US defends sanctions package against Russia as Ukraine war drags on

Bipartisan group of US senators express frustration over atrocities despite Biden administration's sanctions regime

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US President Joe Biden's top sanctions officials on Wednesday defended his administration's penalties against Russia for its war in Ukraine, after senators said Washington had overstated their impact.

Since Russia invaded Ukraine on February 24, the US and dozens of other countries have levied sanctions against Moscow aimed at blocking investment and exports, among other measures.

The sanctions are "unprecedented in their scope and scale", the Treasury Department's assistant secretary Elizabeth Rosenberg told the Senate foreign relations committee.

The State Department has predicted that by 2030 Moscow's economy will be 20 per cent smaller than it would have been if not for Washington's sanctions.

But senators on Wednesday expressed doubt that the administration is doing all it could to support Ukraine and target Russia.

But James Risch, the senior Republican on the committee, said the sanctions were not doing what they are supposed to.

"I travelled to Ukraine and saw first-hand the devastation Russia's war has caused, including acts of terrorism and genocide against Ukrainian people — acts that have not been stopped by our sanctions," Mr Risch said.

The head of the State Department's Office of Sanctions Co-ordination, James O'Brien, who testified alongside Ms Rosenberg, said the Biden administration's approach has helped to lay the pathway to Moscow's failure in Ukraine and beyond.

He highlighted US export controls and financial sanctions, as well as technical support and enforcement on sanctions evasion, as key areas where Washington has made progress in reducing the Russian threat.

"Russia should and will emerge from this war defeated and weakened," Mr O'Brien said.

He said Russia was experiencing "real shortages" in factors including artificial intelligence, chemicals, advanced materials and semiconductors.

"You see Russian military equipment being replaced with commercial grade and old technology," Mr O'Brien said.

"And that's a direct result of the policies that we've put in place … in a way this is a race back in time. We've cut them off from today's technology and they are using older and older technology."

But as the war drags on and evidence mounts of Russian atrocities against Ukrainian civilians, senators pressed the administration on its capacity to fully respond.

Democratic Senator Bob Menendez, chairman of the committee, raised doubts about the administration's record of enforcing sanctions when larger economies, such as China or India, have made purchases with Moscow.

"I haven't seen any action against either one of them," Mr Menendez said.

Those transactions had been allowed under the existing sanctions regime, Mr O'Brien said.

He conceded that part of Washington's broader coalition strategy requires the distribution of some Russian and Ukrainian goods in the global market.

"It's not that we're negligent in enforcing the sanctions," Mr O'Brien said.

"Turkey re-exports 70 per cent of any wheat and grain it gets from Russia and Ukraine to Africa.

"So though that number looks like a lot of trade, it actually is a part of keeping the global coalition in a place where we're able to sustain the support for Ukraine."

Republican Senator Mitt Romney of Utah expressed concerns about the endurance of the Russian economy more than seven months since the invasion.

"I have the same sense … that we have in our own minds overstated the impact of sanctions," Mr Romney said.

"The rouble is actually trading higher than it was before the war … the indication so far, is [the sanction strategy] wasn't as crippling as we thought on Russia."

Ms Rosenberg testified that Moscow's strategies to avoid the worst effects of sanctions are not sustainable as it uses stimulus funds to support its economy.

"We must continue to force them to burn through the entirety of the buffers they have in place," she said.

"It's critical to take the long view here and play a long game. What they're doing is unsustainable."

But congressional leaders warned that "the long game" is doing nothing to save besieged Ukrainians.

"When we're playing the long game, Ukrainians are dying," replied Jeanne Shaheen, Democratic senator from New Hampshire.

Mr O'Brien said that sanctions alone would not end the war, but they played a critical role in weakening Russian President Vladimir Putin.

"What sanctions can do is make it impossible for Russia to take care of its people and pay for its wars at the same time," he said.

"They can let Russian soldiers know that today is worse than yesterday and tomorrow is going to be still worse, and they'll make it impossible for Putin to carry out the imperial project that he's announced, which was not intended to stop just with Ukraine, but to go on."

Updated: September 28, 2022, 8:44 PM