WASHINGTON, June 12 (Reuters) - The U.S. Treasury

Department on Wednesday announced new sanctions on over 300

entities and individuals aimed at cutting off Russia's access to

products and services needed to sustain military production for

its war in Ukraine, including dozens of Chinese components

suppliers.

The announcement, along with new Commerce Department export

restrictions on semiconductors and other technology goods, was

made on the eve of a G7 leaders summit in Italy, where efforts

to curb Russia's growing war economy will be a major discussion

topic.

U.S. officials have expressed increasing concern over

Russia's ability to procure advanced semiconductors, optical

equipment, software and other products needed to manufacture

advanced weapons systems despite prior sanctions.

The sanctions target third party firms and entities,

including dozens of suppliers of electronics in China, as well

as those in the Middle East, Africa, Europe and the Caribbean.

The action stops short of imposing secondary sanctions on banks

in China and other countries where Treasury has warned that

dealings with Russian entities could cut institutions off from

dollar access.

But the Treasury did say it was modifying the sanctions on

previously targeted Russian banks, including VTB and Sberbank,

to include branches and subsidiaries in China, India, Hong Kong,

Kyrgyzstan and other locations.

"We are increasing the risk for financial institutions

dealing with Russia's war economy and eliminating paths for

evasion, and diminishing Russia's ability to benefit from access

to foreign technology, equipment software, and IT services,"

U.S. Treasury Secretary Janet Yellen said in a statement.

Another senior U.S. Treasury official told reporters that

many large banks have pulled back from Russian business since

Treasury's new secondary bank sanctions authority went into

effect at the end of last year, but Moscow is turning to smaller

institutions with weaker compliance departments.

The official said Treasury was working to identify these

smaller banks still helping to process transactions aiding

military output and was enlisting the help of large Western

financial institutions to help that effort.

Treasury's new sanctions also open up a new front to try to

limit Russia's energy revenues by targeting entities involved in

three major liquefied natural gas projects that Russia is

working to bring online: the Obsky LNG, Arctic LNG 1 and Arctic

LNG 3 projects. These include Gazprom Invest and other

construction firms associated with the projects, equipment

suppliers and shipbuilding firms and operators of seven Russian

LNG vessels under construction.