US escalates Russia sanctions, bans new investments, blacklists Putin's daughters

By Michael Hernandez

WASHINGTON (AA) - The US announced a major escalation in its economic sanctions against Russia on Wednesday, targeting a wide swathe of the Russian economy and blacklisting family members of senior officials.

That includes sanctioning Russian President Vladimir Putin's two known daughters, Katerina Tikhonovna and Maria Vorontsova, as well as Russian Foreign Minister Sergey Lavrov's wife and daughter, a senior administration official told reporters.

Former Russian President and Prime Minister Dmitry Medvedev and Prime Minister Mikhail Mishustin, who are members of Russia's Security Council, are also being sanctioned.

"These individuals have enriched themselves at the expense of the Russian people," the White House said in a statement.

In addition, President Joe Biden is set to sign a new executive order banning all new investments in Russia by Americans in a bid to further isolate Russia from the global economic system.

And the US is imposing full blocking sanctions on the majority state-owned Sberbank, Russia's largest financial institution, as well as its largest private bank, Alfa Bank.

The latest tranche of economic penalties come in the wake of Russia's continued assault on Ukraine, which the US and its allies warned ahead of the war would be met with unprecedented levels of sanctions.

Russia's economy is in the midst of a dramatic shock with the Institute of International Finance estimating that it will lose 15 years of economic gains by the end of 2023 with a 15% contraction expected in 2022 alone.

The official who briefed reporters said Russia would fall out of the world's top 20 economies this year after having been the eleventh largest.

"They simply weren't prepared for their economic fortress to crumble and that's what's happened," the official about Russian officials who defied western and allied warnings to pursue the war in Ukraine.

The actions announced by the US are being taken in tandem with the G7 group of economic powers, and the EU.

The Justice Department also announced a criminal indictment against Russian oligarch Konstantin Malofeyev, accusing him of sanctions violations.

Attorney General Merrick Garland said Malofeyev was one of the main sources of financing for Russians promoting separatism in Crimea and has provided material support for the self-claimed Donetsk People's Republic in eastern Ukraine.

"After being sanctioned by the United States, Malofeyev attempted to evade the sanctions by using co-conspirators to surreptitiously acquire and run media outlets across Europe," Garland said at a news conference.

*Servet Gunerigok contributed to this article