A MARTÍNEZ, HOST:
Putin chose war, and he and his country will bear the consequences - those are the words of President Biden as he announced harsher sanctions on Russia.
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PRESIDENT JOE BIDEN: We will limit Russia's ability to do business in dollars, euros, pounds and yen, to be part of the global economy. We'll limit their ability to do that. We're going to stunt the ability to finance and grow the Russian military. We're going to impair their ability to compete in high-tech 21st century economy.
MARTÍNEZ: But earlier rounds of sanctions and weeks of diplomatic efforts by the U.S. and NATO allies have done little to thwart Vladimir Putin's ambitions. And this morning, the Kremlin downplayed the impact of the sanctions, saying any problems they create will be resolved. With us now is Wally Adeyemo, U.S. deputy Treasury secretary. The Kremlin said this morning that Russia had deliberately reduced its dependence on foreign imports to protect itself from the impact of sanctions. Secretary, isn't that undercutting what the U.S. is trying to do?
WALLY ADEYEMO: That is undercutting what not only the United States is trying to do but what the world has done. Russia's biggest trading partner is the EU. Forty percent of Russia's trade is with the EU. Today, the EU is implementing the most significant set of sanctions against Russia in its history. Yesterday, the United States took a number of steps that were the most significant steps against Russia that we've ever taken. I was here in 2014, and these actions are far more significant than that. They cut off Russia's access to major financial institutions around the world by cutting off their access to the dollar. And fundamentally, despite what Russia has done, 80% of their effects transactions on a day have the dollar involved in them. So these are going to have a significant impact on Russia's economy, not only now but over time.
MARTÍNEZ: So even if Russia - or since Russia tries to operate their economy with as little reliance on the dollar as possible, you think that this is still going to make a difference?
ADEYEMO: The important thing to remember is that Russian financial institutions, on a daily basis, do $46 billion worth of foreign exchange transactions. Eighty percent of those transactions still involve the United States dollar. These actions are going to have a significant impact on Russian financial institutions and their ability to pass on money to the Kremlin that they can use to fund their military.
MARTÍNEZ: But Vladimir Putin, you know, is said to have created a massive slush fund to cushion his inner circle from sanctions. And I've heard you say, Secretary, that he does not have a bank account. So how much impact can sanctions have on someone who seemingly has no direct path to his wallet so that it can be pinched?
ADEYEMO: So you're right - Vladimir Putin doesn't have a bank account. What he has is a set of elites who are around him who help to fund him personally. And what we've done and what the president has ordered us to do is to go after those elites, but not only after those elites but also after their family members who they pass their wealth onto and their known associates. So our plan is in concert with our allies and partners to take actions that will constrain their access to the financial system in order to constrain Vladimir Putin's access to their wealth.
MARTÍNEZ: Is that why Vladimir Putin is not sanctioned directly - because it would be extremely difficult to do so?
ADEYEMO: I want to make clear what the president has already said - that all options remain on the table. But the reality is that the best way for us to get at President Putin's wealth is to go after the wealth of the people who are around him and also to go after the wealth of the Russian economy. And that's exactly what we've done.
MARTÍNEZ: These sanctions will not impact payments for energy, which is one of Russia's main revenue sources and important to Europe because of their reliance on Russian energy. Is that on the table still as a way to go one step further if it comes to that?
ADEYEMO: So what the president has ordered us to do is to use our targets - our sanctions tool to target the Russian economy but to minimize the risk to the U.S. economy and to our allies. That's exactly what we're doing. We're not going to take any options off the table, but our goal is to be targeted in a way that has an impact on Russia and, not only immediately but over time, limits their ability to project power into the future.
MARTÍNEZ: If Vladimir Putin, though, decides to retaliate by, say, turning off the energy faucet to the West, I mean, how ready, Secretary, is the U.S. financially to be able to get by?
ADEYEMO: So over the course of the last several months, we've worked very closely with our allies and partners to make sure that we take all the precautions needed to prepare ourselves for this moment, including working with energy suppliers. And you've seen announcements from other countries that have talked about the willingness to provide LNG to our European partners going forward. And our goal is - our goal here is to make sure that we're in a position where we would be able to not only work alone and take actions against the Kremlin and Russia but to do it in concert with our European allies and partners. In order to do that, we have taken steps with a number of other countries to prepare ourselves for the risks here. And as the president said, they're going - there are costs. But our goal is to make sure that we mitigate those costs not only for the American people but also for our allies and partners.
MARTÍNEZ: And I think everyone realizes that with sanctions, it's going to take time for Russia to feel the bite of the sanctions. Given, though, how quickly Vladimir Putin is moving, what are you hoping to achieve in the short term?
ADEYEMO: So the Russian economy is feeling the bite of the sanctions today. When you look at the Russian stock market, for example, since the beginning of the year, when we started to make very clear what we would do in response to an invasion, the stock market is down more than 20% coming into this week and even more over the course of the last few days. The Russian ruble is the worst-performing emerging market currency in the world over the course of the last few months, and that was even before this week. So they're feeling the pain now. But the reality is, as you said, they will continue to feel the pain for months and years to come as not only their economy shrinks, but they're cut off from key technologies that will allow them to advance their military and to advance their other industries as well.
MARTÍNEZ: The president has said these measures will have as big an effect or bigger than cutting Russia off from SWIFT. That's the secure messaging service that connects more than 11,000 financial institutions around the world. Why not just go there, Secretary, and cut that off from Vladimir Putin?
ADEYEMO: As I've said, all options are on the table. Cutting off SWIFT would be a temporary disruption. What we've done is permanently cut them off from parts of the U.S. economy and from the global economy, which is exactly what we're going to continue to do to limit their ability to project power into the future.
MARTÍNEZ: That's Wally Adeyemo, U.S. deputy Treasury secretary. Thank you very much.
ADEYEMO: Thanks for having me.
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