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U.S. Expels Russian Diplomats, Targets Debt Market As Kremlin Vows Retaliation

By RFE/RL April 15, 2021

The United States has imposed wide-ranging sanctions on Russia in retaliation for election interference, cyberattacks, and what Washington described as Moscow's other "harmful" foreign activities.

In an executive order, U.S. President Joe Biden on April 15 announced the expulsion of 10 Russian diplomats and sanctions against dozens other Russian individuals and entities as it moved to hold the Kremlin accountable for actions against the United States and its interests.

The salvo of measures "sends a signal that the United States will impose costs in a strategic and economically impactful manner on Russia if it continues or escalates its destabilizing international actions," the White House said.

In a potential blow to the Russian economy, the U.S. Treasury also placed additional limits on the Russian sovereign debt market in a step that is sure to spook investors.

The sanctions, which Moscow swiftly denounced while warning of retaliation, come amid rising tensions between the West and Russia over a buildup of Russian troops near Ukraine and the imprisonment of opposition leader Aleksei Navalny after he was poisoned with a nerve-agent last year.

"The Transatlantic community stands united in supporting Ukraine against unilateral Russian provocations along the Line of Contact in eastern Ukraine, in occupied Crimea, and along Ukraine's borders, as well as agreeing on the need for Russia to immediately cease its military buildup and inflammatory rhetoric," the White House said.

In a separate statement acknowledging the sanctions, Secretary of State Antony Blinken also voiced concern over Navalny's fate.

"We remain concerned about Navalny's health and treatment in prison, and call for his unconditional release," the statement said.

The U.S. broadside comes after Biden told Russian President Vladimir Putin earlier this week in a phone call to "de-escalate tensions" as Russia continues the military buildup on Ukraine's border, and said the U.S. would "act firmly in defense of its national interests" regarding Russian intrusions and election interference.

In targeting the Russian sovereign debt market, Biden's executive order prohibits U.S. financial institutions from participating in the primary market for ruble or non-ruble denominated bonds issued after June 14. The U.S. already bans American investors from buying newly issued Russian government foreign-currency debt.

"Judging from history, removing U.S. investors as buyers in this market can create a broader chilling effect that raises Russia's borrowing costs, along with capital flight and a weaker currency. And all of these forces have a material impact on Russia's growth and inflation outcomes," said a senior Biden administration official.

"As we take these actions, we also want to be clear that we have no desire to be in an escalatory cycle with Russia. We intend these responses to be proportionate and tailored to the specific past activities, past actions that Russia has taken. We have indicated that we seek a stable and predictable relationship going forward. President Biden spoke with President Putin earlier this week and conveyed that directly," the official added.

Hacking Allegations

U.S. intelligence officials have previously pointed the finger at Russia for a massive hack known as SolarWinds that hit large swaths of the U.S. public and private sectors last year. Russia has denied the accusations.

In the latest measures, the United States named those behind the SolarWinds hack.

"Today the United States is formally naming the Russian Foreign Intelligence Service (SVR), also known as APT 29, Cozy Bear, and The Dukes, as the perpetrator of the broad-scope cyber espionage campaign that exploited the SolarWinds Orion platform and other information technology infrastructures," the White House said.

"The U.S. Intelligence Community has high confidence in its assessment of attribution to the SVR."

The 10 diplomats being expelled include representatives of Russian intelligence services, the White House said.

Besides that hack, U.S. officials last month said that Putin authorized moves to help former U.S. President Donald Trump in his unsuccessful bid for reelection as president.

The latest sanctions include six Russian companies that support the country's cyberactivities, in addition to sanctions on 32 individuals and entities accused of attempting to interfere in last year's presidential election. Russian election interference did not impact U.S. election systems or vote tallying.

"This action seeks to disrupt the coordinated efforts of Russian officials, proxies, and intelligence agencies to delegitimize our electoral process. The U.S. government will continue to pursue those who engage in such activity," it said.

The 10 diplomats being expelled include representatives of Russian intelligence services, the White House said.

The statement also said that Washington was using diplomatic, military, and intelligence channels to respond to reports that Russia encouraged the Taliban to attack U.S. and allied troops in Afghanistan based on the "best assessments" of the intelligence community.

The White House did not publicly confirm the reports, but said that "the safety and well-being of U.S. military personnel, and that of our allies and partners, is an absolute priority of the United States."

NATO and the European Union both expressed solidarity with the U.S. move.

"NATO Allies support and stand in solidarity with the United States, following its 15 April announcement of actions to respond to Russia's destabilizing activities," the statement said.

"The European Union and its Member States express their solidarity with the United States on the impact of malicious cyber activities, notably the SolarWinds cyber operation, which, the United States assesses, has been conducted by the Russian Federation," the EU's foreign policy chief Josep Borrell said in a statement.

"The compromise affected governments and businesses worldwide, including in EU Member States," the statement added.

In reaction to the announced sanctions, U.S. Ambassador to Russia John Sullivan was summoned to the Russian Foreign Ministry, which said "a response to the sanctions is inevitable."

Just before the sanctions were announced, Kremlin spokesman Dmitry Peskov told the TASS news agency that any sanctions would be considered "illegal."

With reporting by Reuters, AFP, AP, TASS, and Interfax

Source: https://www.rferl.org/a/united-states- expels-russian-diplomats-slaps-fresh-round-of -sanctions-on-russia-kremlin-warns -of-retaliation/31205573.html

Copyright (c) 2021. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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