LATEST coverage on the sanctions against Russia

Allied leaders have announced a new raft of sanctions this morning, taking aim at Russia’s leading financial institutions, technology providers and oligarchs close to the Kremlin.

In the early hours of the invasion, Russia’s stock market had already plummeted 45 per cent with the ruble falling to its lowest ever levels against the US dollar. This has seen the value of Russian debt balloon and the Moscow Exchange suspend trading.

However, Moscow’s financial woes are likely to compound over coming weeks with new rounds of sanctions issued by Western nations in response to the country’s invasion of Ukraine set to come into effect.

Today, President Joe Biden piled yet further pressure on the country’s banks, manufacturers and oligarchs – leaving primary institutions unable to trade in the US dollar or UK pound.

According to the White House, the new sanctions include:

• Removing any remaining financial ties between Russia’s largest bank, Sberbank and its 25 subsidiaries with the US by limiting “Sberbank’s access to transactions made in the dollar”;
• Placing “full blocking sanctions” on Russia’s second largest bank VTB and its 20 subsidiaries, as well as Bank Otkritie, Sovcombank OJSC and Novikombank and their 34 subsidiaries;
• 13 of the country’s largest companies would also see new debt and equity limitations placed on them. According to the White House, “these entities, including companies critical to the Russian economy with estimated assets of nearly $1.4 trillion, will not be able to raise money through the US market — a key source of capital and revenue generation, which limits the Kremlin’s ability to raise money for its activity”;
• The new US sanctions also target Kremlin insiders and Russian oligarchs. A White House communique explained that “this action follows up on yesterday’s action targeting Russian elites and their family members and cuts them off from the US financial system, freezes any assets they hold in the United States and blocks their travel to the United States”;
• Belarus has also been targeted by the United States throughout this round of sanctions for supporting the invasion, with 24 Belarusian insiders – from military heads to financial institutions – sanctioned by the government; and
• The White House confirmed that US technology would also be embargoed from Russia for all dual military-commercial use products.

In an address from the East Room, President Biden described the broad impact that the US’ measures would have on the Russian economy .

“In today’s actions, we have now sanctioned Russian banks that together hold around $1 trillion in assets,” President Biden explained.

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“We’ve cut off Russia’s largest bank — a bank that holds more than one third of Russia’s banking assets by itself — cut it off from the US financial system.

“As promised, we’re also adding names to the list of Russian elites and their family members that are sanctioning — that we’re sanctioning as well.

“As I said on Tuesday, these are people who personally gain from the Kremlin’s policies and they should share in the pain. We will keep up this drumbeat of those designations against corrupt billionaires in the days ahead.”

The US collaborated closely with other G7 partners to coordinate the sanctions.

This morning, Prime Minister Boris Johnson addressed Commons to describe Britain’s new round of sanctions against Russia, targeting many of the same key nodes as their US counterparts.

Under the new sanctions, PM Johnson has announced that the UK’s subsequent round of sanctions include:

• Isolating and removing essential Russian businesses from operating within the British financial sector, the largest financial sector in Europe;
• A freeze on all Russian bank assets in the United Kingdom;
• A new swathe of export controls placed upon Russian industry, including the cessation of trade for dual-use products; and
• Seizing hundreds of billions of pounds in assets from Russian oligarchs, with an estimated 100 individuals and businesses having their assets frozen as well as the establishment of a new financial enforcement agency to find hidden assets in the UK.

“At the G7 meeting this afternoon, we agreed to work in unity to maximise the economic price that Putin will pay for his aggression, and this must include ending Europe’s collective dependence on Russian oil and gas that has served to empower Putin for too long so I welcome again Chancellor Shultz’s excellent decision to halt the certification of Nord Stream 2,” PM Johnson told Commons.

“Mr Speaker, countries that together comprise about half the world economy and now engage in maximising pressure – economic pressure – on one that makes up a mere 2 per cent.

“For our part today, the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen.”

PM Johnson explained that isolating Russia from the British financial system would have severe impacts on the Russian economy, with London “by far the largest [financial sector] in Europe”. This is expected to include a freeze on the ability for leading Russian companies to trade in US dollars and UK pounds, making up almost half of Russia’s current trade.

Like the US, it is expected that sanctions would also be extended to Belarus for their role in the recent invasion.

PM Johnson further warned Commons that “nothing is off the table” regarding further sanctions to Russia, refusing to rule out whether Russia would be removed from the SWIFT transaction system.

Not only has the United Kingdom targeted leading financial institutions throughout the recent sanctions, but even the country’s flagship brands and Kremlin insiders. Russia’s leading airliner, Aeroflot, has been banned from flying to the United Kingdom while PM Johnson announced the creation of a new “kleptocracy cell” to find hidden Russian assets in the country.

The remarks were broadly supporting by Her Majesty’s Opposition.

“That means doing all that we can to help Ukraine defend herself, by providing weapons, equipment and financial assistance as well as humanitarian support for the Ukrainian people,” Sir Keir Starmer said.

Australia is also expected to shortly announce further sanctions to Russia.

"Today, Australia will be imposing further sanctions on oligarchs whose economic weight is of strategic significance,” Prime Minister Scott Morrison said.

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