The Biden administration is attempting to keep up the pressure on sanctions while preventing a global economic catastrophe. Bloomberg has revealed that the White House is privately asking US banks to work with Russia.
According to individuals familiar with the situation, the Biden administration is secretly advising major US banks like JPMorgan Chase and Citigroup to keep doing business with strategic Russian companies in spite of the sanctions placed on Moscow due to the crisis in Ukraine.
The US Treasury and State Departments have made the requests in an effort to keep up the pressure on Russia while also averting “a global economic catastrophe,” the news agency said on Monday.
According to the sources, Washington has requested services such as US dollar settlements, money transfers, and trade finance for Russian enterprises that are immune from certain components of the sanctions, such as gas giant Gazprom and fertilizer makers Uralkali and PhosAgro.
As a consequence, the nation’s top banks are today “caught in the push-pull” between the Biden administration and Congress, which pushes on tougher sanctions against Moscow.
With violators subject to multibillion-dollar penalties, the sanctions forbid US institutions from offering services to businesses and individuals on the blacklist.
At a congressional hearing in September, Jamie Dimon, the CEO of the investment firm JPMorgan Chase, is said to have been interrogated about how his organization allegedly used legal loopholes to continue doing business with Russia. “We are following the instructions of the American government as they asked us to do it,” the banker retorted.
When questioned about the subject by Bloomberg, a Treasury spokesperson stated that the department had informed banks that operations related to agriculture, energy, and humanitarian aid were permitted.
“Congress needs to understand this – the US government has not imposed a comprehensive embargo with Russia, there’s still pockets of business that are allowed,” said Nnedinma Ifudu Nweke, an attorney specialized in US economic sanctions at Akin Gump Strauss Hauer & Feld LLP.
The Treasury “will continue to have meetings to educate banks on those pockets of allowable transactions, especially in the humanitarian space,” Nweke added.