Yellen Says Some Russia Sanctions Could Remain Even If Ukraine War Ends

Secretary of the Treasury Janet Yellen at the Center for Global Development in Washington, D.C., on Oct. 6, 2022. (Alex Wong/Getty Images)

U.S. Treasury Secretary Janet Yellen announced that some sanctions on Russia would likely remain in place even if the war in Ukraine ends.

Yellen, who is attending the annual G-20 summit in Bali, Indonesia, said that any eventual peace agreement would generally involve a review of the sanctions that the United States and its allies have imposed on Russia. However, how comments indicate  the Biden administration is leaning towards continuing its pressure campaign on the Russian economy in the long-term.

“There really hasn’t been any effort on Russia’s part to want to undertake negotiations with Ukraine on any terms that are acceptable to Ukraine,” Yellen said in a Nov. 14 interview at the G-20, reported The Wall Street Journal.

 “I suppose in the context of some peace agreement, adjustment of sanctions is possible and could be appropriate.

“We would probably feel, given what’s happened, that probably some sanctions should stay in place,” she said.

Western States Call For Negotiations

After Russia’s surprise withdrawal from the strategic city of Kherson, U.S. and European leaders are now looking at how to negotiate a peace with Russia before the winter.

Western leaders have said it is up to the Ukrainians to define the terms of an acceptable settlement with the Russians.

French President Emmanuel Macron has made it clear that the leadership of both sides will have to sit together to discuss terms and that the timing of that decision lies in Kyiv’s hands.

Ukraine’s President Volodymyr Zelensky has said he is open to “genuine peace talks” with the Kremlin as all parties determine the future of the increasingly costly eight-month conflict.

However, Zelensky has said that any conditions for talks would include the return of all territory annexed by Russia annexed since 2014, compensation for damages, and handing over Russian military personnel and officials as perpetrators of alleged war crime—a move that President Vladimir Putin would likely reject.

On Nov. 7, Zelensky said that Ukraine’s allies should focus on “stopping Russian aggression, restoring our territorial integrity and forcing Russia into genuine peace talks.”

Sanctions Over Military Technologies

Meanwhile, Yellen said that the United States will impose additional sanctions on an international group of individuals and companies that have procured military technologies for Russia’s war effort in Ukraine.

Ukraine’s allies have been trying to cut off Russia’s access to advanced military related technology and add more pressure on its financial system, but the Russians have still been able to maintain high earnings from their energy exports.

The Treasury chief told reporters at the G-20 that the new sanctions would target 14 individuals and 28 entities, including financial entities, without providing further details.

“This is part of our larger effort to disrupt Russia’s war effort and deny equipment it needs through sanctions and export controls,” she said.

The U.S. State Department said this week that it will continue to work with the Treasury Department to target a transnational pro-Kremlin procurement network in Europe and Asia.

The Commerce Department has also joined the campaign to cut off exports of American made chip components and other technologies used by the Russian military.

The Russian defense industry reportedly is heavily reliant on imported microelectronics from the West and China.

Yellen admitted that U.S. designed technology, previously acquired by Russia, has had an impact in the conflict.

“The United States will continue to expose and disrupt the Kremlin’s military supply chains and deny Russia the equipment and technology it needs to wage its illegal war against Ukraine,” she said in a statement.

“Today’s actions demonstrate Treasury’s steadfast commitment to targeting people around the world aiding Putin’s war effort and the crony elites who bankroll his regime.

“Together with our broad coalition of partners, we will continue to use our sanctions and export controls to weaken Russia’s military on the battlefield and cut into the revenue Putin is using to fund his brutal invasion.”

Yellen said that the United States will continue to support Kyiv with financial and economic aid, and has requested another round of $4.5 billion in non-military assistance for Ukraine from Congress to be immediately transfered to Zelensky’s government.

US Lobbies G-7 For More Penalties

Putin has said that he will not attend the G-20 event in person, but may address the meeting virtually.

Both Yellen and President Joe Biden said they would not meet with with Putin under any circumstance if he attended the conference.

However, Biden still met with Chinese Communist leader Xi Jinping on Nov. 14 to discuss matters such as Ukraine and Taiwan.

The Treasury Secretary has been pushing the G-7 and Australia to impose a price cap on Russian oil to put further pressure on Putin.

The price cap would bar firms in those countries from providing maritime services, such as insurance for shipping carrying Russian oil unless it is sold below a price cap and is intended to simultaneously reduce Russian energy sales revenue, while allowing enough of it to stay on the global markets to keep prices stable.

Energy prices have been volatile since the initial sanctions, particularly in Europe, which is facing severe shortages that are wrecking their economies.

The Biden administration hopes that an imposed price cap will eventually ease the aftereffect of the EU’s tough sanctions on Russian oil and reduce the economic damage on energy markers.

The price cap proposal has been delayed while policymakers work on finalizing the details, including the actual amount for the cap before it goes into effect on Dec. 5.

US, EU Officials Negotiate Price Cap

Meanwhile, the EU strengthened the measure to extend beyond shipping to secondary services such as insurance and financing, which would make all ships violating the price cap indiscriminately lose access to maritime services.

U.S. officials reportedly objected to this extension of the plan, according to The Wall Street Journal, as they fear that shipping companies around the world may stop carrying Russian oil entirely to avoid losing access to European insurance and finance for even non-Russian oil shipments, which would cause prices to unintentionally skyrocket.

Yellen said that she is working with her European counterparts to ease any blowback from the caps, reported The Wall Street Journal.

“We spent some time discussing this with them and discussing their implementation. And I think we’re in a reasonable place on it,” she said.

“It’s hard to know what Russia’s response is going to be. I don’t think that they can really afford to shut a lot of oil in. They need the revenue.”

However, the Kremlin has said that any price cap would potentially lead to a cut off of shipments in retaliation for any country that enforces that plan and that they will definitely not sell oil under a price cap.

The G-7 nations dominate maritime insurance and financing, which would force Russia to rely on less reliable and more expensive alternatives to ship its oil.

This could ultimately reduce Russia’s revenue, even if it refuses to sell under the cap.

Yellen said that the Biden administration may choose to continue to drain the already depleted Strategic Petroleum Reserve if the Russians retaliate on the price caps—a policy that has drawn much domestic criticism and little support from within the Democrat party.

“We think the price cap is gonna work and we still have possibilities with the Strategic Petroleum Reserves that we could use,” she said.

Reuters contributed to this report.