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G7 to Increase Financial Pressure on Russia

Police officers patrol the river near the Atomic Bomb Dome as Japan's police beef up security ahead of the Group of Seven nations' meetings in Hiroshima, Japan, May 17, 2023.
Police officers patrol the river near the Atomic Bomb Dome as Japan's police beef up security ahead of the Group of Seven nations' meetings in Hiroshima, Japan, May 17, 2023.

Members of the Group of Seven wealthy democracies will act at this year's G-7 summit to pile more sanctions on Russia and crack down on those helping it evade them — a move aimed at hampering Moscow's ability to fund its war in Ukraine.

Briefing reporters, a Biden administration official, who was not identified by name as is customary, said the group will announce hundreds more sanctions and export controls at this year's meeting in Hiroshima, Japan.

Just the sanctions from the United States would blacklist about 70 Russian and third-country entities involved in Moscow's defense production, the official said, in addition to sanctioning more than 300 individuals, entities, aircraft and vessels. Other G-7 nations are set to announce their actions this week.

The official listed these steps: moves to further disrupt Russia's ability to obtain equipment and supplies for the war effort; work to close sanctions-evasion loopholes; and steps to reduce Europe's reliance on Russian energy. The group will also make more efforts to limit Russian access to the international financial system and commit to keeping Russia's sovereign assets frozen.

G7 To Increase Financial Pressure on Russia
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"Bottom line is: We're upping the economic pressure on Russia," the official said.

The official added that Ukrainian President Volodymyr Zelenskyy would engage with G-7 leaders in "one way, shape or form" in the summit.

G-7 members are the U.S., Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union.

No comprehensive export ban

The group will not announce a comprehensive export ban to Russia, national security adviser Jake Sullivan confirmed to VOA in a press gaggle aboard Air Force One en route to Hiroshima.

"The main focus of sanctions implementation at the summit will be about enforcement and evasion," Sullivan said.

G-7 members, mainly those in Europe, still export around $4.7 billion a month to Russia, about 43% of what they did prior to the invasion of Ukraine, according to research by the Atlantic Council's GeoEconomics Center.

The steps taken by the Biden administration will address some of the four ways the U.S. Treasury says targeted Russians are evading sanctions: by going through family members and close associates, by using real estate to park assets, by using complex structures to mask ownership and by transferring assets to countries that have not sanctioned Russia.

Multilateral sanctions already target more than 4,800 Russian individuals and entities, including Russian President Vladimir Putin, his former wife, the head of the Wagner mercenary group that is sending fighters to Ukraine, the Kremlin spokesman and his family members, and others.

In just over a year since the war began, said Seth Bridge, coordinator of the Treasury's Russian Elites, Proxies, and Oligarchs task force, the group has blocked or frozen more than $58 billion worth of sanctioned Russians' assets.

"Really, an unthinkable amount," he said Thursday in a briefing with reporters.

Kimberly Donovan, director of the Economic Statecraft Initiative at the Atlantic Council's GeoEconomics Center, told VOA that greater enforcement can make a big difference.

"While last year was maybe the year of sanctions, I think this year is the year of enforcement of those sanctions — as well as looking at what additional export controls can be put in place to ensure that Russia is not able to get the military capability and technology it needs to conduct its war," she told VOA.

The majority of sanctions are imposed by the U.S — not by other G-7 members.

The summit starts Friday in Hiroshima.