Biden to bar Americans from business with Ukraine rebels after Putin backing

President Biden on Monday barred Americans from doing business in two separatist regions of eastern Ukraine and a US official said more sanctions are coming Tuesday after Russian President Vladimir Putin recognized the areas as independent.

Putin lamented the Soviet Union’s collapse as he recognized the Donetsk People’s Republic and Luhansk People’s Republic in rambling remarks feared to be a prelude to a large-scale war.

White House press secretary Jen Psaki said in a statement that the US had “anticipated a move like this from Russia and are ready to respond immediately.”

In addition to preventing Americans from performing “investment, trade, and financing” in the two territories, an executive order from Biden gives the Treasury Department “authority to impose sanctions on any person determined to operate in those areas of Ukraine,” Psaki said.

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The statement did not cite the current amount of US investment in the war-torn breakaway republics. It is likely small due to low-intensity fighting that began in 2014 following Russia’s annexation of Crimea.

Psaki added that the White House would soon announce “additional measures related to today’s blatant violation of Russia’s international commitments” and said the steps announced Monday were separate from the “swift and severe” sanctions promised if Russian forces “further invade Ukraine.”

A US official told reporters on a conference call Monday evening that “we’re going to take additional sanctions action tomorrow. And if Russia takes further actions, I suspect there will be further responses to those actions.”

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The official slammed Putin’s nationalist address — in which the Russian leader referred to eastern Ukraine as “ancient Russian lands” — as “an attack on the very idea of a sovereign and independent Ukraine.”

“[Putin] made clear that he views Ukraine historically as part of Russia, and he made a number of false claims about Ukraine’s intentions designed to excuse possible military action,” he said. “This was a speech to the Russian people to justify a war. In fact, he once again explicitly threatened one.”

The official also said Biden’s potential summit with Putin to talk through the crisis was probably off. The White House said Sunday that Biden had agreed “in principle” to the idea after French President Emmanuel Macron tried to coax the two leaders to meet.

“I certainly can’t commit to a meeting that has as a predicate that Russia won’t take military action when it looks as imminently like they will,” the official said.

However, it remained unclear what would provoke potentially harsh US sanctions that could target Putin’s personal wealth and Russian government entities.

The Biden administration official noted to reporters that Russian troops have operated in the Donetsk and Luhansk regions since 2014, despite Putin’s claims to the contrary. 

When a reporter asked whether that meant the US would not apply sanctions if Russian troops openly enter the rebel-held areas but advance no further, the official said that he simply had “reminded people that separate from that consideration [of new sanctions] that there had been Russian troops in the Donbas for eight years now.”

“Russia has denied this, but now Russia looks like it’s going to be operating openly in that region and we’re going to be responding accordingly. We’ll have more steps to announce tomorrow,” he said.

Biden and pro-Western Ukrainian President Volodymyr Zelensky spoke Monday for about 35 minutes shortly after 2 p.m. following Putin’s widely-watched speech.

Zelensky tweeted that he and Biden “[d]iscussed the events of the last hours,” without elaboration.

Biden also held a joint call Monday afternoon with Macron and German Chancellor Olaf Scholz.

The White House has for weeks accused Putin of scheming to invade Ukraine, citing a buildup of up to 190,000 Russian troops along Ukraine’s border.

Biden was vice president in 2014 when Putin previously fomented war in eastern Ukraine, citing the grievances of ethnic Russians after a popular uprising deposed Ukraine’s pro-Russian President Viktor Yanukovych.

Biden threatened “severe” sanctions against Moscow in recent remarks, but US officials reportedly decided against kicking Russia out of the SWIFT global financial system in retribution for an invasion.

Earlier this month, Biden vowed to penalize Russia by blocking operation of the Nord Stream 2 natural gas pipeline, which is poised to begin piping fuel directly to Germany via the Baltic Sea rather than through Ukraine.

“If Russia invades — that means tanks or troops crossing the border of Ukraine, again — then there will be no longer a Nord Stream 2,” Biden said at a Feb. 7 press conference with Scholz, who appeared notably less enthused about the threat. The German chancellor said “we are absolutely united” but pointedly refused to say the words “Nord Stream 2.”

Biden horrified Ukrainian officials last month when he said that a “minor incursion” by Russia into Ukraine might result in less-severe penalties. One Ukrainian official said that the remark could give Putin a “green light” to invade.