UK sanctions Sberbank, Russia’s largest bank, and its sovereign wealth fund

The British government on Tuesday added Russia’s largest bank, Sberbank, and the country’s sovereign wealth fund to the list of Russian entities sanctioned in the UK, warning that the economic cost of the Ukraine invasion will only worsen for the Kremlin. .

The Russian direct investment fund, RDIF, created in 2011 by Moscow to promote foreign investment in Russia, is known, among other things, for having financed the development of the Russian vaccine against COVID-19 Sputnik V.

It is led by Kirill Dmitriev, a close associate of the Russian president who was also added to the list of people targeted by British sanctions on Tuesday.

The United States had already announced sanctions against this fund on Monday, described as “symbol of the deep corruption in Russia and its influence peddling”.

Sberbank, a part of whose capital is listed on a London stock market index dedicated to foreign shares in dollars, plunged on the British market on Tuesday, losing more than 80% of its value after falling 74% the day previous.

The European Central Bank (ECB) stated on Monday that the European subsidiary of Sberbank is “bankrupt or probably bankrupt” due to “significant” deposit withdrawals.

This decision by Boris Johnson’s executive comes after he stated on Monday that he would freeze the assets of all Russian banks.in the coming days” and order the closure of British ports to British ships.

Last week London had already put several financial institutions on this list, to which on Monday it added the Russian central bank and the Ministry of Finance.

Sberbank “will study the restrictions imposed by the United Kingdom as the documents are made public”, the Russian public giant stated in a statement published by Russian news agencies. “These measures will not have a significant influence on Russian customers, individuals and corporations.”, he added.

Deputy Prime Minister Dominic Raab said Western sanctions, including freezing Russia’s central bank assets, will cause oligarchs to step up pressure on President Vladimir Putin.

“That will starve Putin’s war machine of funds and will also put pressure on many of the oligarchs who need access to the international system and who will put pressure on Putin.”, he told BBC television.

The sanctions are not aimed at the Russian people, Raab said, after many banks saw long queues of people trying to withdraw their savings and convert them into foreign currency.

“But it is inevitable that the misfortune of Russia and Putin, their catastrophic decision, will be disastrous for the Russian people.” added. This “will show them the economic cost to them of being involved in this unjustified and unjustifiable war.”.