Adeyemo embarks on G7 tour to push new sanctions authority

US Treasury Deputy Secretary Wally Adeyemo is visiting three G7 countries to further coordinate sanctions against Russia, including through a new executive authority that allows ‘decisive, surgical action’ against foreign financial institutions that facilitate large transactions in favour of the Kremlin.

As Adeyemo left for his trip, 15 January, Bloomberg reported that state banks in China are tightening curbs on funding to Russian clients in response to the threat of secondary sanctions on overseas financial firms under the new authority.

It cited sources as saying that two Chinese banks had ordered a review of their Russian business in recent weeks, focusing on cross-border deals, and that banks will sever ties with clients on the sanctions list and will stop providing any financial services to the Russian military industry.

On his 15-23 January stops in Rome, Berlin, Frankfurt and Tokyo Adeyemo will work with the G7 partners ‘to degrade Russia’s ability to financially sustain its illegal war in Ukraine, including through President Biden’s new Executive Order targeting sanctions evasion and the continued success of the price cap on Russian oil,’ Treasury said.

Last month President Biden signed an amendment to E.O. 14024, expanding its authority to ‘target foreign financial institutions facilitating significant transactions benefitting Russian military procurement and its domestic wartime production capabilities.’

Treasury said, ‘Russia has increasingly shifted certain trade and financial flows through third countries to evade sanctions and continue its procurement of critical items for wartime production.’ It warned it will continue to use ‘the new tools provided by this authority to take decisive, surgical action.’