(Bloomberg) -- The Biden administration is poised to fully block Russia’s ability to pay U.S. bondholders after a deadline expires next week, a move that could bring Moscow closer to the brink of default.

The Treasury Department’s Office of Foreign Assets Control is expected to allow a general license that expires May 25 to lapse, according to people familiar with the matter. The waiver, issued shortly after the US levied sanctions on Russia over its invasion of Ukraine in February, has given Moscow room to keep paying investors, helping it avert default on its government debt.

Some Treasury officials had privately argued that allowing Russia to pay its debt would further drain its coffers and redirect resources that would otherwise be spent on weapons and military operations in Ukraine. But the administration has decided against extending the waiver as a way to maintain financial pressure on Moscow, the people said.

Another person familiar with the matter said that Treasury hasn’t made a final decision. Spokespeople at the White House and Treasury Department had no immediate comment.


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