US national security adviser on massive hack: We're looking beyond sanctions

Washington (CNN)The Biden administration targeted Russia with sweeping sanctions and diplomatic expulsions Thursday, punishing Moscow for its interference in the 2020 US election, its SolarWinds cyberattack and its ongoing occupation and “severe human rights abuses” in Crimea.

The announcement is one of a series of dramatic foreign policy steps that President Joe Biden has taken this week, along with the decision to withdraw all troops from Afghanistan and send an unofficial delegation to Taiwan to express support for its democracy and security, in what may signal a turn toward a tougher, more pragmatic global posture for the US.
Thursday’s sanctions come a day after Secretary of State Antony Blinken, speaking for the US and its NATO allies, expressed deep concerns about Russia’s military build-up along the border with Ukraine, and two days after the US intelligence community said in an annual report that Russia “presents one of the most serious intelligence threats to the United States.”

Biden is expected to speak on the sanctions on Thursday afternoon Washington time.

As part of Thursday’s announcement, the US formally named the Russian Foreign Intelligence Service as the force behind the SolarWinds hack that affected the federal government and wide swaths of the private sector. The White House also said that it is expelling 10 Russian diplomats in Washington, including “representatives of Russian intelligence services,” for the cyber hack and the election meddling.

US officials made clear that while the President would prefer not to, he was poised to take further action if needed. For its part, the Kremlin summoned the US ambassador to Russia to the foreign ministry for what it described as a “difficult” conversation and said its response to the US measures will come shortly.

‘Credible response’

National security adviser Jake Sullivan told CNN’s John Berman on “New Day” that Biden was aiming to strike a balance and “provide a significant and credible response, but not escalate the situation.”
Biden, who spoke to President Vladimir Putin by phone on Tuesday to preview the sanctions, “made no bones about the fact we will be taking actions this week, but he also indicated that he wants to get to that stability in this relationship, and he believes that if President Putin is prepared to do that as well, we can find a course ahead that does not lead to a cycle of confrontation,” Sullivan said.
“We believe that altogether, both the actions we are taking today and that broader diplomacy can produce a better set of outcomes for US-Russia relations,” Sullivan said.
Sullivan said that Biden and Putin “were direct with one another, they understood one another” during the call, and that Biden proposed that he and the Russian leader hold a summit “to discuss all of the issues facing our relationship.”
Biden believes the US and Russia can have a “stable and predictable relationship” and work together on issues such as arms control, Sullivan said.
The administration rolled out the sanctions in an executive order in coordination with the State Department and the Treasury Department. State Department officials had called US allies to prepare them for the announcement, which covers a wide range of actions.

The Biden administration is barring US financial institutions from participating in the primary market for bonds issued by Russia’s central bank and other leading financial institutions. While US financial institutions weren’t big buyers of Russian bonds, “it’s going to bite,” said Gary Hufbauer, a former Treasury official and senior fellow at the Peterson Institute for International Economics. By driving down bond prices, and pushing interest rates up, “it will make it more expensive to keep the country running,” he said.
The US will also sanction six Russian tech companies that support the Russian intelligence services’ cyber program, as well as 32 entities and individuals for carrying out “Russian government-directed attempts to influence the 2020 US presidential election,” it said in a fact sheet. Another eight individuals and entities are being sanctioned for “Russia’s ongoing occupation and repression in Crimea.”
The administration also named the Russian Foreign Intelligence Service, known by its acronym SVR, and as APT 29, Cozy Bear and the Dukes, as the perpetrator of the hack of SolarWinds, which gave it the ability to spy on more than 16,000 computer systems worldwide, the White House said. On Thursday, the administration issued an advisory providing network defenders with specific steps they can take to identify and defend against “the SVR’s malicious cyber activity.”
The 10 Russian diplomats who are being expelled are based in Washington, DC, and New York, and will have 30 days to leave the country, a US official familiar with the plans explained. Asked how the US chose the 10 diplomats who will be expelled, a senior administration official told reporters Thursday that those individuals “were acting with a manner inconsistent with their status in the US,” and declined to provide further details.
The White House said that it was not imposing punishment for reports that Russia encouraged Taliban attacks against US and coalition troops in Afghanistan because the US intelligence community has only “low to moderate confidence” that Russia offered bounties, the senior administration official said.
The intelligence only reaches a “low to moderate” confidence level because the intelligence agencies relied on reporting from detainees and was collected in a “difficult operating environment” in Afghanistan, the official said.

Will the sanctions impact Putin’s behavior?

Hufbauer said Thursday’s steps add “more heft to the existing sanctions, but will it make any difference to the Russian government? Probably not much.” He noted that “the previous sanctions did not persuade Russia to leave Crimea nor withdraw their forces from eastern Ukraine. The most we can hope for is that Russia will not go into new adventures into what the Russian government calls ‘the near abroad.'”
The senior administration official said further potential actions are built into the orders Biden approved, adding that the US would “prefer” not to use those options, but wanted to send the signal it is “prepared going forward” to respond if Russia takes provocative steps.

Russian Foreign Ministry spokeswoman Maria Zakharova said US Ambassador John Sullivan had been summoned to the ministry following news of the sanctions and expulsions, and said the conversation would be a “difficult” one. Sullivan declined to comment to journalists as he left the ministry Thursday, but Zakharova said Moscow will announce its response in the near future.
“Our response is inevitable, it will be worked out,” Zakharova told reporters. “You will hear about it shortly, I think. Our experts are working on it right now.”
The US sanctions rollout has taken longer than anticipated because the White House was not satisfied with the options the State Department initially presented and wanted more expansive measures, a US official familiar with the plans said. During Biden’s first week in office, the White House announced it would be undertaking an intelligence review of Russia’s “reckless and adversarial actions” in a wide variety of areas.
It is unclear if Thursday’s sanctions will be enough to change Russian behavior, the officials said.
The Biden administration vowed early on to respond to Russia’s aggressions against the US and its allies.
During his first phone call with Putin in March, Biden confronted the Russian leader over a range of issues, from the recent massive cyberattack to the suspected poisoning of the country’s leading opposition figure, Alexey Navalny. The Biden administration has already rolled out sanctions for Navalny’s jailing and poisoning.

Even as it hits back at Russia, the Biden administration has sought to keep open channels of diplomatic communication and to work with Russia when it is in the US’ interest. The Biden administration recently decided to keep the Trump-appointed US ambassador on the job in Moscow for the foreseeable future, and the President has invited Putin to a climate change conference later this month as well as the summit to discuss US-Russia relations.
This story has been updated with additional reporting.
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