WASHINGTON — President Joe Biden said Tuesday that Russia has begun “an invasion” of Ukraine, and he announced sweeping sanctions on the major Russian bank VEB and its military bank.
The sanctions will prohibit American financial institutions from processing transactions for VEB and its military bank. This would effectively cut the banks out of transactions involving U.S. dollars, the global reserve currency.
Biden’s announcement came after Russia’s parliament approved President Vladimir Putin’s request on Tuesday to use military force outside the country’s borders, a development that appears designed to authorize a broader attack on Ukraine.
Biden also announced that the United States would implement comprehensive sanctions on Russia’s sovereign debt.
“That means we’ve cut off Russia’s government from Western financing,” Biden said in remarks at the White House. “It can no longer raise money from the West and cannot trade its new debt on our markets. or European markets either.”
In addition to the sanctions on VEB and Russian debt, Biden said in the days ahead he would sanction individual Russians in Putin’s inner circle.
Russian elites and their family members, he said, “share the corrupt gains of the Kremlin’s policies, and so they ought to share in the pain as well.”
Questions remain about precisely what sanctions will be imposed and when they will go into effect. Biden used the term “full blocking sanctions” to describe the action against VEB, but the fine print of the sanctions won’t become clear until it is released by the Treasury Department.
Until Tuesday, Biden had not used the word “invasion” himself to describe the Russian military deployment in the two breakaway regions of eastern Ukraine.
Biden said NATO reinforcements would continue to operate only in a defensive capacity, but that this should not be taken to mean that the alliance will not respond in kind to Putin’s military maneuvers.
“Today, in response to Russia’s admission that it will not withdraw its forces from Belarus, I have authorized additional movements of U.S. forces and equipment already stationed in Europe to strengthen our Baltic Allies, Estonia, Latvia, and Lithuania,” said Biden.
“As Russia contemplates its next move, we have our next move prepared as well,” he said.
Russia is the largest supplier of gas and oil to Europe, so the prospect of a war has rattled markets and driven up the price of gas.
The Dow fell 1.9% last week, and the S&P 500 and Nasdaq Composite slid 1.6% and 1.8%, respectively.
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