The U.S. Treasury Department announced on Wednesday new sanctions against over 300 entities and people to cut off Russia's ability to access products and services necessary to maintain military production in Ukraine. This includes dozens of Chinese component suppliers.

The announcement was made along with the new Commerce Department restrictions on exports of semiconductors and technology goods on the eve a G7 summit in Italy where efforts to curb Russia’s growing war-economy will be a key discussion topic.

U.S. officials are increasingly concerned about Russia's ability, despite previous sanctions, to obtain advanced semiconductors and optical equipment as well as software and other items needed to manufacture advanced weapon systems.

Sanctions are imposed on third-party firms and entities. These include dozens of electronic suppliers in China as well as in the Middle East and Africa. The sanctions do not target secondary sanctions against banks in China or other countries, where Treasury warned that dealings involving Russian entities could prevent institutions from accessing dollars.

Treasury has said it is modifying sanctions against Russian banks that were previously targeted, such as VTB and Sberbank. This includes branches and subsidiaries located in China, India Hong Kong, Kyrgyzstan, and other places.

In a recent statement, U.S. Treasury secretary Janet Yellen stated that "we are increasing the risks for financial institutions who deal with Russia's War Economy and eliminating pathways for evasion and decreasing Russia's capability to benefit from foreign technology, software, and IT Services."

A senior U.S. Treasury Official told reporters that since the new secondary bank sanction authority came into effect in December last year, many large banks had pulled back from Russian businesses. However, Moscow has turned to smaller institutions which have weaker compliance departments.

Officials at Treasury are working to identify smaller banks that still process transactions to aid military output. They have enlisted the assistance of large Western financial institutions in this effort.

Treasury's new sanction also opens up a second front in the effort to limit Russia’s energy revenue by targeting entities that are involved in three major projects involving liquefied gas, which Russia is working on bringing online: Obsky LNG and Arctic LNG 1, Arctic LNG 3 Projects. Gazprom and other construction companies associated with the project, shipbuilding and equipment suppliers as well as operators of seven Russian LNG ships under construction are included. (Reporting and editing by Rami ayyub, Angus MacSwan and David Lawder)