Expect more sanctions on Russia and export controls, says senior US official

Russia will likely be the target of even more US sanctions and export controls in response to its invasion of Ukraine, a senior Commerce Department official said.

U.S. agencies are considering adding more restrictions on business dealings with Russia, rather than just focusing on enforcing the sanctions and controls already in place, Matthew Axelrod, a senior bureau official, said on Tuesday. Industry and Security Department of Commerce, at the WSJ Risk & Compliance Forum.

“I think you’re going to continue to see additional sanctions and export controls rolling out,” Axelrod said. “It’s not like we’ve done everything we’re going to do.”

The United States and its allies have imposed a formidable list of sanctions and other measures on Russia in response to the country’s recent invasion of Ukraine, significantly complicating the country’s efforts to engage with the international community. business and finance.

Mr. Axelrod works to enforce US export laws, which the government uses to keep sensitive goods and technology out of the hands of hostile powers. The restrictions complement US sanctions that block the movement of money.

Sanctions can have immediate “bite”, while export controls cause shortages and other problems that worsen over time, Axelrod said. Some Russian tank and chip factories, for example, were recently forced to halt production due to shortages caused by export controls, he said.

The onslaught of US export controls has targeted a range of industries. For example, on Monday the United States announced new controls on a range of relatively low-tech products – from saw blades to wood panels and air conditioner parts – that cannot be exported to Russia without a license, a decision intended to disrupt a band. of the Russian economy.

Export controls are “unprecedented in scope, but they are also unprecedented in another way, and that is multilateral international coordination,” Axelrod said.

He added that countries are working to ensure they coordinate not only the controls that are imposed, but also the sharing of information to help with enforcement.

So far, the Commerce Department has not seen significant evidence of evasion, Axelrod said. Companies in countries that have not imposed their own sanctions regimes, including China, have also not moved to fill the void left by the absence of American products, he said.

“Companies are rightly concerned about the impact they would have if they violated our controls,” he said.

The consequences of the harsh economic sanctions against Russia are already being felt around the world. The WSJ’s Greg Ip joins other experts in explaining the significance of what has happened so far and how the conflict could transform the global economy. Photo illustration: Alexandre Hotz

Write to Richard Vanderford at [email protected].com

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