The latest sanctions imposed on Russia by the United States and the United Kingdom represent a significant scaling-up and are obviously made in close cooperation.
The decision to approve Vladimir Putin’s two adult daughters and the wife and daughter of his foreign minister, Sergei Lavrov, will undoubtedly do much, but perhaps the most significant step is to impose additional measures on Russia’s largest lender, Sberbank.
While the UK has seized an asset over Sberbank and Credit Bank of Moscow, another Russian bank, the United States, has advanced what it calls a “complete blocking ban” against both Sberbank and Alfa Bank (Russia’s largest private bank). .
These companies will no longer be able to transact with any American person or organization in any country and in any currency. This is a measure of approval for some of the treatment that Washington has given to Iranian banks in the past.
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These measures have proven to be very effective in hurting Iran’s economy, and the Biden administration will obviously expect similar results here. Russia already The recession is far more severe than what was experienced during the epidemic And this will exacerbate his difficulties.
Surprisingly, the United States and the United Kingdom have imposed a uniform embargo on any new domestic investment in Russia, another move that would hurt Moscow on an ongoing basis.
The United Kingdom invested more than 11 11 billion in Russia alone in 2020, with the United States investing $ 14.4 billion (£ 11 billion) in Russia in 2019 and another .5 12.5 billion (£ 9.5 billion) the following year.
These are large sums that would deprive the Putin government of the opportunity to grow again. Importantly, it will also deprive Moscow of intellectual property and learn how it can encourage the development of productivity in the country.
A White House official did not comment this afternoon [Russia] Coming down into economic and financial and technological isolation. And at that rate, it will return to Soviet-style life in the 1980s. “
The embargo on Russian energy exports is also significant. The United States has already imposed a complete ban on Russian oil and gas imports The EU announced yesterday that it was banning Russian coal imports But so far Russia has been reluctant to impose sanctions on oil – which it imports 2.3 million barrels per day – or Russian gas.
The United Kingdom, after its last salvo, is now sitting somewhere in the middle. There is no Russian coal – low prices have contributed to early shutdowns of Britain’s remaining deep coal mines in the last few years – or Russian oil will enter the UK by the end of 2022 when Russian gas imports will be stopped “as soon as possible”. .
It is worth noting to the EU that such sanctions are easy for the United Kingdom and the United States to implement because of their relatively low reliance on Russian energy sources.
For the EU and its most important economy, Germany, it would be really painful to impose similar sanctions.
German Federal Finance Minister Christian Lindner has said that a ban on Russian gas would do more harm to Germany than harm to Russia.
The latest set of target oligarchs with asset seizures and travel bans is also not meaningless although, again, the UK appears in some cases to already have bans on individuals targeted by the United States, or the EU, or both.
Sergei Ivanov, for example, President of Alrosa, the world’s largest rough diamond producer And whose father was Mr. Putin’s former comrade in the KGB, has already been targeted by the United States. Similarly, Andrei Guriev, founder and chairman of the fertilizer giant FosAgro, was approved by the EU about a month ago.
However, he acknowledged that their numbers were not enough to defeat Putin’s government. Explains why his daughters were also targeted.
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In the round, then, it is a big punishment for Russia.
However, there is a growing perception that the United States, the United Kingdom and the EU have moved forward as much as possible without hurting their own economies – although some corporates, such as BP, have already made very financially-painful decisions. The ‘simplify’ ban has now been imposed.
Yet there is much more that can be done. The head of the EU’s foreign policy, Joseph Borel, said today that the EU had provided bn 35bn (£ 29bn) in oil and gas to Russia since the war began.
At one point, if Putin’s war against Ukraine is to end, European Union sanctions on Russia’s oil and gas are essential.
Even that may not be enough to deprive the Putin government of financial oxygen.
China buys more fuel from Russia than the EU – and it shows no sign of joining the West in punishing Mr Putin for his brutality.