Biden cuts Western financing for Russian sovereign debt in first tranche of sanctions

US President Joe Biden announced what he called the “first tranche” of sanctions on Russia in response to its invasion of Ukraine, beginning by cutting off Western financing for the country’s sovereign debt.

“Who in the Lord’s name does Putin think gives him the right to declare new so-called countries on territory that belonged to its neighbors?” Biden said in his first televised remarks since Russian President Vladimir Putin declared the independence of two Moscow-backed regions in Ukraine.

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“This is the beginning of a Russian invasion of Ukraine,” Biden said. “He’s setting up a rationale to take more territory by force.”

Two Russian banks and Russia’s sovereign debt will be hit first, Biden said. Russian oligarchs and their families will be sanctioned in the coming days, he added.

“That means we’ve cut off Russia’s government from Western financing. They can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either,” the US president said.

As for Russia’s elites and their family members, Biden said: “They share in the corrupt… of the Kremlin policies and should share in the pain as well.”

Nord Stream 2 will go to waste

Speaking to reporters after Biden’s remarks, a senior administration official said that Nord Stream 2 would not become operational.

“That’s an $11 billion investment and gas pipeline controlled by Russia that will now go to waste. This decision will relieve Russia’s geostrategic chokehold over Europe through supply of natural gas,” the official, speaking on condition of anonymity, said.

“It’s a major turning point in the world’s energy independence from Russia,” he said.

Germany had announced a temporary halt to the underwater pipeline that would see gas sent from Russia to Germany, bypassing Ukraine.

A US official told Al Arabiya English earlier that the pipeline was “killed for good” in a development that had not been previously reported.

Still time for diplomacy, Biden says

Despite warning that Putin planned to further invade Ukraine, Biden said the door for diplomacy was still open. “There is still time to avert the worst-case scenario that will bring untold suffering to millions of people if they move as suggested,” he said.

Former Assistant Secretary of the Treasury for Terrorist Financing Marshall Billingslea played down Biden’s moves.

“Not much bark today, and very little bite. This will not deter Putin,” he tweeted, adding that VEB had already been under select restrictions since 2014.

Read more: US announces sanctions as Russia’s Putin recognizes Moscow-backed regions in Ukraine