Russia prevented from paying its debt with American bank funds

The United States is barring Russia from repaying its debt using funds held in U.S. banks, the U.S. Treasury announced on Tuesday, increasing economic pressure on Moscow over its actions in Ukraine.

The European Commission, meanwhile, proposed new sanctions against Russia, including a ban on buying Russian coal and Russian ships entering EU ports, and said it was also working to ban oil imports.

“Today is the deadline for Russia to make another debt payment,” a U.S. Treasury spokesman said Tuesday. “Effective today, the U.S. Treasury will no longer allow any dollar debt payments from Russian government accounts with U.S. financial institutions.

“Russia must choose between draining precious remaining dollar reserves or new incoming revenue, or defaulting.”

Debt payments had so far been exempt from a near-complete lockdown that separated Russia from the global financial system, and Moscow had made several payments to foreign creditors through major US banks.

The country has also been allowed to receive payments for oil and gas sales, although the United States has banned imports from Russia.

The White House, however, warned on Monday that new sanctions were looming against Russian leader Vladimir Putin following the emergence of alleged atrocities in areas of Ukraine formerly occupied by Russia.

The latest U.S. move “will further drain the resources Putin is using to continue his war against Ukraine and bring more uncertainty and challenges to their financial system,” the Treasury official said in a statement.

In a speech posted on Twitter, European Commission President Ursula von der Leyen presented new sanctions, including a ban on coal imports from Russia worth 4 billion euros a year, and a total ban on transactions on four key Russian banks, including the country’s second. the largest, VTB.

“We are working on additional sanctions, including on oil imports, and we are considering some of the ideas presented by member states, such as taxes or specific payment channels like an escrow account,” von der Leyen said. .

The EU will also ban Russian vessels and vessels operated by Russia from accessing EU ports, although there are exemptions for agricultural and food products, humanitarian aid and energy.

In addition, the bloc will ban Russian and Belarusian road transport operators and prohibit the sale to Russia of quantum computers, advanced semiconductors, sensitive machinery and transport equipment worth around 10 billion euros per year. (AFP, Reuters)

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