US places sanctions on Gazprombank executives for first time

The US sought to tighten sanctions on Russia on Sunday by blacklisting a swath of financial executives and restricting the provision of professional services, even as the EU struggled to finalise its latest package of penalties.

The US targeted executives at Gazprombank for the first time, while also barring companies from providing Russia with corporate services such as accounting and consulting.

However, diplomats said Hungary continued to hold back progress in Brussels on the EU’s proposed sixth package of sanctions, which will include a phased-in oil embargo aimed at squeezing Moscow’s sources of cash.

With Russia preparing for Victory Day celebrations on Monday, the G7 and its allies are seeking to harden the economic pressure on President Vladimir Putin’s regime. Joe Biden, the US president, on Sunday met his G7 counterparts and Ukraine’s leader Volodymyr Zelensky as part of a co-ordinated show of support for the war-torn country.

A senior Biden administration official said the new US sanctions targeted 27 executives of Gazprombank, Russia’s third-largest lender and a subsidiary of state-owned energy company Gazprom. But the measures did not freeze the company’s assets or prohibit transactions with it since it is the main way Russia sells gas to Europe.

“We’re sanctioning some of their top business executives, they’re the people who sit at the top of the organisation, to create a chilling effect . . . we don’t want Gazprombank to be seen as a safe haven,” the senior Biden administration official said.

Also targeted are executives of Sberbank, while Russian officials accused of human rights violations will face visa restrictions. The new US package prohibits companies from providing accounting, consulting and other services to Russia to try to prevent Moscow from reformulating business strategies to circumvent the west’s sanctions.

The EU has also been attempting to push through its latest sanctions package, which would include a phased-in ban on Russian crude, as well as measures on professional services. However a meeting of EU ambassadors in Brussels on Sunday finished without a deal, meaning the 27 member states will continue to negotiate this week.

Diplomats stressed that there had been progress, but Hungarian foreign minister Péter Szijjártó said Budapest was still not ready to agree to the oil ban.

“We have voted in favour of all the sanctions packages so far, but this latest one would destroy the security of energy supply in Hungary, which is still on solid feet,” Szijjártó wrote on Facebook. “As long as there is no solution to the problem posed by the Brussels proposal, we will not be voting in favour of this package.”

Under the EU’s proposals, most countries would have to ban Russian crude within six months, but Hungary and Slovakia would have until the end of 2024 and the Czech Republic would be offered until June 2024.

US first lady Jill Biden made a surprise trip to Ukraine on Sunday, in another signal of Washington’s backing after the US stepped up aid to the country in recent weeks. She met Ukraine’s first lady Olena Zelenska in a town near the border with Slovakia.

The US professional services ban affects the Big Four accounting firms and consultancies, which have started to pull out of Russia. The exits could take several months, officials at the firms have said.

Legal services will be excluded from the ban, the senior administration official said, so that companies seeking due process through US lawyers can continue to do so. The official added that this could change in the future.

The US also blacklisted eight Russian shipping and other maritime companies, which the US says have supported Russia’s efforts to resupply troops, occupy Crimea and exploit energy reserves. The US blocked 69 vessels associated with these companies.

The US package includes new export controls, and sanctions on three of Russia’s most popular state television channels. It is also banning the export of industrial engines, bulldozers and other industrial supplies, the official said. The EU will impose export restrictions on chemicals.

“These new controls will further limit Russia’s access to components that it needs to replenish and restock its military capabilities,” the senior administration official said.