The US has expanded its sanctions on Russia, intensifying restrictions on banks engaged with sanctioned entities. This move builds on a December program targeting foreign banks aiding Russia’s war effort in Ukraine. The new measures also include sanctions on the Moscow Stock Exchange, which halted trading in dollars and euros as a result.

President Joe Biden’s December executive order initially imposed sanctions on banks dealing with approximately 1,200 individuals and companies linked to Russia’s military operations. This list has now grown to about 4,500 entities. The US is also targeting gold laundering as part of its broader strategy.

Peter Harrell, a former White House senior director for international economics, told Reuters that the US is moving toward a global financial embargo on Russia. The US Treasury announced sanctions on parts of Russia’s financial system, including the Moscow Exchange, Russia’s largest foreign exchange market.

The sanctions also focus on technology. US-made chips and other technology found in downed Russian equipment on Ukraine battlefields have led to measures making it harder for companies to supply such tech. The US will target shell firms in Hong Kong selling chips to Russia and restrict software and IT services, although these actions are not meant to disrupt civil society and telecommunications.

Despite extensive sanctions since Russia’s full-scale invasion of Ukraine in February 2022, the International Monetary Fund predicts Russia’s economy will grow by 3.2% this year. However, analysts believe these measures will eventually hinder Moscow’s war efforts and weaken its economy over time.

“Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world,” said Treasury Secretary Janet Yellen. “Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries,” she added.

The US announced the decision as President Biden prepared to attend a G7 summit in southern Italy, alongside leaders from the UK, Canada, France, Germany, Italy, and Japan. A key priority for the G7 leaders at this summit is enhancing support for Ukraine, which is now in its third year of resisting Russia’s invasion.