The White House has defended its sanctions strategy against Russia, but critics contend President Joe Biden can do more to change Russian President Vladimir Putin’s Ukraine calculus.
The Biden administration’s tough talk regarding “severe” consequences has come under renewed scrutiny as officials warn of the possibility of chemical warfare, possible collusion between Russia and China, and more casualties in Ukraine.
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The White House should slap full blocking and secondary sanctions on the Central Bank of Russia, Sberbank, Russia’s largest financial institution, and Gazprombank, an energy giant, according to Foundation for Defense of Democracies senior adviser Rich Goldberg. That would patch up the “Swiss cheese” approach Biden’s aides have adopted so far, he argued.
“The steps they have announced are primarily focused on U.S. persons and U.S. dollar transactions, not in any way threatening U.S. sanctions against third parties,” he told the Washington Examiner.
Goldberg, a Vandenberg Coalition advisory board member, also called for the banks to be disconnected from the SWIFT messaging network that facilitates international payments and sanctions to be imposed on participants in the Russian equivalent, SPFS. And to avoid rattling the energy market, Goldberg advocated escrow accounts like those rolled out for former President Donald Trump’s now-defunct Iran sanction regime.
“Allow energy trade to continue on the condition that any money owed for imports of Russian energy cannot be repatriated to Russia and cannot be moved out of the country that is importing the energy,” he said. “Attack the revenue, not the barrels.”
It was too soon “to crush” China and India over Russia and Ukraine, according to Brookings Institution’s Michael O’Hanlon. China denies Russia has requested military or financial assistance — as Western exits provide economic opportunities for China and India, such as cheaper energy prices.
“They may still be helpful,” the senior fellow and director of foreign policy research said. “The biggest thing we can still do on the sanctions front is to threaten Russian oil and gas exports over the medium term by building up alternative supply and infrastructure and a willingness to pay more for our energy if need be. That agenda can be pursued over time but should be threatened now.”
For William Reinsch, who holds the Scholl Chair in International Business at the Center for Strategic and International Studies, the scope of Biden’s response may be limited by what he can secure in terms of multilateral agreement.
“It’s like pushing on the balloon,” he said. “You squeeze here, you squeeze there, and it gets smaller, but then it just pops out somewhere else. You have to be squeezing everywhere if you want to pop it.”
Biden’s reaction may similarly be guided by Capitol Hill as it has concerning a more generous aid measure and the Russian energy ban. The House Financial Services Committee, for example, is exploring delisting Russian entities from U.S. stock exchanges to prohibiting asset managers, investment advisers, broker-dealers, and private funds from pouring money into Russian or Belarusian securities.
The private sector could carry on being a valuable partner too, Reinsch said. He suggested encouraging more shipping companies to introduce their own embargoes.
But Biden has to assess whether “the juice” is worth “the squeeze,” Reinsch added. There is a risk that Russia retaliates and cuts U.S. access, for example, to critical mineral resources, such as nickel, palladium, titanium, and uranium.
Ukrainian President Volodymyr Zelensky this week evoked Martin Luther King Jr. when he addressed a joint session of Congress, telling lawmakers he had “a need” rather than “a dream.”
“Ukraine is grateful to the United States for its overwhelming support,” he said. “However, I call on you to do more.”
Two days before, White House press secretary Jen Psaki had been questioned on Biden’s sanction arsenal, particularly since he has rejected the ideas of sending U.S. troops, helping to deploy Soviet fighter jets, and enforcing a no-fly zone.
“What about the argument that there just aren’t any more severe consequences for you to use because most of the severe ones you’ve ruled out?” one reporter asked.
The next day, Psaki was more defiant, touting “the unprecedented costs” the United States has already levied on Russia. U.S. actions, in concert with allies, had “reversed 30 years of economic progress,” she said, including by curtailing Russian civilian and military purchases of U.S. goods and services, most notably high-tech imports, as well as punishing elites, proxies, and oligarchs.
“That is just the beginning,” Psaki pledged. “The president has rallied the global community to put in place a greater set of financial sanctions package than has ever been done for any economy in the world.”
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As for China and India, Psaki counseled leaders to “think about where you want to stand when the history books are written [about] this moment in time.”
