The international community finds, for the moment, only one viable response to Russia’s military offensives in Ukraine: financial sanctions.
Since the 2014 invasion of Crimea, Moscow’s hostile actions toward its neighbor have drawn economic punishment from the United States, the European Union and their allies.
The goal is to make financial transactions difficult for Russia and thus put pressure on the government of Vladimir Putin to give up its extraterritorial claims.
Following Thursday’s large-scale invasion, several countries and institutions have announced new measures against Moscow.
Time will tell if they are effective or not.
US: Russian banks in the spotlight
“Putin chose this war and now he and his country will bear the consequences,” US President Joe Biden said in response to the latest attack ordered by his Russian counterpart.
Biden assured that his country’s new sanctions “will impose a severe cost on the Russian economy, both in the short and long term.”
With the aim of further excluding Russia from the world financial system, the new sanctions target the “core infrastructure” of its financial system, according to the report presented by the US Treasury Department.
One of them is the freeze of US assets of Russia’s two largest banks: Sberbank and VTB Bank.
US banks have 30 days to break their correspondent ties (which allow transactions to be processed around the world) with Sberbank, Russia’s main bank.
Meanwhile, VTB Bank owns almost 20% of the country’s banking assets and is majority owned by the Russian government, so the sanctions are expected to deal a heavy financial blow to the Kremlin.
Three other banks are added to the above: Otkritie, Novikombank and Sovcombank, as well as dozens of subsidiary entities.
In practice, the measure expels the five banks from the US financial system, prohibits their trade with Americans and freezes its assets in the North American country.
The US sanctions also cover two Belarusian state financial entities: Belinvestbank and Bank Dabrabyt.
They also include six individuals: two top bank executives and six members of families close to Putin.
Biden also proclaimed new restrictions on Russian high-tech exports, seeking to weaken its military sector in the medium and long term.
The United States also announced this Thursday sending 7,000 more soldiers to Germanyas well as the expulsion of the Minister Counselor of the Russian Embassy in Washington, Sergei Trepelkov.
The EU: “the toughest package of sanctions”
The leaders of the European Union held an emergency summit in Brussels on Thursday in which they condemned the invasion of Ukraine and decreed new sanctions against Russia.
The High Representative of the Union for Foreign Affairs and Security Policy, Josep Borrell, assured that it is the “toughest package of sanctions that we have ever implemented”.
The group of 27 will freeze Moscow’s assets in the EU and block Russian banks’ access to European financial markets.
The sanctions also target Russia’s strategic sectors, such as transportation and energy, by imposing export controls.
In an appearance at dawn this Friday, the president of the European Commission, Ursula Von der Leyen, expanded the information on the bloc’s battery of sanctions on Russia, which she described as “massive” and affect several sectors:
- Finance: The access of 70% of banking institutions and some key public companies to the main financial markets is cut off.
- Energy: The export of crucial equipment for the oil sector is prohibited, which will make the updating and modernization of refineries “impossible”.
- Aviation: The sale of equipment to commercial airlines is prohibited. Two-thirds of the Russian fleet was built in the EU, the US or Canada.
- Technology: Russia’s access to key technology such as semiconductors is limited.
- visas: Russian diplomatic personnel and businessmen lose the “privileges” they enjoyed to enter the European Union.
for now Russia is not excluded from the Swift code for international transfers, as some members of the group and Ukraine had suggested.
These sanctions are added to a first package announced last Tuesday, after Russia intensified its military offensive against the neighboring country.
The EU then imposed sanctions on the 351 members of the Duma, which gave the green light to the intervention, as well as on 27 other individuals and entities that contributed to it, although it excluded Putin himself.
Previously, Germany blocked the certification of the Nord Stream 2 gas pipeline, which was expected to transport Russian gas to the European country.
United Kingdom: banks, billionaires and airlines
UK Prime Minister Boris Johnson announced a series of sanctions targeting Russian banks, billionaires and airlines.
Like Biden, he decreed the freezing of assets of the main Russian banks.
It also announced the imminent ban on landing in the UK for planes from Aeroflot, the main Russian airline in which the state has a majority stake of 51%.
A new law that will come into force on Tuesday will prohibit the Russian government from acquiring sovereign debt in the British markets.
He also announced new legislation to prevent major Russian corporations from obtaining financing in the UK.
This country will also impose sanctions on more than 100 people, entities and their subsidiaries.
Among the companies, Rostec, the largest Russian defense corporation, stands out, and one of the sanctioned billionaires is Kirill Shamalov, Putin’s ex-son-in-law.
Exports of goods with possible military use, from electrical components to spare parts, are also banned. Other products such as semiconductors, aircraft parts and oil refining equipment will be added in the coming days.
Deposits of Russian citizens in UK bank accounts will be limited to 50,000 pounds ($67,000).
The previous sanctions also apply to Belarus for his participation in the Russian invasion of Ukraine.
Canada: tightening of sanctions
Canadian Prime Minister Justin Trudeau condemned what he called “unprovoked and unjustified attack” and announced new sanctions on 62 Russian entities and individuals, including banks and the country’s elite.
Along with allies such as the US, Canada imposed a first round of economic sanctions on Russia on Tuesday. It also contributed up to 460 soldiers to the NATO mission in Eastern Europe.
While Trudeau said Thursday that Canada would respond “forcefully” to Russia’s aggression, he did not say whether his government was considering deploying the military directly to Ukraine.
Canada has one of the largest populations of Ukrainian immigrants in the world.
In the same session, Canadian Foreign Minister Chrystia Freeland, who is Ukrainian-Canadian, spoke about the diaspora.
“To my own Ukrainian-Canadian community, let me say this: It’s time to be strong while supporting our friends and family in Ukraine,” he said, before breaking into Ukrainian.
Japan and Australia
In the case of Japan, Prime Minister Fumio Kishida announced his country’s sanctions against Russia and assured that more details will be released in the coming days.
The Japanese sanctions consist of prohibit the issuance of Russian bonds in Japan and freeze the assets of individuals from the Slavic country in Japanese territory, according to Kishida.
The prime minister also assured that there will be restrictions on travel between Russia and Japan.
Australia, for its part, published a list with the names of eight Russian officials linked to President Vladimir Putin.
The members of this list including former President Dimitri Medvedevare subject to travel bans and asset freezes.
Australian Prime Minister Scott Morrison has said there will be a second set of sanctions in the coming weeks and these will affect other senior Russian officials.
Source: Eluniverso
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