U.S. Treasury’s Adeyemo lays out plan to starve Russia’s ‘war machine’

By David Lawder

WASHINGTON (Reuters) – The United States is ramping up sanctions against Russia to deprive Moscow’s “war machine” of money and components needed to sustain its invasion of Ukraine, but curbing Russian energy exports will take time, U.S. Deputy Treasury Secretary Wally Adeyemo told Reuters on Thursday.

Adeyemo said in an interview that the United States and its allies have “a lot more that we can and we will do” to punish Moscow if Russia fails to halt its invasion.

A new investment ban announced on Wednesday by President Joe Biden means that Americans will be forbidden from investing in Russian firms’ equity and debt and investment funds, cutting off Russia’s defense industry and other sectors from the world’s biggest source of investment capital, Adeyemo said.

“What this means is that Russia will be deprived of the capital it needs to build up its economy, but also to invest in its war machine,” Adeyemo said.

Adeyemo said the United States and its European allies have committed to target Russian military supply chains to deny access to key components – “things that are important to building their tanks, to supplying missiles and making sure that they have fewer resources” to fight the war in Ukraine but also to project power in the future.

“I think the impact will be immediate in the same way the impact on the economy has been immediate,” from prior sanctions, Adeyemo said.

He declined to say whether a new list of sanctions on Russian state-owned enterprises expected on Thursday will include suppliers of components to the defense industry.

(Reporting by David Lawder; Editing by Paul Simao)