*

Sanctions freeze Gazprombank's U.S. assets, ban trade with

Americans

*

Treasury sanctions 50 Russian banks to limit international

financial ties

*

Yellen: Action hinders Kremlin's military funding and

equipment

acquisition

By Timothy Gardner, Daphne Psaledakis

WASHINGTON, Nov 21 (Reuters) - The U.S. imposed fresh

sanctions on Russia's Gazprombank on Thursday, the Treasury

Department said, wielding its most powerful sanctioning tool

against the bank as President Joe Biden steps up actions to

punish Moscow for its invasion of Ukraine before leaving office

in January.

The move effectively kicks Gazprombank - one of Russia's largest

banks - out of the U.S. banking system, bans their trade with

Americans and freezes their U.S. assets.

Gazprombank is partially owned by Kremlin-owned gas company

Gazprom. Since Russia's invasion in February 2022,

Ukraine has been urging the U.S. to impose more sanctions on the

bank, which receives payments for natural gas from Gazprom's

customers in Europe.

The fresh sanctions come days after the Biden administration

allowed Kyiv to use U.S. ATACMS missiles to strike Russian

territory. On Tuesday, Ukraine fired the weapons, the longest

range missiles Washington has supplied for such attacks on

Russia, on the war's 1,000th day.

The Treasury also imposed sanctions on 50 small-to-medium

Russian banks to curtail the country's connections to the

international financial system and prevent it from abusing it to

pay for technology and equipment needed for the war. It warned

that foreign financial institutions that maintain correspondent

relationships with the targeted banks "entails significant

sanctions risk."

"This sweeping action will make it harder for the Kremlin to

evade U.S. sanctions and fund and equip its military," said

Treasury Secretary Janet Yellen. "We will continue to take

decisive steps against any financial channels Russia uses to

support its illegal and unprovoked war in Ukraine."

Gazprombank and the Russian embassy in Washington did not

immediately respond to requests for comment.

Along with the sanctions, Treasury also issued two new

general licenses authorizing U.S. entities to wind down

transactions involving Gazprombank, among other financial

institutions, and to take steps to divest from debt or equity

issued by Gazprombank.

The sanctions were imposed under a Biden executive order. It

was not immediately clear whether President-elect Donald Trump

could remove them if he decided to take a different stance on

Russia.

After the invasion in 2022, the Treasury placed debt and equity

restrictions on 13 Russian firms, including Gazprombank,

Sberbank and the Russian Agricultural Bank.

The U.S. Treasury has also worked to provide Ukraine with

funds from windfall proceeds of frozen Russian assets.

Gazprombank is a conduit for Russia to purchase military

materiel in its war against Ukraine, the Treasury said. The

Russian government also uses the bank to pay its soldiers,

including for combat bonuses, and to compensate the families of

its soldiers killed in the war.

The administration believes the fresh sanctions improve

Ukraine's position on the battlefield and ability to achieve a

just peace, a source familiar said.