Financial transaction

Joe Biden targets Vladimir Putin’s inner circle but keeps ‘mother of all sanctions’ in reserve

Sanctions introduced by Joe Biden on Tuesday night targeted Vladimir Putin’s inner circle but were called “appeasement” by leading Republicans.

Mr. Biden has ordered sanctions against two major Russian state-owned financial institutions that are key to the Kremlin and the Russian military.

Vnesheconombank, which has more than $50 billion in assets, has been described by a US official as a “glorified piggy bank for the Kremlin”.

The other institution, Promsvyazbank, which has more than $35 billion in assets, funds Russian military activities, the United States said.

Both will be shut out of the global financial system, the White House said.

The United States has also introduced measures to prevent Russia from trading its debt in Western markets.

Those sanctioned included Aleksandr Bortnikov, the director of the Federal Security Service (FSB), the successor to the KGB.

Former Russian Prime Minister Sergei Kiriyenko, who is now Mr Putin’s first deputy chief of staff, and Promsvyazbank chief executive Petr Fradkov were also sanctioned.

But that was far from the full panoply of punishments available to the US president.

He avoided cutting Russia off from SWIFT, the international banking transaction system, which would make most financial transactions with the country impossible.

Bob Menendez, the Democratic chairman of the Senate Foreign Relations Committee, said, “This is what I consider to be the mother of all sanctions.”

In a statement, House of Representatives Republican leaders said: “Unfortunately, President Biden has always chosen appeasement and his tough rhetoric on Russia has never been followed by strong action.”

Lindsey Graham, the Republican Senator, said: “The sanctions outlined are woefully insufficient to deter Putin’s efforts to redraw the map of Europe and dismember a neighboring democracy.

“This is a critical moment in history and President Biden is not seizing the moment.”

US ready to ‘push a button to take further action’

The White House said this was just the “first tranche” of sanctions, and there would be a “wave of others if Mr Putin pushes further in Ukraine”.

A senior Biden administration official said: “This is only the edge of the pain we can inflict. No Russian financial institution is immune if this invasion continues.