U.S. Presses Partners to Weed Out Illicit Trade With Russia

The United States is stepping up efforts to persuade partner nations that have not joined Western sanctions on Russia to crack down on commercial activities in their countries that could be helping Moscow’s war effort in Ukraine, U.S. officials said.

Those efforts include pointing out to foreign governments transactions that the United States suspects are helping Russia evade sanctions and threatening new American sanctions on people and companies that the United States believes are fueling Russia’s war machine, the officials said on Friday.

The new push comes as the first anniversary of Russia’s invasion of Ukraine approaches and as U.S. officials, recognizing the limited effect of layers of Western sanctions on Russia, seek new ways to increasingly damage the Russian economy and undermine President Vladimir V. Putin’s ability to support his forces.

The sting from these sanctions is leading Russia to look for new economic pathways, said a senior U.S. official, who spoke on the condition of anonymity because he was not authorized to publicly discuss the efforts.

Despite broad consensus in the United States and Europe about the need to punish Russia economically for its invasion, other large nations — including China, India and Saudi Arabia — have refused to apply sanctions, in many cases greatly benefiting their economies.

The new U.S. efforts have focused on Turkey, a NATO ally, and the United Arab Emirates, a close political and security partner of the United States. Both countries have resisted Western pressure to impose sanctions on Russia, instead continuing to trade with it and providing havens for wealthy Russians and their capital.

This past week, Brian Nelson, the Treasury Department’s top sanctions official, pressed the United States’ case with officials in both countries, pointing out transactions that the United States suspected could help Russia evade sanctions and raising the possibility of new measures against the people and companies involved.

The State of the War

  • A New Assault: Ukrainian officials have been bracing for weeks for a new Russian offensive. Now, they are warning that the campaign is underway, with the Kremlin seeking to reshape the battlefield and seize the momentum.
  • Russia’s Soaring Death Toll: The number of Russian troops killed and wounded in Ukraine is approaching 200,000. American and other Western officials say that the figure is a stark symbol of just how badly invasion has gone for the Kremlin.
  • In the East: Russian forces are ratcheting up pressure on the beleaguered city of Bakhmut, pouring in waves of fighters to break Ukraine’s resistance in a bloody campaign aimed at securing Moscow’s first significant battlefield victory in months.
  • Military Aid: After weeks of tense negotiations, Germany and the United States announced they would send battle tanks to Ukraine. But the tanks alone won’t help turn the tide, and Kyiv has started to press Western officials on advanced weapons like long-range missiles and fighter jets.

The senior American official said the United States had indicated specific ways it had seen some companies interact with those under sanction.

These activities have included deals with penalized Russian companies, trade with Russia in U.S.-made products and the export to Russia of so-called dual-use goods, like plastics, rubber and electronics that can be used both for civilian and military purposes, the senior official said.

The Treasury Department said last week that sanctions on companies involved in such activities could block them from doing business in some of the world’s wealthiest countries, possibly undermining their profits.

A cafe and co-working space catering to Russians in Antalya, Turkey. Tens of thousands of Russians have settled in the country, bringing in foreign currency that has helped stabilize its sagging economy.Credit…Sergey Ponomarev for The New York Times

In Turkey, Mr. Nelson, the Treasury Department’s under secretary for terrorism and financial intelligence, met with officials from the central bank and the Ministries of Finance and Foreign Affairs, as well as with representatives of Turkish banks, said Morgan Finkelstein, a Treasury Department spokeswoman.

Since the Ukraine war began last February, Turkey has frustrated other members of NATO by not only refusing to impose sanctions on Russia, but also by deepening its trade ties with Moscow. The Turkish government has stepped up imports of discounted Russian oil and gas, and Turkish companies have bolstered their exports to Russia, in many cases filling gaps left by European firms that have pulled out of the market.

Tens of thousands of Russians have settled in Turkey, bringing in foreign currency that has helped stabilize the country’s sagging economy. Some have established businesses, which American and other Western officials suspect could help Russia import products that it struggles to get elsewhere.

President Recep Tayyip Erdogan of Turkey has condemned the Russian invasion of Ukraine, but he has maintained ties with Mr. Putin, casting himself as a necessary go-between.

Turkish officials have questioned the effectiveness of sanctions and said imposing them would damage the Turkish economy. But they have reassured their American counterparts that they do not want Turkey-based firms to help the Russian war effort.

Mr. Nelson made a similar push in the Emirates, also emphasizing the United States’ willingness to “take additional actions against those evading or facilitating the evasion of sanctions,” the Treasury Department said in a statement on Thursday.

The Emirates has come under pressure from American officials in the past over its role as a hub for the evasion of sanctions on Iran, its neighbor across the Persian Gulf and a historic trading partner.

Since the war in Ukraine began, the Emirates has also become a major destination for Russians, including middle-class visitors as well as rich oligarchs who have parked their yachts in its marinas and moved into its high-rises, driving a boom in luxury real estate.

Last month, the United States placed sanctions on an Emirates-based aviation firm, Kratol, accusing it of providing aircraft to the Wagner private military company close to Mr. Putin that it said were used to move “personnel and equipment” between the Central African Republic, Libya and Mali, the Treasury Department said.

Emirati officials have portrayed their country as a neutral mediator in the conflict, hosting a prisoner exchange between the United States and Russia while continuing to engage with Russian officials.

“There are many Russians who are not sanctioned and are interested in safer havens,” Anwar Gargash, a diplomatic adviser to the Emirates’ president, told reporters last year. “These nonsanctioned individuals have nothing to do with the war and trying to lump them together with bigger issues is problematic.”

Safak Timur contributed reporting from Istanbul, and Vivian Nereim from Riyadh, Saudi Arabia.

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