The world’s biggest companies “must make a choice” between doing business in Russia or in its western allies, a senior US politician has told the BBC.
Wally Adeyemo, the US deputy treasury secretary, said companies could “help Russia’s invasion of Ukraine” or “keep doing business with the 30 countries” that have imposed sanctions.
He said Ukraine’s allies are determined to impose more sanctions.
He also warned the Russian oligarchs: “We will come to take your resources”.
Since Vladimir Putin ordered Russian troops to invade Ukraine, many Western companies have responded by ceasing operations or withdrawing services from Russia.
Sanctions imposed by Western countries have made it difficult or impossible for some companies to trade, while many others have decided to exit Russian markets for moral reasons.
However, some well-known brands such as Marks & Spencer and Burger King continue to operate in Russia and do not have the authority to leave the country as their brands are operated by franchisees in the country.
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Mr Adeyemo, who is leading the Biden administration’s sanctions effort, spoke to the BBC during a visit to Europe to coordinate the next phase of sanctions against Russia.
Asked whether Chinese and Indian firms are filling gaps left by Western companies in Russia, Mr Adeyemo said the US would “tackle anyone” who helps Moscow circumvent sanctions.
“For these countries, for these companies, for these individuals, they have to make a choice. They can choose to help Russia support its illegal, illegitimate invasion of Ukraine, or they can continue doing business with the 30 countries that have joined in taking actions against Russia,” he said.
The US politician said it is clear that the US dollar, euro and pound are the backbone of the global financial system and anyone wishing to trade in these currencies must “participate in our sanctions”.
After an initial plunge to record lows, the Russian currency has recovered most of its post-invasion losses.
Key to the initial decline was the unprecedented sanctions imposed by Russia’s central bank, which curtailed President Putin’s ability to use his war chest of foreign exchange reserves to defend the currency.
However, euro and sterling inflows to finance purchases of Russian oil and gas continued during the war and helped stabilize the currency.
Russia is the European Union’s largest oil trading partner and one of the world’s largest oil exporters.
Although the US and Canada have banned Russian oil imports, countries in the EU have not, as they are heavily dependent on it.
Britain has announced that it will phase out Russian oil by the end of the year.
But Mr Adeyemo said the money Russia is “taking in today no longer fills the war chest”.
“They use this money to buy rubles to support their economy,” he added.
The Russian government has ordered exporters to convert any foreign currency they receive into rubles to support the economy, he said.
“This is money they cannot use to support the war effort,” he added. “So ultimately, our goal here is to ensure that we force the Kremlin to make choices between supporting its domestic economy and its domestic needs, rather than being able to support the war.”
Mr Adeyemo reiterated that ending the war was the goal of Western sanctions and that “regime change” was not US policy in Russia or anywhere else.
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