In a decisive move to address Russia's continued military aggression and circumvention of international sanctions, President Joe Biden signed an executive order on Friday expanding financial penalties on foreign banks connected to the U.S. financial system. The order aims to impede Russia's ability to bolster its military capabilities, ultimately putting pressure on its supply chain.

Under the executive order, foreign banks are warned against engaging in "significant transactions relating to Russia's military industrial base," with the consequence of potentially losing access to the American financial system. The goal is to disrupt Russia's supply chain, considered one of the most effective methods to slow down their military build-up.

This action comes as the two-year anniversary of Russia's full-scale invasion of Ukraine approaches, which commenced on February 24, 2022. Despite earlier expectations that international sanctions would cripple Moscow's capacity to wage war, Russian President Vladimir Putin has proven remarkably resilient, finding ways to endure the economic impact. In 2022, Russia's economy contracted by just over 2 percent, significantly less than the predicted 15 percent decline.

The executive order seeks to plug the loopholes Russia has exploited to access materials blocked by international sanctions. To achieve this, foreign banks will be held accountable for closely scrutinizing significant transactions involving front companies or intermediaries that ultimately benefit the Russian military. By making financial institutions responsible for their business choices, the order aims to discourage engagement with Russia's military-industrial complex.

Additionally, the executive order aims to prevent the importation of specific Russian exports into the United States. Diamonds and seafood, in particular, may be modified in third countries to mask their origin. In the forthcoming months, the U.S. and partner nations plan to implement import restrictions on certain diamonds mined, processed, or produced in Russia. This builds upon the existing U.S. ban on the importation of Russian-origin diamonds, extending the prohibition even if the products undergo transformation in a third country.

Furthermore, the ban will encompass certain products harvested in Russian waters or by Russia-flagged vessels. This comprehensive approach seeks to curtail Russia's ability to profit from exports connected to its military-industrial complex, ultimately weakening its ability to fund further military endeavors.

President Biden's executive order reflects the ongoing determination of the United States and its Group of 7 partners to apply pressure on Russia and discourage its military aggression. By expanding sanctions and closing loopholes, the aim is to impose substantial economic costs on Russia, ultimately compelling a change in behavior and ending its destabilizing actions.

As the international community monitors the impact of these expanded sanctions, all eyes will be on how Russia responds and if this latest effort will effectively impede its military build-up and curtail its ability to wage war.