WASHINGTON, Feb 26 (Reuters) – The U.S. government’s threat to hit foreign financial institutions with sanctions could lead to major changes in the flow of funds between Russia and countries including Turkey, the United Arab Emirates and Kazakhstan. said Deputy Treasurer Wally Adeyemo.
Adeyemo said in an interview with Reuters that data available to the U.S. Treasury, including reports from financial institutions, shows that Washington issued an executive order in December threatening sanctions on third-country financial institutions that support Russia. He said this shows that the movement of funds has been decreasing since then. Ignoring sanctions imposed by Western countries for the invasion of Ukraine.
“The data I can see shows significant differences in the flow of funds from transactions that may be blocked by financial institutions,” Adeyemo said.
“And we’ve heard about this from several of the monitors in the facility who say they’re taking a more cautious approach to dealing with Russia, which is exactly what we wanted.”
Reuters reported last week that seven people familiar with the matter said US threats to sanction financial institutions doing business with Russia have chilled Turkish-Russian trade, making it harder to pay for imported oil and some Turkish exports. It was reported that the project was being disrupted or delayed.
Although the executive order did not specifically target energy, it complicates some of Turkey’s payments for Russian oil and Russia’s payments for Turkey’s broader exports, the officials said. .
The United States and its allies imposed thousands of sanctions on Russia over its invasion of Ukraine two years ago and have since sought to prevent Russia from circumventing the measures.
The United States has repeatedly warned companies not to help Russia evade sanctions, targeting companies in the United Arab Emirates, Turkey and China.
Senior US officials also visited countries including Turkey and the United Arab Emirates (UAE), warning that companies could lose access to G7 markets if they do business with US-regulated companies.
The executive order does not include a common standard that would only penalize companies for knowingly engaging in transactions on behalf of companies that are subject to U.S. sanctions or have ties to Russia’s military-industrial infrastructure. is at risk of being cut off from the U.S. financial system. What if you get involved without knowing it?
Compliance shift
Adeyemo said the bank’s compliance department was taking the executive order seriously because it was the first time the U.S. government had announced the imposition of secondary sanctions. Secondary sanctions target foreign nationals and companies that do business with foreign nationals who are already subject to U.S. sanctions.
“Shortly thereafter, their CEOs and below started requesting meetings with us to discuss ‘what we can do to ensure they maintain access to dollars,'” he said.
“And these were big banks… They knew what they were focusing on and wanted to make sure they were on the right side. Because even if they’re doing some business with Russia, it pales in comparison to Russia.”The amount of business they do with the United States, or the amount of business they do with dollars. ”
The U.S. government has so far refrained from using new executive orders to sanction foreign financial institutions.
The United States on Friday imposed sweeping sanctions against Russia targeting more than 500 individuals and entities in retaliation for Russia’s invasion of Ukraine and the death of Russian opposition leader Alexei Navalny.
Ahead of this measure, which commemorates the second anniversary of the invasion of Russia, experts were focused on whether the United States would make use of the new measures it issued in December. However, the US government did not target foreign financial institutions in this policy.
“What we’re seeing in terms of the information that we’re collecting is throwing sand into the gears of the financial networks that they were using to access products, and now they’re finding new ways to That’s it,” Adeyemo said of the executive order’s impact on Russia.
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Reporting by Daphne Psaledakis, David Lawder and Andrea Shalal. Editing: Don Durfee, Andrea Ricci
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