The world’s biggest companies “have a choice to make” whether to do business in Russia
Wally Adeyemo, the US Deputy Treasury Secretary, said firms could “choose to help Russia” in its invasion of Ukraine or “continue to do business with the 30 countries” that have imposed sanctions.
He said Ukraine’s allies were committed to issuing more sanctions.
He also warned Russian oligarchs “we’re going to come for your resources”.
Since Vladimir Putin ordered Russian troops to invade Ukraine, many Western companies have responded by closing down their operations or withdrawing their services from Russia.
Sanctions imposed by Western countries have made trading difficult or impossible for some firms, while many others have decided to leave Russian markets for moral reasons.
However, some well-known brands, such as Marks & Spencer and Burger King, continue to do business in Russia and have no power to leave due to their brands being run by franchisees in the country.
Mr Adeyemo, who is leading the Biden administration’s sanction efforts, spoke to the BBC on a visit to Europe to coordinate the next phase of sanctions against Russia.
Asked about Chinese and Indian firms filling gaps left by western companies in Russia, Mr Adeyemo said the US would “take action against” anyone helping Moscow evade sanctions.
“For these countries, for these companies, for these individuals, they have a choice to make. They can choose to help Russia support their illegal illegitimate invasion of Ukraine, or they can continue to do business with the 30 countries that have joined in taking actions against Russia,” he said.
The US politician said it was clear that the US dollar, euro and pound were the backbone of the global financial system and anyone wanting to work in those currencies had to “participate in our sanctions”.
After an initial slump to record lows, the Russian currency has recovered most of its losses in the aftermath of the invasion.
Key to the original drop was the unprecedented sanctioning of Russia’s central bank, which limited the ability of President Putin to use its war chest of foreign exchange reserves to defend the currency.
However, flows of euros and sterling to fund purchases of Russian oil and gas have continued during the war, helping stabilise the currency.
Russia is the European Union’s biggest oil trading partner and one of the world’s largest oil exporters.
Though the US and Canada have banned Russian oil imports, countries in the EU have not, due to being heavily reliant on it.
The UK has said it plans to phase out Russian oil by the end of the year.
‘No longer filling war chest’
But Mr Adeyemo said the money Russia is “taking in today is no longer filling in the war chest”.
“They’re using that money to buy roubles to prop up their economy,” he added.
The Russian government has ordered exporters to convert any foreign currency they receive into roubles to support the economy, he said.
“That’s money they can’t use to go and support the war effort,” he added. “So ultimately, our goal here is to make sure that we’re forcing the Kremlin to make choices between supporting their domestic economy and their domestic needs, rather than being able to support the war.”
Mr Adeyemo reiterated that stopping the war was the aim of Western sanctions, and that “regime change” was not a US policy in Russia or anywhere else.