Russian industry targeted, not consumers, if Biden export curbs imposed

Reuters (Reuters) – As a result of the Russian invasion of Ukraine, the Biden administration intends to spare everyday Russians from the brunt of export controls, according to a White House official. If Russia invades Ukraine, the administration plans to target industrial sectors rather than everyday Russians, the official said.

In a separate address on Friday, a senior Commerce official stated that “key individuals” will also face “significant consequences.”

The comments reduce the scope of potential curbs on imports into Russia, which had previously been regarded as having a broader impact on the Russian economy, including industrial sectors as well as consumer technologies such as cellphones, among other things.

During a virtual speech for the Massachusetts Export Center on Thursday that received little media coverage, White House national security official Peter Harrell said, “We can’t preview every action, but the intent there really is to have measures that we believe will degrade Russia’s industrial capabilities and industrial production capacity over time, not to go after individual, everyday Russian consumers.”

Deputy National Security Advisor Richard Harrell stated that the United States was prepared to impose “crippling financial costs on major Russian financial institutions as well as a range of quite sweeping export controls that will degrade Russian industrial capacity over the medium and long term” if Russia invaded Ukraine.

“We are considering large sanctions targeting key individuals and businesses,” said Thea Kendler, a Commerce Department official who spoke to the export gathering on Friday. “We were not considering massive sanctions targeting key individuals and industries in 2014.” In the same year, Russia attacked and occupied Crimea from the Ukrainian government.

The president of the United States, Joe Biden, stated three days ago that if Russian President Vladimir Putin sent troops into Ukraine, he would consider imposing personal sanctions on him. https://www.reuters.com/news/world/europe/us-seeks-protect-europe’s-energy-supplies-if-russia-invades-ukraine-2022-01-25

Harrell expressed his wish that the hundreds of hours he and his colleagues had worked over the last couple of months devising measures would never see the light of day, but he also stated that they are prepared to enforce the sweeping measures if they are necessary.

Financial sanctions against large Russian financial firms are part of a two-pronged campaign that includes “The goal is to cause capital flight, inflation, and to force the Russian central bank to issue bailouts to its banks… in order for Putin to face the consequences from day one,” Harrell explained.

However, while export restriction measures are expected to be unveiled as part of the package, they are unlikely to have the same immediate impact and are more likely to “degrade Russia’s ability to have industrial production in a few of crucial sectors.”

Despite the fact that Harrell did not specify which industries were involved, other White House officials have highlighted aviation, marine, robotics, artificial intelligence, quantum computing, and defence.

It was revealed on Thursday by a source acquainted with the situation that the focus would be on vital areas that were important to Russian leadership. When asked about Russia’s wealthy oil and gas industry, the individual stated that nothing was off the table.

According to a follow-up response from White House spokesman Emily Horne, none of the possibilities had been ruled out completely.

According to Horne, “We and our allies are prepared to respond quickly to a Russian invasion as well as in waves in the aftermath,” including a complete range of high-impact sanctions and export controls.

In his statement, Harrell stated that he anticipated the European Union to participate in the effort. “On the basis of the discussions I’ve had with individuals far above me… we are fairly certain that, if Russia does invade Ukraine, we will have a very high degree of alignment with the rest of Europe.”

According to sources, the United States may also impose a restriction to prevent foreign companies from exporting products such as semiconductors built with U.S. technology to Russia, similar to what it did to restrict global chip supplies to China’s Huawei, which it considers a threat.

According to a person familiar with the situation, U.S. officials are also in discussions with officials from Taiwan and South Korea, which are home to significant chip producers, as well as countries in Southeast Asia, where some packaging is done.

(Karen Freifeld contributed reporting, with additional reporting from Alexandra Alper in Washington, and editing by Chris Sanders, Grant McCool, and William Mallard.)