Biden Cuts Off Russia from International Financing Over Ukraine Action

U.S. President Joe Biden cut off the Russian government from international financing on Tuesday and imposed sanctions on two large banks, declaring that its movement of troops into eastern Ukraine was “a flagrant violation of international law.” 

In a brief White House speech to the American public, Biden said Russian President Vladimir Putin’s order late Monday to send troops across the eastern Ukraine border into the Luhansk and Donetsk regions was “the beginning of a Russian invasion of Ukraine.” Hours earlier, Putin had declared the regions as independent, no longer part of Ukraine. 

Biden pointedly asked, “Who in the Lord’s name does Putin think gives him the right to declare new so-called countries on territory that belonged to his neighbors?” 

The U.S. leader said his sanctions would cut off the Russia government “from raising money from the West,” and vowed that Russia “will pay an even steeper price (with more sanctions) if its forces advance further” west into Ukraine. 

He said the United States has no intention of “fighting Russia.” But he said that “none of us should be fooled, none of us will be fooled” by Putin’s intentions in deploying what he characterized as “peacekeeping forces” into the one-time Soviet republic, which has been independent since 1991. 

On Monday, in a Kremlin speech, Putin declared that Ukraine was never an independent state and belonged as part of a greater Russian sphere of influence, not a “puppet” of the West. 

“He directly attacked Ukraine’s right to exist,” Biden said of Putin, while adding there is “still time to avert the worst-case scenario” of a full-scale invasion, through diplomatic settlement of the crisis. 

But, Biden concluded, “We’re going to judge Russia by its actions, not its words.”  

Biden warned Americans, “Defending freedom will have costs,” with higher gasoline prices as world oil prices surge with the threat of further violence in Ukraine and an expanded Russian invasion. 

Biden’s implementation of long-promised sanctions came as other Western allies quickly moved Tuesday to punish Russia with sanctions of their own.     

German Chancellor Olaf Scholz halted authorization for Nord Stream 2, the completed but not yet operational natural gas pipeline under the Baltic Sea from Russia to Germany, at least temporarily curbing potential fuel deliveries to Germany but also depriving Moscow of revenue from the pipeline.   

British Prime Minister Boris Johnson told Parliament he had sanctioned five Russian banks and three “high net worth” executives, freezing their assets in Britain and cutting off financial transactions with them.   

“This is the first tranche, the first barrage, of what we are prepared to do,” Johnson said.   

Russian lawmakers on Tuesday gave Putin permission to use military force outside the country, possibly presaging a broader attack on Ukraine.  

European Union foreign policy chief Josep Borrell said that “Russian troops are on Ukrainian soil” in Donetsk and Luhansk but that it was not a “fully fledged invasion.”   

For weeks, the U.S. and European allies have warned of swift and severe consequences for Russia if it launched an invasion of Ukraine, a possibility viewed with growing concern as Russia deployed 150,000 troops and military equipment along its border with Ukraine and in Belarus, a Russian ally to the north of Ukraine.      

Russian tanks entered eastern Ukraine’s Donbas region overnight, Western diplomats and residents in Donetsk confirmed to VOA.  It was unclear if their presence constituted significant movement of Russian forces or instead movement of Russian-backed militias already in eastern Ukraine.  

Biden issued an initial set of sanctions Monday in response to Putin’s recognition of the breakaway regions and his order to deploy what he called Russian peacekeeping forces.      

 A senior Biden administration official told reporters that the first round of sanctions was specifically tied to those actions and did not represent the “swift and severe economic measures we have been preparing in coordination with allies and partners should Russia further invade Ukraine.”      

Biden’s Monday order prohibited new investment, trade and financing by Americans in Luhansk and Donetsk after Putin declared them independent from Ukraine.   

From a desk at the Kremlin, Putin delivered a nearly hourlong televised address to the Russian people Monday, outlining his version of the history of national boundaries in Europe and the 1990s breakup of the Soviet Union.     

Putin also said there was “no prospect” for peace to end the fighting in eastern Ukraine, but Moscow has contended it has no plans to launch a full-scale invasion of Ukraine.     

“This wasn’t a speech just about Russia’s security,” a senior U.S. administration official said. “It was an attack on the very idea of a sovereign and independent Ukraine. He (Putin) made clear that he views Ukraine historically as part of Russia. And he made a number of false claims about Ukraine that seemed designed to excuse possible military action. This was a speech to the Russian people to justify war.”        

The official would not say whether plans were still on for Secretary of State Antony Blinken to meet with his Russian counterpart, Sergey Lavrov, later this week. That meeting was intended to set the scene for a possible summit between Putin and Biden, with the United States saying both were predicated on Russia not invading Ukraine.      

“We’ll continue to pursue diplomacy until the tanks roll,” the official said. “We are under no illusions about what is likely to come next. And we’re prepared to respond decisively when it does.”        

Russian Foreign Ministry spokeswoman Maria Zakharova said Tuesday the Russian side was still “ready for negotiations.” 

 
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