US imposing 'swift and severe costs' on Russia following Putin's Ukraine annexation

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(CNN) — The US is imposing what it describes as "swift and severe costs" on Russia, including sanctions on a figure the Biden administration says is key to Russia's economy, after President Vladimir Putin announced the annexation of regions of Ukraine following what the West casts as "sham referenda."

Putin signed documents on Friday to formally begin the process of annexing four regions of Ukraine during a ceremony in the Kremlin, a clear violation of international law amid Russia's invasion of Ukraine that began seven months ago.

US officials have been working behind the scenes to coordinate their response with allies over the course of the last several days and deploy it immediately after Putin's official action, people familiar with the process said. The response marks an escalation and expansion of the most sweeping sanctions regime ever to target a major economy, one that has been steadily ramped up throughout the more than seven months since Russia's invasion.

The US, a Biden administration official said, is "targeting additional Russian government officials and leaders, their family members, Russian and Belarusian military officials, and defense procurement networks, including international suppliers supporting Russia's military-industrial complex" through announcements from the Departments of Treasury, Commerce, and State.

The US actions, which include a combination of export controls, visa restrictions and asset freezes, serve as an effort to further clamp down on Russian supply chains -- and the individuals directing the efforts - critical to maintaining the war effort. US officials and their allies have closely monitored real-time Russian efforts to circumvent sanctions already in place to curtail access to critical components for the defense industry, and many of the new targets come from that effort.

That includes sanctions from the Treasury Department on a key player in keeping the Russian economy afloat: Elvira Nabiullina, an economist who has been leading Russia's central bank since 2013.

President Joe Biden sharply condemned Russia's annexation of Ukrainian territory in a statement Friday.

"The United States condemns Russia's fraudulent attempt today to annex sovereign Ukrainian territory. Russia is violating international law, trampling on the United Nations Charter, and showing its contempt for peaceful nations everywhere," Biden said, adding that those actions have "no legitimacy" and will continue to "always honor Ukraine's internationally recognized borders."

He also urged "all members of the international community to reject Russia's illegal attempts at annexation and to stand with the people of Ukraine for as long as it takes."

Secretary of State Antony Blinken said Friday that the "United States unequivocally rejects Russia's fraudulent attempt to change Ukraine's internationally recognized borders."

"We will continue the United States' powerful, coordinated efforts to hold Russia to account, cut Russia's military off from global commerce and severely limit its ability to sustain its aggression and project power," he said.

Putin has spent years building up his defenses, amassing hundreds of billions in foreign currency reserves, bringing much of Russia's industrial base under state control and selling Russia's vast energy resources to the world. US officials grudgingly acknowledge that Nabiullina has done an effective job managing Russia through this initial phase of the sanctions, just as she did in 2014 after Putin's Crimea annexation triggered a much less severe round of sanctions from the West.

This time, Nabiullina has deftly raised interest rates, imposed capital controls, and sought holes and workarounds to float an economy under siege -- an effort that came even as the US and allies took the unprecedented step of targeting the central bank directly with sanctions shortly after the invasion.

"A good central banker can do things to buoy the currency," one senior US official said earlier this year. "They have a very good central banker. We knew that then; we know it now."

Among Biden administration officials, Nabiullina is seen as perhaps the most effective of all of Putin's top lieutenants. US officials view the central bank's efforts as primarily providing surface-based cover for an economy that is in the midst of major atrophy across multiple critical sectors. But those efforts, even as critical supply chains have collapsed, have bolstered Putin's public messaging that the Russian economy is weathering a sweeping sanctions storm.

The US will also impose sanctions on Nabiullina's top deputy at the central bank, as well as Aleksandr Valentinovich Novak, the deputy prime minister US officials view as central to Russian efforts to increase Russian economic output in spite of the sanctions regime.

The US is also placing sanctions on relatives of members of Russia's National Security Council, visa restrictions on Ochur-Suge Mongush for human rights violations, sanctions on 14 international suppliers for Russia's military supply chains, and adding 57 new entities to Commerce's Entity List for export controls, the officials said. In addition, Blinken announced the State Department is imposing visa restrictions "on 910 individuals, including members of the Russian Federation military, Belarusian military officials, and Russia's proxies for violating Ukraine's sovereignty, territorial integrity, and political independence."

Biden's top sanctions officials have intentionally targeted family members of key Russian officials throughout the invasion in an effort to cut off efforts to hide or shield assets from sanctions.

And the US is warning, the official said, that "there will be costs for any individual, entity, or country that provides political or economic support to Russia as a result of its illegal attempts to change the status of Ukrainian territory," including "heightened sanctions and export controls risks" for individuals or entities that do so.

National security adviser Jake Sullivan will join press secretary Karine Jean-Pierre to outline additional details on the new moves later Friday afternoon. Jean-Pierre has previously warned that the US will "rally global opposition to Russia's attempts at annexation, including at the United Nations."

This story was first published on CNN.com, "US imposing 'swift and severe costs' on Russia following Putin's Ukraine annexation"