioned if they work with Russia's defence sector institutions.

But with the latest sanctions, the US has given a message that institutions that work with almost any sanctioned Russian entity could face consequences.

Analysts were cited by AP as saying that the fear of triggering secondary sanctions is an effective threat.

“Chinese banks have always been very careful not to become a target of secondary sanctions because it would be very costly,” Kluge said, pointing to cases where Chinese banks have ended relationships with Russian customers.

The latest sanctions also targeted financial infrastructure of Russia, including the Moscow Stock Exchange. It also aims to disrupt the development of Russia's energy sector and future sources of cash, including Arctic liquified natural gas projects which have been shipped critical LNG technology by a Chinese company.

Additionally, the package targeted people involved in the forced transfer and deportation of Ukrainian children to Russia.


US President Joe Biden and President Volodymyr Zelenskyy will sign a bilateral security agreement with each other on Thursday, aiming to send a signal to Russia of American intention to support Kyiv, the White House said.


National Security Advisor Jake Sullivan told reporters that the agreement would not directly commit US troops to Ukraine's defense against Russian invasion, a red line drawn by Biden.

“We want to demonstrate that the US supports the people of Ukraine, that we stand with them and that we'll continue to help address their security needs,” Sullivan said, adding "this agreement will show our resolve”.

Sullivan termed the agreement to be a 'bridge' to when Ukraine is invited to join the NATO alliance, which has been a long-term priority of Zelenskyy. However this, the allies, requires the end to the Russia-Ukraine war.


(With AP inputs)