Russia-Ukraine crisis: What are America’s options against Putin?

Publicly, the United States and European allies have promised to affect Russia economically as never before if Putin rolls his forces into Ukraine. Leaders have given the public some tough details, however, arguing that it is best to let Putin guess himself.

And in weeks of negotiations, it is unclear whether the US and Europeans have succeeded in achieving a consensus about which sanctions will be imposed, and what will trigger them.

A look at some of the financial actions under consideration:

Swift Vengeance

For the US and its European allies, pulling Russia out of the SWIFT financial system, which handles bank-to-bank shuffles around the world, will be one of the most difficult financial moves, which will hit Russia’s economy both immediately and in the long term. Can damage. The move could cut Russia from most international financial transactions, including international profits from oil and gas production, which account for more than 40% of the country’s revenue.

Allies on both sides of the Atlantic also considered the Swift option in 2014, when Russia invaded Ukraine’s Crimea and backed separatist forces in eastern Ukraine. Russia then declared that pulling it out of Swift would amount to a declaration of war. The Allies – criticized for giving a too weak response to Russia’s 2014 aggression – put the idea on the backburner.

Since then Russia has attempted to develop its own financial transfer system, with limited success.

The US has been successful before in persuading the SWIFT system to kick out one country – Iran over its nuclear program.

But taking Russia out of SWIFT will also hurt other economies, including the US and key ally Germany. US lawmakers said last week the Biden administration was still analyzing how bad the impact would be. German Foreign Minister Annalena Berbock expressed doubts when asked by journalists about the proposed Russian SWIFT ban.

“The hardest stick won’t always be the wisest sword,” said Barbock.

dollar clearing

The United States already has one of the most powerful financial weapons against Putin if it invades Ukraine – preventing Russia from access to the US dollar.

Dollars still dominate financial transactions around the world, with trillions of dollars in play every day.

Transactions in US dollars are eventually cleared through the Federal Reserve or US financial institutions. Crucially for Putin, this means that foreign banks should be able to access the US financial system to settle dollar transactions.

The ability to block that access gives the United States the potential to inflict financial pain beyond its borders. Earlier, the US has suspended financial institutions from clearing dollars for allegedly violating sanctions against Iran, Sudan and other countries.

Biden indicated to reporters that cutting Russia and Russia’s ability to negotiate in dollars was one of the options the US was studying. Unlike the SWIFT option and other financial measures, this is a measure the US can take on its own. Many Russians and Russian companies would be hesitant to conduct even the most routine transactions, such as making payroll or buying things, because they would not have access to the US banking system.

export control

White House press secretary Jen Psaki has confirmed that the US is considering imposing export controls – potentially cutting Russia off from the high-tech that helps warplanes and passenger jets fly and smartphones smarter. builds, as well as other software and advanced electronic gear that make up the modern world race.

Officials said this could include placing Russia in the most restrictive group of countries for export control purposes, along with Cuba, Iran, North Korea and Syria.

This would mean that Russia’s ability to acquire integrated circuits and integrated circuit products would be severely restricted, due to the global dominance of US software, technology and equipment. It can affect aircraft avionics, machine tools, smartphones, game consoles, tablets and TVs.

Such sanctions could also target important Russian industry, including its defense and civil aviation sectors, which would stifle Russia’s high-tech ambitions, whether in artificial intelligence or quantum computing.

Like some of the other penalties under consideration, US export sanctions will run the risk of prompting businesses to seek alternatives in other countries, including China.

bond market

The Biden administration last year limited Russia’s ability to borrow money by prohibiting US financial institutions from buying Russian government bonds directly from government institutions. But the sanctions did not target the secondary market, leaving it as a possible next step.

Nordstream 2 Natural Gas Pipeline:

Republicans and Democrats in Congress fought Russia’s new Nord Stream 2 natural gas pipeline in Germany for years, arguing that it would help Russia use its control of gas supplies to achieve its policy goals in Europe. Will do Rival bills in Congress would approve the pipeline’s operators – Republicans want to impose sanctions immediately, but Democrats only if Russia invades Ukraine.

The Biden administration had previously withheld sanctions of that level to avoid crossroads with ally Germany.

German officials say blocking the pipeline’s operation if Russia moves to Ukraine would be “on the table” if an invasion occurs – but that’s as far as they’ve gone public.

Going after the oligarchs… and a reported girlfriend

One of the most used sanctions tactics by the US is sanctioning immediate circles of leaders, their families, and military and civilian circles. Russia’s powerful business oligarchs and its banks, as well as Putin and his friends and family, could face it.

The sweeping legislation by Indiana Republican Rep. Jim Banks, co-sponsored by nearly 40 other House Republicans, would pile on sanctions even before any Russian invasion of Ukraine, from swift cutoffs to Nord Stream penalties.

They would also urge to consider targeting a number of people in Russia’s upper echelons with sanctions.

It includes Putin’s family and a woman who is said to be Putin’s romantic interest, Alina Kabaeva, who won Olympic gold as a gymnast in 2004.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.