Shortly before the G7 summit in Italy, the USA passed a new package of sanctions. Is this all folklore now? No, say US politicians. Moscow’s military capabilities are to be weakened and the flow of resources and money is to be made more difficult. This time it also affects Chinese companies.
The USA has imposed new sanctions on supporters of the Russian war against Ukraine just in time for the G7 summit. The announcement marked the start of another major effort that the seven democratic industrial nations intend to make to support the attacked country at their three-day summit in southern Italy. The heads of state and government of the countries are meeting this Thursday in the luxury hotel “Borgo Egnazia” in Apulia. In addition to Ukraine, the Gaza war, the difficult trade relations with China and migration are also on the agenda. Guests at the summit include Ukrainian President Volodymyr Selenskyj and, for the first time, the Pope.
The Group of Seven includes the USA, Canada, Japan, Great Britain, France, Germany and Italy, which is hosting and presiding this year. Chancellor Olaf Scholz is travelling for Germany. US President Joe Biden was expected in southern Italy this evening. Council President Charles Michel and Commission President Ursula von der Leyen are attending for the EU.
Because of the attack on Ukraine more than two years ago, the West has already imposed unprecedented sanctions on Russia and its supporters. The US government also announced new sanctions at the start of the G7 summit in Japan last year in order to make it more difficult for Moscow to access goods that are important on the battlefield.
Chinese companies also affected
The new package targets more than 300 individuals and entities that are helping Russia evade sanctions and produce battlefield materials, the US State Department said. These include banks, networks, companies and other targets in Russia and countries such as China, Turkey and the United Arab Emirates. The punitive measures are intended to hit Russia’s remaining procurement channels, including important deliveries from third countries, said US Treasury Secretary Janet Yellen. The Commerce Department also announced that it had added eight addresses in Hong Kong to the sanctions list to punish shell companies. The new sanctions also affect individuals responsible for the abduction and re-education of Ukrainian children.
According to the US Treasury and State Departments, those affected include institutions involved in three liquefied natural gas (LNG) projects, as well as the Moscow Stock Exchange and several subsidiaries. This is expected to complicate transactions worth billions of dollars.
“We are increasing the risk to financial institutions involved in Russia’s war economy, eliminating loopholes and reducing Russia’s ability to benefit from access to foreign technology, equipment, software and IT services,” Yellen said. US Secretary of State Antony Blinken said the United States was concerned about “the scale and diversity” of Chinese exports to Russia that supported Russia’s military industry.
Until now, foreign banks were only punished if they supported the Russian defense industry. The new resolutions are also intended to affect financial institutions that carry out transactions involving sanctioned persons or Russian banks such as VTB or Sberbank. According to the Finance Ministry, the list of those potentially affected has increased from 1,000 to 4,500.
Russia announced a reaction to the new wave of US sanctions. “As always in these cases, Russia will not leave such an aggressive act unanswered,” said Foreign Ministry spokeswoman Maria Zakharova, according to a report by the state news agency TASS. The Moscow Stock Exchange announced that it would stop trading in dollars and euros.
Ukraine can hope for a huge aid package from the G7 summit
Zelenskyj will attend one of the G7 working sessions on Thursday. He can expect commitments during the summit. The group is expected to agree in principle to grant Ukraine new aid of around 50 billion US dollars (around 47 billion euros) as quickly as possible. This is to be done with the help of a loan package that will be financed through interest income from frozen Russian state assets. Ukraine could use the money to strengthen its defense and pay for the reconstruction of destroyed infrastructure. In addition, bottlenecks in the Ukrainian state budget should be made up, an EU official said on Tuesday evening.
The EU states had already decided to use the interest income directly to finance military aid for Ukraine. This year alone, up to three billion euros are expected to be raised. However, the effect could now be significantly increased again through the so-called credit leverage.
According to the Commission, around 210 billion euros of the Russian central bank are frozen in the EU. The Brussels-based financial institution Euroclear recently announced that it had earned around 4.4 billion euros in interest in 2023. It is by far the most important institution in the EU that holds assets of the Russian central bank.
Report: USA wants to supply Ukraine with another Patriot air defense system
According to a media report, US President Biden wants to provide Ukraine with another Patriot air defense system. Biden made the decision last week after a series of meetings with senior advisers, wrote the New York Times, citing unnamed government sources. White House Communications Director John Kirby did not confirm the report when asked. It is conceivable that the US government will make the announcement during the summit.
The US’s new Patriot system is currently in Poland, the New York Times continued. It could be deployed on the Ukrainian front in the coming days. It would be the second Patriot air defense system that the US has made available to Ukraine.
It is one of the most modern in the world. It is used to combat enemy aircraft, ballistic missiles and cruise missiles. The defense missiles can hit targets in an imaginary bell around the position at a distance of around 100 kilometers and at altitudes of up to 30 kilometers – depending on the guided missile used.
The Pope is the guest of honour
Italy’s right-wing Prime Minister Giorgia Meloni welcomes her guests to the luxury resort “Borgo Egnazia”, which has 28 villas and 63 suites or rooms in traditional Apulian style. There are also restaurants, pools, a golf course and a beach club. The Pope will also meet with the heads of state and government there. For the first time ever, a Pope is attending a G7 summit. The head of the Catholic Church is to speak about artificial intelligence. The working session will also focus on Africa and the Mediterranean – and Francis repeatedly calls for solidarity with refugees and migrants who dare to take the dangerous sea route to Europe.
The G7 meeting follows on seamlessly from the two-day reconstruction conference for Ukraine in Berlin. On Saturday, Scholz and Selenskyj will go to the Ukraine peace conference in Switzerland, for which, according to the government in Bern, around 40 heads of state and government have registered so far. Around 160 were invited. A further 40 states are expected to attend with other high-ranking government representatives.