“The world” is under sanctions: the US and the EU dealt a new financial blow to Russia

America attacks “Mir”

US President Joe Biden on Friday, February 23, announced the introduction of more than 500 new sanctions measures against Russia. “Today I am announcing more than 500 new sanctions against Russia, targeting the Russian financial sector, defense industry, supply networks, and those who facilitate sanctions evasion,” Biden said in a statement released by the White House.

OFAC (Office of Foreign Assets Control), the division of the US Treasury Department responsible for applying sanctions, announced the introduction of blocking sanctions against the National Payment Card System (NSCP), the operator of Mir cards. “OFAC is targeting Russia’s core financial infrastructure, including the operator of the national payment system Mir, as well as Russian banks, investment firms and financial technology companies,” the agency said in a statement.

The same message mentions 8 more Russian banks against which restrictions have been introduced. OFAC has issued a standard license allowing transactions with these credit institutions until a certain date (April 8, 2024). And then – a ban. Also subject to sanctions was the St. Petersburg Bank, which is the settlement depository of the St. Petersburg Exchange. Note that all of these banks are not among the largest in Russia and, in terms of assets, occupy places from 50th to 150th in various all-Russian ratings.

In addition, the US Department of Commerce also imposed restrictions against 93 companies, 63 of them Russian. The rest are registered in China, Turkey, UAE, Kyrgyzstan, India and South Korea.

The measures against the key Russian card “Mir” did not become a sensation either. financial circles know that back in the fall of 2022, OFAC urged US companies and banks not to enter into agreements with the Russian NSPK in order to avoid the risk of being involved in actions to circumvent US sanctions. At the same time, the NSPK itself was not on the sanctions list at that time, but it was already clear where the “wind was blowing.”

Meanwhile. NSPK has already made a statement that the system will continue to operate as normal within the country and no changes will occur for customers. Foreign banks will independently decide whether to service Russian cards.

Let us remind you that the “World” map was initially created for use exclusively on the territory of Russia. But after Visa and Mastercard announced the suspension of work in the Russian Federation in March 2022, the “domestic” card automatically became an alternative to them. According to the Central Bank, in the first nine months of 2023, the share of transactions using Mir cards amounted to more than half (52.5%) of the total volume of banking transactions in Russia. Over the past two years, the Mir card and its presence abroad have expanded. It operates in Armenia, Belarus, Vietnam, Kazakhstan, Kyrgyzstan and Tajikistan.

By the way, the NSPK emphasized that the system continues to process transactions on cards of international payment systems issued by Russian banks as usual.

Be that as it may, even in America itself they do not really believe in the effectiveness of the new sanctions. “The new anti-Russian sanctions imposed by the administration of US President Joe Biden are unlikely to have a significant negative impact on the Russian economy,” wrote the influential newspaper The Washington Post. The publication notes that two years after the start of the Russian special military operation in Ukraine and subsequent Western sanctions, which, according to Biden, should have dealt a “crushing blow” to the Russian economy, it is expected to grow faster this year than the economies of the USA, Germany, France or Great Britain.

Russia may feel the new American sanctions, as they include secondary restrictions against companies that help our country circumvent previously imposed sanctions. This opinion was expressed by Alexei Zubets, professor at the Financial University under the Government of the Russian Federation, Doctor of Economics. In his opinion, pressure on Russia’s partners abroad is one of the few serious sanctions instruments remaining in the hands of Americans. “However, these measures will not cause critical damage to the Russian economy and financial system,” the professor is confident. “Moreover, the new restrictions will only once again stimulate Russia to develop domestic production.”

In practice, the new sanctions measures mean that companies from India, China, and the Gulf countries selling dual-use goods to Russia will now need to look for new sales channels or build other delivery routes. And in some cases, Russia will have to look for other exporters, the expert warns.

EU unlucky number

The EU Council approved the 13th package of anti-Russian sanctions. Brussels clarified that it will come into force after publication in the official journal of the EU. It was reported that it would also be aimed at Russia’s military-industrial complex, including limiting the country’s access to drone components.

The European Union included 106 individuals and 88 legal entities in the new sanctions package against Russia. Moreover, the Council of the European Union decided that restrictions in the field of import and export controls as part of the 13th package of sanctions against Russia apply to some companies from China, India, Serbia, Kazakhstan, Thailand, Turkey, and Sri Lanka.

According to the European Union, companies from these countries “support the Russian military-industrial complex” and “participate in bypassing trade

The 13th package imposes restrictions on trade in goods and technologies with Russia, the list of which includes more than 70 items. This list, in particular, includes semiconductor devices of various types, electronic integrated circuits, production and testing equipment, including machines and devices, printed circuits, consoles, panels, consoles, and numerically controlled equipment.

A separate section provides for a ban on the sale of cameras, sensors and optical components. It also includes telescopic sights, periscopes, telescopes, thermometers and pyrometers, and thermostats. Restrictive measures apply to a number of items of electromagnetic equipment. Sanctions also apply to electronic devices and modules. And the annex to the EU sanctions regulations includes chemicals, metals, alloys, composites and other modern materials.

Leading expert at the Center for Political Technologies, economist Nikita Maslennikov sees the main danger of the 13th package in the fact that it actually tightens the sanctions compliance regime and attempts to identify those niches that could weaken the effectiveness of pressure over time. “First of all, this concerns electronic components across a wide range, and, naturally, the emphasis is on complicating the work of enterprises in the defense complex,” the economist notes. He considers this evidence of the West’s intentions to continue pressure on Russia on a targeted basis

Maslennikov expresses confidence that the Russian government authorities, which must build a line of defense against sanctions, were ready for the measures of the 13th package and appropriate preventive measures were taken.

It is also important that in its new pact the European Union outlined the direction of pressure on Russia through the extension of sanctions to companies in partner countries. According to Maslennikov, EU authorities are at great risk of deteriorating trade, economic and diplomatic relations with major world players, including China. “And if Chinese business gets a headache because of the Europeans, Beijing, in turn, will not remain silent,” the expert warns.

“No longer having the opportunity to invent something radically new, the West is moving on to a long siege, which, however, may not end in anything,” concludes Nikita Maslennikov.