Russian President Vladimir Putin
New US sanctions have targetted Russian President Vladimir Putin's daughters. Image Credit: Reuters

Washington: White House National Economic Council Director Brian Deese said Wednesday that the administration is announcing a new round of sanctions on Russia, penalties that would target the adult children of Russia President Vladimir Putin and two of the country’s largest banks.

Deese said the new sanctions on Sberbank and Alfa Bank would come with a new US prohibition on all inbound investment in Russia by any Americans, as well as sanctions on several state-owned Russian enterprises, including an aircraft and shipbuilding corporation. The steps are being announced in coordination with the G-7 and European Union. New sanctions will also be imposed on family members of Russian Foreign Minister Sergei Lavrov.

The new announcements come after the White House initially worked to limit the economic fallout from sanctions, seeking first to punish certain Russian banks and top Russian officials. The White House at first opted against cracking down on Russia’s energy exports, worried about what it would do to global costs, but the Biden administration last month did move to ban US purchases of Russian energy. Global energy prices have shot up since Russia’s conflict in Ukraine, adding to inflation and putting more pressure on US consumers.

Wednesday’s announcement shows that White House officials and their allies feel there is more to be done.

Putin has in the past talked about having two daughters, but he stops short of naming them. A 2011 Washington Post article identified them as Maria Vorontsova and Katerina Tikhonova, and they would join a broadening group of Russian elite figures who are cut off from accessing money in many parts of the global banking system.

Vorontsova is a genetics researcher and Tikhonova was once deputy director for the Institute for Mathematical Research of Complex Systems at Moscow State University.

The White House has already levied a range of sanctions and other financial penalties against Russian leaders and businesses as it has sought to punish the country over its war in Ukraine. The sanctions have escalated in recent weeks, and the White House has continued to look for new targets, particularly ones close to top Russian officials.

The Wall Street Journal first reported that the sanctions against Putin’s daughters were coming.

The US and its allies began imposing harsh financial penalties on Russia in late February following the war in Ukraine. The penalties have intensified repeatedly as the Biden administration and leaders in the G-7 and Europe have sought to create steep penalties on the Russian government that stopped short of a broader military conflict.

Russia’s currency initially crashed but it has recently recovered, raising questions about the effectiveness of the global campaign against Russia.

Deese said “the reason for the Ruble rebound is the contorted capital control regime,” which is in turn is “bleeding them of resources.”

Deese, speaking at an event held by the Christian Science Monitor, said a key to the sanctions is that their effectiveness is tied to international coordination. “The impact of sanctions operate across time and . . . they operate by maintaining unanimity”

“Anyone who looks at the Russian economy right now and thinks they’re bouncing back or showing some signs of life is I think missing the forests for the trees,” Deese said. He described Russia as “completely ostracized,” predicting Russia’s economy will contract by between 10 and 15% this year.