US expands sanctions on Sistema PJSC in bid to disrupt Russian military supply chain

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US expands sanctions on Sistema PJSC in bid to disrupt Russian military supply chain
Credit: © Reuters.

In a continued effort to impede Russia's military supply chain amid its conflict with Ukraine, the US has expanded sanctions on Russian conglomerate Sistema PJSC. The measures, announced this week, encompass the company's subsidiaries based in Luxembourg, Russia, and Singapore, as well as any entity where Sistema holds a majority stake.

The sanctions also extend to companies from China, Turkey, and the United Arab Emirates that are suspected of providing dual-use items to Russia. These actions are part of a broader package targeting 130 individuals and entities associated with Russia's defense and technology sectors. Key targets among these sanctioned entities include third-party firms like those operated by Turkish national Berk Turken, who is alleged to have ties to Russian intelligence. Turken is accused of assisting Russia by arranging payments and shipping details that bypass sanctions.

In addition to these financial penalties, the U.S. Treasury Department has also imposed sanctions on several UAE firms for their role in aiding Russia. Companies such as ARX Financial Engineering Ltd. face penalties for shipping aviation equipment to Russia and facilitating the conversion of Russian rubles from the sanctioned VTB Bank into U.S. dollars.

Simultaneously, the State Department is imposing diplomatic sanctions on Russian energy production and its metals and mining sector. This move is designed to further curtail Russia's access to vital battlefield equipment for its Ukraine invasion.

This latest move by the US follows earlier sanctions imposed on Sistema by the UK in response to Russia's invasion of Ukraine. Despite these measures causing significant impact on the Russian economy, they have not deterred Putin's forces. The conflict situation is currently reported as a "stalemate" by Ukrainian forces, according to Treasury Secretary Janet Yellen.

These sanctions aim to disrupt Russia's military supply chain during its ongoing war with Ukraine. However, it remains to be seen how effective these enhanced measures will be in changing the course of the conflict. These measures compound the extensive financial penalties already imposed on Russian infrastructure, officials, banks, and oligarchs.

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