Digital Article Repository: Effects of the Russia-Ukraine Conflict

Effects of the Russia-Ukraine Conflict

The following articles were curated to outline potential effects and mitigation efforts as a result of the Russia-Ukraine conflict. Click here for more information on this complicated crisis and an explanation as to how we got here, what Russia wants, and more questions, answered.

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U.S. Treasury Imposes Immediate Economic Costs in Response to Actions in the Donetsk and Luhansk Regions

February 24, 2022 —Targeting Russia’s Two Largest Financial Institutions: Treasury is taking unprecedented action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank)and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars. The vast majority of those transactions will now be disrupted. By cutting off Russia’s two largest banks — which combined make up more than half of the total banking system in Russia by asset value — from processing payments through the U.S. financial system. The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency, and security of the U.S. financial system.

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U.S. Treasury Imposes Immediate Economic Costs in Response to Actions in the Donetsk and Luhansk Regions: 

The United States Remains Fully Prepared to Impose Further, Expansive Economic Costs, New Sector Determination Enables Treasury to Target Russia’s Entire Financial System

February 22, 2022 — Treasury is targeting Russia’s ability to finance aggression against its neighbors by sanctioning the Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB), along with 42 of their subsidiaries. VEB is crucial to Russia’s ability to raise funds, and PSB is critical to Russia’s defense sector. These sanctions ensure VEB and PSB can no longer do business in the United States and are cut off from the U.S. financial system. All assets under U.S. jurisdiction will be immediately frozen and U.S. individuals and entities are prohibited from doing business with these institutions unless authorized by OFAC. This will immediately impair the ability of VEB and PSB to perform basic functions in the international financial system. Today’s action constrains Russia’s ability to finance defense-related contracts and raise new funds to finance its campaign against Ukraine. Treasury is also designating influential Russians and their family members in Putin’s inner circle believed to be participating in the Russian regime’s kleptocracy, including the Chairman and CEO of PSB.

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