US sanctions Gazprombank, 50 Russian banks & 15 officials over Ukraine war

The US sanctioned Gazprombank, a major Russian financial institution, ramping up its economic campaign against President Vladimir Putin’s war effort in Ukraine as President Joe Biden prepares to leave office. 

The Biden administration had previously decided not to levy sanctions against the bank for fear of roiling global energy markets. But the US has been looking to do whatever it can to cripple Russia and boost Ukraine in anticipation of President-elect Donald Trump’s expected push for the two sides to negotiate a cease-fire. 

“Today’s sanctions targeting Russia’s largest remaining non-designated bank, as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine,” Treasury Secretary Janet Yellen said in a statement. “This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military.” 

Some 50 Russian banks with connections to the global financial system were also sanctioned Thursday, along with about 15 officials, the US Treasury Department’s Office of Foreign Assets Control said in a statement. 

Trump’s return to the White House in January and his pledge to end the war in short order has created a new sense of urgency among Western allies to strengthen Ukraine’s hand ahead of any talks. The Kremlin said on Wednesday it’s prepared to discuss a potential cease-fire in Ukraine with Trump, an overture that met with immediate skepticism from Western officials.  

At the same time, Russia has intensified their bombardment of Ukraine in recent days and previous rounds of sanctions haven’t kept it from inflicting heavy losses in the last two and a half years. 

Gazprombank is accused of helping Russia to pay for military equipment and materiel for the war in Ukraine. It has also allegedly paid the salaries of Russian soldiers, including combat bonuses, and helped to compensate families of Russian soldiers who have been killed in the fighting.  

Several other countries, including Australia, Canada, New Zealand and the United Kingdom, have previously sanctioned Gazprombank. 

The US had held off sanctioning Gazprombank to make it possible for countries in Europe to pay for Russian gas. But the need for that exception waned as European nations reduced their dependence on Russian supplies. 

Gazprombank has been handling payments for gas from remaining European customers of Gazprom PJSC since 2022. Putin then forced the gas buyers to switch to rubles and open special ruble and foreign-currency accounts at Gazprombank, which was authorised to handle payments for the fuel. Some buyers refused and were cut off from supply, others obliged.  

It’s not immediately clear if the sanctions could prevent payments for gas by the customers still receiving the fuel from Moscow.