Updated Feb 22, 2022 - World

Biden sanctions Russian banks and declares Ukraine invasion has begun

President Biden announced what he called the "first tranche" in a series of stiff sanctions to punish Russia for invading Ukraine, targeting two Russian banks and the country's sovereign debt.

Why it matters: Biden said Russia's recognition of two separatist "republics" in eastern Ukraine and decision to deploy troops there indicated Vladimir Putin was "carving out a big chunk in Ukraine" and "setting up a rationale to go much further."

Details: Biden said two Russian financial institutions, VEB and Russia’s military bank, would be put under sanctions.

  • He also said Russia’s sovereign debt will be sanctioned so Russia "can no longer raise money from the West and cannot trade its new debt on our markets, or European markets either." In a sign of trans-Atlantic coordination, the U.S. sanctions overlapped with those announced from London and Brussels.
  • Biden also announced that sanctions on Russian elites and their family members would be rolled out in the coming days. The initial list includes include Russian spy chief Alexander Bortnikov and his son Denis, deputy presidential chief of staff Sergey Kiriyenko and his son Vladimir, and Promsvyazbank CEO Petr Fradkov.
  • A senior administration official also told reporters that Germany's decision to suspend certification of Nord Stream 2 came after "overnight consultations" between Berlin and Washington, and touted it as a major financial blow to Putin.

What to watch: "No Russian financial institution is safe if this invasion proceeds," the official stressed.

  • "We are ready to press a button to take further action on the very largest Russian financial institutions, including Sberbank and VTB, which collectively hold almost $750 billion in assets — more than half the total in Russia as a whole."
  • The official also said export controls on critical technologies and other steps remain in the U.S. arsenal if Putin further escalates.

What they're saying: “Who in the Lord's name does Putin think gives him the right to declare new so-called countries in territories that belong to his neighbors?” Biden asked in his remarks.

  • Biden also said the U.S. was sending more defense assistance to Ukraine and relocating troops that were already positioned in Europe to NATO's eastern flank, in the Baltic states.
  • The president reiterated that U.S. troops would not be deployed to fight in Ukraine, but warned Americans would feel the consequences of war, including through higher gas prices.

Driving the news: Putin gave his clearest indication yet that Russian troops would launch an invasion further into Ukraine, saying the borders of the separatist "republics" he recognized on Monday extend to territory currently controlled by Ukrainian forces.

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Editor's note: This story has been updated with additional details throughout.

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