The US Treasury Department announced on Tuesday that it would not extend the sanctions waiver that allowed Russia to make sovereign debt payments to Americans, in a move officials previously said would cause Moscow to be in technical default of its debt obligations.
The general license waiver, which is set to expire at 12:01 on Wednesday, will not be extended, said a notice posted on the Treasury website. It was a widely expected move, reported as likely by several US outlets last week and all but confirmed by Treasury Secretary Janet Yellen.
Washington had blocked Russian accounts over the conflict in Ukraine, but issued a debt waiver because Deputy Treasury Secretary Wally Adeyemo argued such payments would divert funds from the military. Moscow’s payment of debts represented a “sign of success” for US sanctions policy, Adeyemo had argued.
Russia also anticipated the move, with the finance ministry announcing last Friday it had made early payments – for a total of $99.25 million – on two outstanding Eurobonds due on May 26. This leaves Moscow with $2 billion worth of external bond payments due before the end of 2022.