Announcement of Additional Sanctions on 300 Chinese Parts Suppliers
Regulations Also Imposed on Foreign Financial Institutions Dealing with Sanctioned Entities
The United States announced large-scale sanctions against Russia a day before the Group of Seven (G7) summit. The plan is to expand regulations to include 'secondary sanctions' (Secondary Boycott) on Chinese companies selling semiconductors to Russia as well as foreign financial institutions dealing with them.
According to major foreign media including the Associated Press (AP) on the 12th (local time), the U.S. Treasury Department announced that it added more than 300 companies and individuals to the sanctions list for providing products and services that enable Russia to continue its war. The sanctions list includes dozens of Chinese component suppliers, companies from T?rkiye and the United Arab Emirates (UAE), the Moscow Exchange (MOEX) and its subsidiaries, companies related to Russian liquefied natural gas (LNG) projects, and dozens of electronics companies in the Caribbean region.
The Treasury Department further stated, "We are enhancing the effectiveness of secondary sanctions on foreign financial institutions involved with Russia's wartime economy," adding, "There is a risk of sanctions for those conducting or facilitating significant transactions with sanctioned Russian banks such as VTB." Secondary sanctions refer to blocking foreign financial institutions’ access to the U.S. financial system if they transact with primary sanctioned entities.
Treasury Secretary Janet Yellen explained, "Russia's wartime economy is deeply isolated from the international financial system, and the Kremlin desperately wants access to the outside world," adding, "We are removing Russia’s financial evasion pathways to prevent access to foreign technology, equipment software, and IT services." White House National Security Advisor Jake Sullivan emphasized, "Any financial institution from any country, including China, faces serious risks of secondary sanctions if they transact with Russia’s defense industry base or entities sanctioned for war-related activities."
The AP reported that the Treasury’s recent measures have increased the number of Russian individuals and entities that could expose foreign financial institutions to secondary sanctions risk from about 1,000 to 4,500. Peter Harrell, former senior director for international economics at the White House, described the U.S. sanctions expansion as a "paradigm shift," noting that "the U.S. is taking steps to impose international financial embargoes on Russia for the first time."
Meanwhile, at the G7 summit to be held in Italy from the 13th to 15th (local time), plans to support Ukraine’s reconstruction using frozen Russian assets will be discussed. John Kirby, White House National Security Communications Coordinator, said at a briefing on the 11th, "We will announce measures to release frozen Russian assets to help Ukraine’s reconstruction," adding, "This will be decided unanimously by the G7."
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