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Zelensky presses Biden to increase economic pressure on Moscow, expand sanctions

The Ukrainian leader on Friday pushed Biden to further punish Putin for Russia’s invasion

President Biden and first lady Jill Biden arrive back at the White House on March 13 after a weekend at Camp David. (Shawn Thew/Bloomberg News)

Ukrainian President Volodymyr Zelensky on Friday asked President Biden to broaden America’s economic campaign against Russia, telling the U.S. president that more should be done to cut off Russia from international trade, according to two people familiar with the phone call.

Zelensky has been grateful and supportive of the economic penalties announced by the Biden administration to date, such as a White House measure announced Friday to end normalized trade relations with Russia. But he also requested that Biden seek to close loopholes in the existing sanctions, significantly broaden the list of sanctioned Russian government officials and restrict Russia’s access to international waterways, the people familiar with the matter said.

Biden, European allies move to strip Russia of trade status

Zelensky and the Ukrainian government have been adamant that Western allies move faster to punish Russia economically for its invasion, with Zelensky calling for an international trade embargo on all Russian goods and products. Ukraine also wants the United States to ban Russian ships from its ports and channels.

U.S. sanctions on Russian officials have largely targeted Kremlin elites and members of the State Duma, one of two chambers of Russia’s legislature. Zelensky on Friday asked Biden to extend the sanctions to cover members of Russia’s regional governments, too, the people familiar with the matter said.

Shortly before publicly announcing the measures in a speech at the White House, Biden called Zelensky on Friday morning to brief the Ukrainian president on the administration’s latest suite of sanctions on Russia, one person familiar with the matter said. Zelensky told Biden that the sanctions are having a significant impact on Russia but that he wanted them to be expanded as quickly as possible, the person said.

The people spoke on the condition of anonymity to reflect details of the private phone call.

In just over a week, Western allies have imposed one of the most rapidly moving sanction campaigns in modern history against Russia. (Video: Luis Velarde/The Washington Post)

Russian oil giant Lukoil had big dreams for its U.S. gas stations. The invasion of Ukraine could spell the end.

Zelensky previously tweeted about the conversation with Biden: “Had a substantive conversation with @POTUS. Gave him the assessment of the situation on the battlefield, informed about the crimes of Russia against the civilian population. We agreed on further steps to support the defense of Ukraine and increase sanctions against Russia.”

A White House spokesman declined to comment. The White House previously said in a statement that Biden spoke to Zelensky on Friday “to underscore his support for the Ukrainian people as they continue to defend their country against Russia’s unprovoked and unjustified attack.”

Zelensky’s request reflects the increasingly difficult challenge facing the White House as it tries to enact severe financial penalties on Russian President Vladimir Putin without causing too much damage to the global economy.

The White House has moved with unprecedented speed to impose economic punishments on Russia since the invasion began. It has limited Russia’s technology imports, cut off U.S. imports of Russian oil and gas, targeted Russia’s financial reserves and imposed sanctions on Kremlin financial elites close to Putin, among other measures.

Russia’s economy still retains key financial ties to the West, however. Europe, for instance, was unable to immediately cut off its Russian energy supply because of its massive reliance on it, and only the United Kingdom has moved to ban Russian vessels from its ports.

“What you’ve seen, at least to start with, is incredible and unprecedented coordination of sanctions from among the largest economies in the world,” said Adam Smith, who served as a sanctions official during the Obama administration. “However, all of these jurisdictions have their own methods for imposing sanctions, and their own vulnerabilities with respect to collateral consequences, and there’s been some divergence.”

U.S., European allies freeze ‘Putin’s war chest’ as Russia careens toward economic crisis

The ongoing atrocities in Ukraine will only increase pressure on the Biden administration to escalate economic measures on Russia. Russian missiles struck a Ukrainian military site near the Polish border early Sunday, killing at least 35 people and injuring more than 100. A U.S. journalist was killed on Sunday, and The Washington Post reported on Saturday that Russian attacks have hit at least nine Ukrainian medical facilities.

“The reality is that the Russian army invading Ukraine right now can operate because of the taxes many [international] companies are paying to the Russian budget, which is paying for the killing spree in Ukraine at the moment,” Sviatoslav Yurash, a member of Ukraine’s parliament, said in an interview.

Members of Ukraine’s government have been adamant that Western firms cease financial operations in Russia. Maryan Zablotsky, a member of Ukraine’s parliament who sits on its finance committee, is preparing a list of U.S.-based firms still paying taxes in Russia.

“We should make all U.S. companies leave Russia — not just stopping investment but leaving,” Zablotsky said. “Of course, they’re stopping investment in Russia — that’s not a concession, given the conditions.”

Dozens of corporations are still in Russia. It’s getting harder for them to leave.

Logistical hurdles could also complicate full implementation of Zelensky’s requests.

Ariel Cohen, a senior fellow at the Atlantic Council Eurasia Center and a member of the Council on Foreign Relations, said a ban on Russian ships in certain ports and channels could lead them to “reflag” — to change the registry of the ship to be under another country — though such a move is likely to be “insignificant in the overall picture in Russian economic activity.”

“We definitely need to help Ukraine, but if we don’t want an all-out war with Russia that may escalate to nuclear, we cannot impose an outright blockade. We need to think what can and cannot fly in terms of these measures,” Cohen said. “What prevents China from stepping in and using Chinese ships, for example?”

The domestic consequences could also increase along with the economic measures. Shortly after the invasion began, the amount of both crude oil and oil products flowing out of Russia fell from approximately 8 million barrels a day to close to 6 million barrels a day, primarily because of traders who feared being hit by sanctions, according to Bob McNally, an energy analyst at Rapidan Energy Group who served in the George W. Bush administration. Biden has already been bludgeoned by Republicans over high inflation, and further economic escalation could push the price of a gallon of gas still higher.

Still, administration officials have expressed confidence that Americans will blame Putin more than the president for higher prices at the pump.

“I think the American people understand the importance of suffering some toll themselves to uphold the values that we hold dear that are fundamental to a peaceful world order,” Treasury Secretary Janet L. Yellen told reporters on Friday.

War in Ukraine: What you need to know

The latest: Russian President Vladimir Putin signed decrees Friday to annex four occupied regions of Ukraine, following staged referendums that were widely denounced as illegal. Follow our live updates here.

The response: The Biden administration on Friday announced a new round of sanctions on Russia, in response to the annexations, targeting government officials and family members, Russian and Belarusian military officials and defense procurement networks. President Volodymyr Zelensky also said Friday that Ukraine is applying for “accelerated ascension” into NATO, in an apparent answer to the annexations.

In Russia: Putin declared a military mobilization on Sept. 21 to call up as many as 300,000 reservists in a dramatic bid to reverse setbacks in his war on Ukraine. The announcement led to an exodus of more than 180,000 people, mostly men who were subject to service, and renewed protests and other acts of defiance against the war.

The fight: Ukraine mounted a successful counteroffensive that forced a major Russian retreat in the northeastern Kharkiv region in early September, as troops fled cities and villages they had occupied since the early days of the war and abandoned large amounts of military equipment.

Photos: Washington Post photographers have been on the ground from the beginning of the war — here’s some of their most powerful work.

How you can help: Here are ways those in the U.S. can support the Ukrainian people as well as what people around the world have been donating.

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