Exclusive: Treasury official to say US monitoring and countering Russian intelligence services as part of sanctions crackdown

(CNN) Deputy Treasury Secretary Wally Adeyemo plans next week to put Russia and its intelligence services on notice: the US is monitoring their efforts to circumvent US sanctions and is cracking down.

“As we look forward, one of the centerpieces of our strategy will be to counter attempts to evade our sanctions,” Adeyemo will say in remarks Tuesday at the Council on Foreign Relations, according to excerpts of his speech obtained by CNN. “We know Russia is actively seeking ways to circumvent these sanctions. … In fact, one of the ways we know our sanctions are working is that Russia has tasked its intelligence services — the FSB and GRU — to find ways to get around them.”

Adeyemo, the department’s No. 2, will deliver the remarks ahead of the first anniversary of Russia’s invasion of Ukraine, reflecting on the US-led efforts to destabilize the Russian economy and push crushing sanctions to undermine President Vladimir Putin’s ability to wage war.

“A big piece of this is information and intelligence sharing, which is something we started doing even before Russia’s invasion,” Adeyemo said in an interview with CNN. “So, mapping out an evasion network that allows us to look across jurisdictions to share information, and then take action is a big piece of this.”

His remarks come as the Kremlin increasingly turns to its clandestine services to avoid Western sanctions.

Since Russia launched its bloody war against Ukraine, the US has imposed thousands of sanctions against Russian politicians, oligarchs and companies, cut off the Russian central bank from its dollar-denominated reserves as well as the global financial messaging system, undermined Russia’s defense-industrial base and imposed a price cap on Russian oil and petroleum products.

“The thing that we are doing with our colleagues at Commerce is we’re slowing Russia down and our colleagues at the Defense Department are speeding the Ukrainians up. So they’re getting them the arms they need to fight off Russia in their country while Commerce and Treasury are slowing down Russia’s ability to rearm. We’re already seeing a big impact,” Adeyemo told CNN.

In excerpts of his remarks, Adeyemo makes the case that sanctions and export controls from the US and its allies have degraded the Russian economy.

“Last year, rather than the forecasted budget surplus, Russia suffered a budget deficit of $47 billion dollars. This was the second highest deficit the country has experienced in the post-Soviet era. Industrial production has declined in Russia for 9 straight months, and we are planning to take further actions to further decimate the Kremlin’s industrial base,” Adeyemo will say.

Despite the impact sanctions have had on the Russian economy, some observers have pointed to concerns over Moscow’s ability to evade sanctions and re-orient trade routes to continue to acquire some of the technologies and financing needed to fund its war machine through countries like Turkey, the United Arab Emirates and India.

“Spending the country’s savings can hide the damage for now, but our actions are forcing Russia to mortgage its economic future to save face today. Of course, we have more work to do, and we will continue to do more until Russia’s ceases its baseless and illegal invasion. But one year into this conflict, Russia’s economy looks more like Iran’s than a G-20 country,” Adeyemo will say.

Adeyemo’s remarks come on the heels of Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson’s trip to the UAE and Turkey last month where he outlined how the department is working to “crack down” on Russian attempts to evade sanctions and export controls, as well as warn that there are consequences for working with sanctioned entities or not conducting proper due diligence.