Jęczniak: economical War with Russia circular another

The impact of the West on the Russian economy was powerful and could have knocked down the biggest player. Russia has endured, as they say, not the 1 who will give the heaviest punch, but the 1 who will endure more. So it's time for another punch.

The powerful West, over 60% of the planet economy and 90% of investment capital, could not do much against Russia on the world's most crucial market. The knockout effort failed, although Russia got hit beautiful good. However, it did not reduce the extraction, it contained the situation. Oil is yet over 20% of the economy and its exports are the largest origin of state income. More importantly, a powerful manufacture was kept alive, giving jobs to millions of Russians.

On 22 December, president Biden signed the Executive Order by launching secondary sanctions. It's specified a vague notion, you don't know what it's about, it doesn't sound dangerous... But utilizing them means that if Washington doesn't like something, he can punish any abroad bank that operates transactions with Russia.

Jake Sullivan, a national safety advisor at the White House, wants to “screw the Russian screw” and threatened everyone that they could “lost access to the US financial system.” Read: to the dollar, a currency that is paid for almost half the world's trade, in which 60% of the world's abroad exchange reserves are collected.

It will technically block access to correspondent banks in the US. These are financial institutions, mainly in fresh York that service as a point of access to the global financial system, without which no dollar operation can be carried out.

The adoption of fresh regulations by Washington is the granting of a right to hit any bank that handles any operation that in America seems suspicious. The reason may be any, as the instructions explain that the punishment will besides be "indirect sales of goods helping the Russian army". A very dull formula, paralyzing all operations. In addition, Janet Yellen warned them that "no 1 should uncertainty the determination of the United States", which expects "financial institutions to make all effort...". Finally, she threatened: “We will not hesitate to usage fresh tools for strong, surgical actions.”

There is besides instruction: banks are to themselves scan their customers and pro-actively analyse whether sanctions are being violated. And most importantly, follow and inform authorities about suspicious transactions. In September, US banks reported 400 specified operations, but not enough! They must be more alert and inquisitive. Don't let the mouse slip.

The suffocation strategy against its own interests works from the top. From the president who intervenes in the thickest cases and with the most resisting politicians. But Janet Yellen already regularly instructs the G-7 Group or even the G-20. Her deputy Wally Adeyemo haunts European capitals (Brussels, London or Paris), and her deputy Elizabeth Rosenberg, a specialist in terrorist financing and financial crime, is pushing Asian allies. Around the world, they prosecute Russian businesses and money, officially recommending "prevention, follow and eliminate".

This truly is simply a global economical war. Therefore, Brian Nelson, who deals with terrorism and financial intelligence in the Department of Commerce, uses military language, speaking of "focusing efforts on this battlefield, pursuing those who let president Putin to task force". These are terms utilized by the military, referring to the anticipation of maintaining influence abroad. And it is indeed about the isolation of Russia, the cutting off of its relation with the remainder of the world.

The signal is clear to the global banks: The United States, the most powerful economy, puts it ahead of its choice: either they are continuing any tiny pockets with Russia or they will stay in the US financial system. All of them remember the stunningly advanced fine of $10 billion for the French bank BNP Paribas in 2014. Although his actions did not violate the laws of the country where he was registered. But obedience broke, that was enough.

Andrzej Szczęsniak

Think Poland, No. 1-2 (1-7.01.2023)