New US sanctions hit one of Russia's richest men Vladimir Potanin

Faced with sweeping international sanctions, there is evidence that economic conditions in Russia are starting to deteriorate

Vladimir Potanin attends a session of the St Petersburg International Economic Forum in Russia in 2019. Reuters
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The US has issued financial sanctions against one of Russia's wealthiest men, Vladimir Potanin, the Treasury and State departments said on Thursday.

The action comes after similar moves were made against Mr Potanin and his network by Britain and Canada, the State Department said.

"Our actions today are a clear message that the United States will not hesitate to continue to use the tools at our disposal to promote an end to, and accountability for, President [Vladimir] Putin’s unconscionable war" in Ukraine, US Secretary of State Antony Blinken said in a statement.

Among those being sanctioned are 29 Russian governors and regional heads as well as two of the leaders' family members. Also being sanctioned is an entity owned by one of the family members.

"These governors oversee and enforce the conscription of citizens in response to Russia’s recent mobilisation order," the Secretary of State said.

Treasury is sanctioning 18 entities related to Russia's financial services sector, while the State Department is designating Mr Potanin, his network and more than 40 more people linked to the government in Moscow.

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Corporate leaders of Russian state-owned companies are also named in the latest addition to Washington's sanctions regime.

The State Department said it is also designating five individuals serving on the board of directors of Russian Railways, including Russian Deputy Prime Ministers Andrey Belousov and Dmitriy Chernyshenko.

“By sanctioning additional major Russian banks, we continue to deepen Russia’s isolation from global markets,” said Brian Nelson, Treasury under secretary for terrorism and financial intelligence .

Faced with sweeping international sanctions since its February invasion of Ukraine, there is some evidence that economic conditions in Russia are starting to deteriorate at a faster rate, a December report from Washington's Congressional Research Service showed.

In November, the Russian central bank estimated a faster economic contraction in the fourth quarter of 2022, at a little more than 7 per cent compared to previous quarters, which sat at about 4 per cent.

Sanctions may be a contributing factor, the report said, "but other factors are likely contributing ... most notably, the war effort itself".

That additional economic strain includes factors such as the mobilisation of civilian production for military purposes, workers drafted into military service and deferred domestic infrastructure projects.

Updated: December 16, 2022, 8:58 AM