Feb 21, 2022: According to a report by Reuters,  sources familiar with the matter said that President Joe Biden’s administration had prepared a preliminary package of sanctions against Russia, including a ban on U.S financial institutions from conducting transactions for large Russian banks.

The measures, which will only apply if Russia invades Ukraine, are aimed at damaging the Russian economy by ending “correspondent” banking relations between Russian banks and U.S banks that enable international payments. While U.S. officials have said banking sanctions will be part of a possible sanctions package, the administration’s plan to sever the relevant banking ties – which strengthens the flow of global money – has not been announced.

The U.S can place certain Russian individuals and companies on the list of Specially Designated Citizens (SDNs), effectively removing them from the U.S banking system, banning their trade with Americans, and potentially freezing their U.S assets.

The White House and Treasury Department declined to comment.

Sources said the package could change at the last minute and it was not clear who the targets would be. However, they believes that top Russian financial institutions, including VTB Bank, Sberbank, VEB, and Gazprombank, are possible targets.

According to experts, correspondent banking tool lacks the punch of an SDN designation, which freezes a bank’s assets, they could still deal a meaningful blow to the target banks by making it difficult to transact in US dollars, the global reserve currency. It is unclear whether Russian banks would be added to the SDN list, but both types of sanctions could hit Russia hard.