Ukraine crisis: US imposes sanctions on Russia's Vnesheconombank and Promsvyazbank

In retaliation against Russia’s moves in Ukrainian borders, the United States has imposed sanctions on two banks, Vnesheconombank VEB and Promsvyazbank, for their alleged role in supporting the Russian military. 

The decision from the US comes after Russian President Vladimir Putin recognized two Ukrainian regions, Donetsk and Luhansk as independent states. 

The sanction from the United States will freeze the assets of these two large state-owned Russian financial institutions and will prohibit US citizens and businesses from doing any transactions with them. 

The move by the United States is designed to cripple banking activities and may shut these institutions out of the global financial system. 

It follows similar moves by the UK, on Feb. 21, which also slapped sanctions on five Russian banks including Rossiya and Promsvyazbank PSB UK and notable billionaires with close links to Putin.

Reports on Wednesday suggested the UK will also stop Russia selling sovereign debt in London.

“These prohibitions will cut off the Russian government from a key avenue by which it raises capital to fund its priorities and will increase future financing costs. It denies Russia access to key US markets and investors,” said the White House in a statement. 

Amid ongoing tensions, Germany had also halted the Nord Stream 2 Baltic Sea gas pipeline project which was designed to double the flow of Russian gas direct to Germany.