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U.S. officials imposed sanctions on Russia’s two largest lenders, which together hold more than half of the country’s banking assets, and 90 of their foreign subsidiaries on Thursday, hours after Russian forces launched a full-scale attack on Ukraine from three directions.

Treasury’s Office of Foreign Assets Control gave U.S. financial institutions 30 days to close any correspondent or payable-through accounts they hold for Russia’s largest lender, Sberbank, which the Kremlin controls. OFAC also directed institutions to begin “full blocking” of transactions linked to VTB, the country’s second largest by market share.

“On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars,” OFAC stated Thursday. “The vast majority of those transactions will now be disrupted.”

OFAC on Thursday also blacklisted Otkritie, Novikom, and Sovcom, a trio of lenders that control a combined $80 billion in Russian banking assets, and concurrently targeted the fourth- and eleventh-largest banks in Belarus: state-owned Belinvestbank and Bank Dabrabyt.

Treasury further limited the ability of 11 Russian state-owned companies and two private lenders to raise funds on Western financial markets Thursday by banning trade in any new debt linked to them with a maturity of more than 14 days, and similarly prohibiting trades in new equity.

Lenders and other companies subject to the debt-and-equity restrictions include Sberbank, Gazprombank, Russian Agricutural Bank, Gazprom, Transneft, Alpha Bank and Credit Bank of Moscow.

Biden also previewed far-reaching restrictions on the export of sensitive dual-use technology to Russia, with the aim of choking off more than half of all “high-tech imports” to the country.

OFAC additionally imposed asset freezes on six more associates of President Vladimir Putin and three executives of Sberbank and VTB, as well as nine defense contractors and seven politically connected individuals in Belarus, which has served as a staging area for the northern prong of the Russian offensive.

The designations against Russian banks will probably impact an unprecedented volume of transactions but do not present the complexities that Western financial institutions had to navigate to comply with sectoral sanctions imposed on Russia in 2014, said Daniel Tannebaum, head of anti-financial crime in the Americas at Oliver Wyman in New York.

“It’s hard to think of any similarly-sized institution anywhere in the world having ever been designated in the past,” Tannebaum said. “But I have not gotten a sense this is a really tough hill to climb in terms of compliance.”

Britain and Brussels

After drawing criticism for Tuesday’s decision to blacklist five small and midsized lenders as well as three Russian oligarchs whom U.S. officials already designated years ago, the U.K. government responded to Russia’s full-scale invasion of Ukraine on Thursday by moving to sever the country’s access to London’s financial center almost entirely.

Speaking in the House of Commons, Prime Minister Boris Johnson announced Thursday evening that Britain had also blacklisted VTB Bank and its chairman Denis Bortnikov; several defense companies that equip the Russian military or navy, including United Shipbuilding Corporation, the country’s largest shipbuilder; and scores of other parties.

Britain also targeted several other senior Russian bankers and oligarchs with asset freezes and travel restrictions Thursday, including President Vladimir Putin’s former son-in-law Kirill Shamalov, Russia’s youngest billionaire, who is also a shareholder and director of petrochemicals conglomerate Sibur.

More significant to the Russian economy, Johnson said his government would introduce legislation Tuesday to freeze any assets that Russian banks hold in Britain, “totally” block them from accessing U.K. financial markets, and ban “key” state-owned and private non-bank firms from finance and payment processing through the City of London.

U.K. officials are also “pushing” Western governments to agree to expel Russia from SWIFT amid reports that some European countries have shown reluctance to do so.

“We will continue on a remorseless mission to squeeze Russia out of the global economy piece by piece, day by day, and week by week,” Johnson said Thursday.

Furthermore, new banking restrictions that will come into force Tuesday will ban all Russian nationals from holding more than £50,000 in U.K. bank accounts.

Tom Keatinge, director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute in London, told ACAMS moneylaundering.com that the latest measures could prod banks into “de-risking” their entire base of Russian clients and blocking all Russia-related payments.

“The sanctions looked tokenistic on Tuesday, but at first sight this looks like the U.K. pulling the lever that it has: the financial market lever,” said Keatinge. “This means that as a bank, you need to treat Russia like a pariah.”

In addition to sweeping sanctions, Johnson pledged to attempt to strengthen the ability of investigators to use unexplained wealth orders to identify and seize corruptly obtained wealth in Britain, and establish a new “kleptocracy cell” within U.K. National Crime Agency to target oligarchs’ funds and counter any attempts to evade the restrictions.

But the plans for the new unit appeared to catch the NCA off guard Thursday, and officials did not specify whether it would work alongside the agency’s existing International Corruption Unit, or ICU, and the anti-bribery and anti-graft group now operating as part of the National Economic Crime Center, a public-private partnership hosted by the NCA.

An NCA spokesperson told moneylaundering.com in an email that the kleptocracy cell would function as a new investigative unit within the NCA, separate from the ICU, and “draw on” the relationships the NECC already shares with financial institutions and other law enforcement agencies.

“The NCA will work closely with government partners to establish the new cell at pace,” the spokesperson said.

After adopting a limited set of sanctions on Tuesday, the European Council, which represents the EU’s 27 national governments, agreed Thursday to impose “massive and severe consequences” on Russia in response to the country’s full-scale invasion of Ukraine.

The impending sanctions will target Russia’s financial, energy and transport sectors, and cover dual use goods as well as “export control and export financing,” and entail new designations against an unspecified number of Russian individuals.

Josep Borrell, the bloc’s high representative for foreign affairs and security policy, told reporters in Brussels that the European Council has “more or less” already come to a consensus on the scope of the new restrictions and will unveil them Friday.

Contact Valentina Pasquali at vpasquali@acams.org and Koos Couvée at kcouvee@acams.org