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The Russian government has been cut off from western financing as the US and its allies impose a first tranche of sanctions against Moscow following its military advances into Ukraine, President Joe Biden said on Tuesday.
The “beginning” of the Russian invasion demanded a firm international response to impose tough initial costs that can be ramped up as Moscow pushes further into Ukraine, Mr Biden said.
“We still believe that Russia is poised to go much further in launching a massive military attack against Ukraine … We will continue to escalate sanctions if Russia escalates," he said at the White House.
Moscow can “no longer raise money from the West and cannot trade in its new debt on our markets or new European markets", he added. “We've cut off Russia's government from western financing."
He said the move had been closely co-ordinated with US allies and partners.
The US Treasury said the sanctions would target the Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB), along with 42 of their subsidiaries.
"These sanctions ensure VEB and PSB can no longer do business in the United States and are cut off from the US financial system," Treasury said in a statement.
Mr Biden also promised to enact sanctions on the Russian elite and their family members starting on Wednesday and vowed to mitigate any impact the sanctions could have on rising petrol prices in the US.
“We're executing the plan in co-ordination with major oil-producing consumers and producers towards a collective investment to secure stability in global energy supplies. This will blunt gas prices," said Mr Biden, who has come under attack in the US for rising gasoline prices.
Prior to unveiling the sanctions, Mr Biden met Ukrainian Foreign Minister Dmytro Kuleba to "update him on the US response to Russia’s action," the White House said.
In its designations of individuals, the US sanctions target the director of Russian Federal Security Service (FSB) Aleksandrovich Bortnikov; his son Denis; the chairman of PSB, Petr Mikhailovich Fradkov; the first deputy chief of staff of the presidential office, Sergei Vladilenovich Kiriyenko; and his son Vladimir Kiriyenko.
"No Russian financial institution is safe if the invasion proceeds," said Daleep Singh, the deputy US national security adviser for international economics.
Mr Biden also pledged to continue sending defensive military equipment to Ukraine. In addition, he authorised the transfer of US troops and equipment already stationed in Europe to Estonia, Latvia and Lithuania.
“Let me be clear: these are totally defensive moves on our part,” said Mr Biden.
“We have no intention of fighting Russia. ... We want to send an unmistakable message though, that the United States, together with our allies, will defend every inch of Nato territory and abide by the commitments we made to Nato.”
The president nonetheless stressed “there's still time to avert the worst case scenario that will bring untold suffering to millions of people” if Russia proceeds with its plans.
Mr Biden's comments came after the White House on Tuesday began referring to Russian troop deployments in eastern Ukraine as an “invasion”, paving the way for tough sanctions.
This is the beginning of an invasion,” US deputy national security adviser Jon Finer told CNN.
"The unambiguous language signalled a shift in US tone from Monday, when the White House shied away from using the word “invasion".
Members of Congress from both parties criticised the earlier equivocation following President Vladimir Putin’s order for Russian troops to deploy in Donetsk and Luhansk, two Kremlin-backed separatist areas of Ukraine.
Europe and the UK on Tuesday began announcing sanctions on Russia. Germany halted the opening of the Nord Stream 2 gas pipeline in response to Russia’s escalation.
The US had already imposed limited sanctions on the two Russian-backed areas in eastern Ukraine’s Donbas region that were earlier recognised as independent by Mr Putin.
Western allies have condemned Mr Putin’s move into Ukraine as a breach of the pro-western country's territorial integrity.
In a speech accusing the West of turning Ukraine into an anti-Russian bastion, Mr Putin said he was granting recognition of independence to the self-declared Donetsk and Lugansk enclaves.
Mr Putin then tasked the Russian military with “peacekeeping” in the region, although no detail was given as to what this meant in terms of troop movements.
The order will “provide authority to impose sanctions on any person determined to operate in those areas of Ukraine”, Ms Psaki added.
The measures are separate from the wider sanctions announced on Tuesday.
The two self-proclaimed republics already have extremely limited dealings with US citizens.
On Friday, the deputy US national security adviser for international economics, Daleep Singh, said the full set of sanctions under preparation would turn Russia into an international “pariah”.
Agencies contributed to this report.