The Treasury Department has issued a new decree prohibiting money managers from trading in Russian debt or stocks in US secondary markets. The latest round of sanctions comes as Washington attempts to further isolate Moscow in retaliation for its attack on Ukraine.
While a prior round of penalties barred Americans from directly buying Russian assets, the White House allowed trading to continue in secondary markets. With the Treasury’s latest dictate on Monday, that exemption is now closed, though citizens will still be able to hold any previously owned Russian stocks or debt.
“Consistent with our goal to deny Russia the financial resources it needs to continue its brutal war against Ukraine, Treasury has made clear that US persons are prohibited from making new investments in the success of Russia, including through purchases on the secondary market,” a Treasury spokesperson said on Tuesday.
The stepped-up sanctions come amid a flurry of other Western penalties, which President Joe Biden has said are intended to cripple the Russian economy and harm its war effort. During a visit to Lithuania on Tuesday, German Chancellor Olaf Scholz reiterated that stance, voicing hopes the sanctions would inflict long-term damage.
“We have far reaching sanctions now that will set back the Russian economy by decades, that means it will not be able to participate in global economic and technological progress,” he said. “We know from reports that this means that Russia will not even be able to retain its military capacities at the same level.”
The sanctions campaign has taken some toll on Moscow, though may not be having the intended effect, as embargos on Russian energy and other exports are creating the conditions for major international shortages felt throughout the West. The ruble, meanwhile, is now the best performing currency against the dollar in 2022, propped up by capital controls after briefly tumbling. Loath to sever closer economic and security ties with Russia, both India and China have resisted demands to impose penalties of their own, helping to make up for some of the lost trade with the US and Europe.