US Treasury Secretary Janet Yellen has warned China’s banks of “significant consequences” if they provide material support to Russia to bolster its military capabilities, Bloomberg reports.
Yellen said on Monday in prepared remarks for a press conference at the US ambassador’s residence in Beijing, using an abbreviation for the People’s Republic of China:
“I stressed that companies, including those in the PRC, must not provide material support for Russia’s war, and that they will face significant consequences if they do. Any banks that facilitate significant transactions that channel military or dual-use goods to Russia’s defence industrial base expose themselves to the risk of US sanctions.”
Yellen’s threats came as Russian Foreign Minister Sergey Lavrov arrived in Beijing to discuss issues including Ukraine.
America’s main weapon against financial institutions is the Treasury Department’s ability to cut off their access to US dollars, which is an existential threat to any bank operating internationally.
In late December 2023, US President Joe Biden signed an executive order that gave the US Treasury Department the authority to impose sanctions on foreign banks for assisting in transactions for under-sanctioned Russians or facilitating transactions related to the Russian military industry. Among the possible restrictions, the document envisages a ban on correspondent accounts in US banks and even a complete blocking of the property of foreign financial institutions.
