President Joe Biden has taken a significant step in targeting Russian support for its defense industry by signing an executive order (EO) providing the US Treasury Department the authority to sanction financial institutions facilitating Russia's efforts to strengthen its military capabilities.

According to the Associated Press, this move is part of the ongoing efforts to impede Russia's attempts to replenish its depleted military arsenal after almost 22 months of battling in Ukraine. Based on a US assessment, Russia had already lost more than 13,000 pieces of military equipment, including drones, tanks, and missile systems.

Following a thorough review by US agencies, the EO also aims to enhance existing restrictions on importing diamonds and seafood from Russia.

(Photo : STRINGER/AFP via Getty Images)
TOPSHOT - A man waves the Russian national flag as the members of Wagner group prepare to pull out from the headquarters of the Southern Military District to return to their base in Rostov-on-Don late on June 24, 2023.

New Executive Order Signed by Joe Biden Targets Financial Facilitators of the Defense Industry of Russia

In a statement, the White House said the EO is to make clear to foreign financial institutions that they risk losing access to the US financial system if they facilitate significant transactions relating to Russia's military industrial base. It further noted that the EO also provides authority to broaden US import bans on certain Russian goods. 

The White House said sanctions and export control measures have already been imposed against thousands of entities and individuals, including multinational procurement networks that Russia uses to acquire defense-related products from abroad. 

"To counter evasion of these steps and degrade (Russian President Vladimir) Putin's war machine, the Biden Administration has coordinated with partners to target companies in third countries and has dispatched teams globally to engage directly with foreign governments, companies, and financial institutions to share information and highlight sanctions risks," the White House noted.

"The United States has been clear: those who are supplying goods or processing transactions that materially support Russia's military industrial base are complicit in Russia's brutal violation of Ukraine's sovereignty and territorial integrity," it added.

The executive order aligns with the G7 Leaders' statement on December 6, emphasizing their commitment to further restrict Russia's use of the international financial system for expanding its military industrial base.

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Treasury Department's Statement on the New Executive Order

In a separate statement, the Treasury Department provided additional details on the amendment to the EO, highlighting its authorization to impose sanctions on foreign financial institutions facilitating significant transactions for entities operating in key sectors of the Russian economy supporting the military-industrial base. 

It also covers those facilitating transactions or providing services related to Russia's military-industrial base, including manufacturing inputs and technological materials sought by Russia from foreign sources. 

The amendment allows the Treasury to prohibit the importation of products processed or substantially transformed in third countries, such as Russian seafood and diamond products.

Joe Biden's signing of the EO comes two days after the meeting of Chinese President Xi Jinping and Russian Prime Minister Mikhail Mishustin to further deepen the economic ties between the two countries despite disapproval from the West that promised to support Ukraine in its war with Russia.

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