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US Government Forbids Citizens from Engaging in Transactions with Central Bank of Russia and Others

UTC by Tolu Ajiboye · 3 min read
US Government Forbids Citizens from Engaging in Transactions with Central Bank of Russia and Others
Photo: Shutterstock

The US government wants to strain financial activities in Russia as much as possible, to deter Putin from proceeding with Ukraine invasion.

The US Treasury is currently prohibiting transactions with the Central Bank of Russia as part of additional sanctions following Russia’s invasion of Ukraine. In addition, the Biden-led US government has also sanctioned the Russian Direct Investment Fund to express disapproval at the incursion.

US President Joe Biden had announced that his government would enforce punitive measures on Russia in conjunction with ally nations. This announcement came after Biden convened a virtual session with allied world leaders to discuss Russia’s Ukraine invasion. Now Biden seems to be making good on his agenda to rebuke the Eastern European powerhouse. Essentially, people in the US can no longer complete transactions with others in Russia.

One of such sanctions designed to cripple the Russian financial system forbids Americans from engaging in business with Russia’s governing bank. In addition to freezing Russian assets within the US, Biden also included a key Russian sovereign wealth fund to the American blacklist. Furthermore, according to the Office of Foreign Assets Control (OFAC), US citizens can not do business with the Russian Federation’s Ministry of Finance.

The OFAC also sanctioned the Russian Direct Investment Fund (RDIF). The sanction also extends to the fund’s CEO Kirill Dmitriev, who reportedly has close ties to Russian President Vladimir Putin.

US Government Official Breaks Down the Transaction Sanctions Imposed on Russia

According to a senior official in the Biden administration, the new sanctions will take immediate effect. The US is starting without delay to prevent any attempt by the Russian government to save some of its assets. As the Washington official stated via a conference call with reporters:

“We wanted to put these actions in place before our markets open because what we learned over the course of the weekend from our allies and partners was the Russian Central Bank was attempting to move assets and there would be a great deal of asset flight starting on Monday morning from institutions around the world.”

Explaining the perceived totality and sweeping nature of the US sanctions imposed on Russia, the official stated:

“Our strategy to put it simply is to make sure that the Russian economy goes backward. As long as President Putin decides to go forward with his invasion of Ukraine.”

The US noted that it expects its allies to take similar measures against Putin and Russia going forward.

Peace Talks Between Russia and Ukraine

Russia came under a wave of global criticism after invading Eastern European neighbor Ukraine. Since then, heavy Ukrainian casualties have been reported, with thousands of others displaced and seeking refuge. Stocks, commodities, and futures took a hit following the incursion, with the Dow, and S&P 500 declining markedly. Furthermore, the global prices of oil soared, as revealed via benchmark indexes such as Brent crude. Russia’s Ruble national currency also tumbled up to 40% against the US dollar.

Earlier today, the Ukraine Defense Ministry stated that peace talks between the warring factions were underway at the Ukraine-Belarus border.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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