U.S. warns of sanctions against suppliers of ammunition to Russia

By Daphne Psaledakis, Karen Freifeld and Andrea Shalal

WASHINGTON (Reuters) -The United States on Friday warned it can impose sanctions on people, countries and companies that provide ammunition to Russia or support its military-industrial complex, as Washington seeks to increase pressure on Moscow over the war in Ukraine.

Deputy Treasury Secretary Wally Adeyemo, at a first-of-its kind gathering with officials from 32 countries and the United States to discuss sanctions on Russia, made clear that Washington is prepared to take action against those outside the United States evading Washington’s sanctions.

Officials at the meeting, which included representatives from EU countries, Canada and South Korea, discussed additional steps planned to target Russia’s military-industrial complex and the effects of several rafts of sanctions imposed by Washington and its partners over Moscow’s invasion of Ukraine, which has killed or wounded thousands.

The Treasury Department also warned that Washington is prepared to impose sanctions on those providing ammunition or other military goods to Russia as well as private military companies or paramilitary groups that participate in or support Russia’s war in Ukraine.

In addition, the Treasury, Commerce and State departments issued an alert outlining actions that have been taken against Russia’s military-industrial complex and noting the risks those providing material support for Russia’s invasion of Ukraine face.

The alert said that by restricting Russia’s access to advanced goods, technology and services, Washington and its partners have impacted Russia’s ability to replace weapons, including over 6,000 pieces of military equipment destroyed in the war.

The United States at the meeting was also set to warn that Russia is “expending munitions at an unsustainable rate” and turning to countries like Iran and North Korea for supplies and equipment, including, drones, rockets and artillery munitions, according to a copy of the presentation from Morgan Muir, deputy director of national intelligence for mission integration, seen by Reuters.

The export control measures imposed by Washington and a coalition of 37 countries have had an impact, according to the presentation, with Russia’s defense industry reliant on imported microelectronics and other parts. A critical shortage of bearings is undermining the production of tanks, aircraft, submarines and other military systems, the presentation noted.

Muir was also set to caution at the meeting that Russian intelligence services are seeking to illicitly acquire Western technology and parts barred from Russia under U.S. measures.

The network used to acquire the technology includes oligarchs, proxies and front companies, and targets Europe and North America as a priority, according to the presentation.

Earlier this year, Washington imposed sweeping new restrictions on shipments to Russia of U.S. and foreign goods, if made with U.S. equipment or technology, in an effort to degrade Russia’s military and industrial sectors.

The controls primarily target Russia’s defense, aerospace, and maritime sectors. They also target Russia’s energy production sector as well as luxury goods used by Russian elites.

The restrictions from Washington and its allies have reduced semiconductor imports, critical to Russia’s weaponry, by 70%, according to the alert. As a result, Russian hypersonic ballistic missile production has nearly ceased and the production of cars fell by three-quarters compared to last year.

Asked how much more Western allies could do to increase pressure on Russia, one European finance official said, “We can extend the list of people who are under sanctions. We can extend the number of goods that have export restrictions.”

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