GRAND OVERVIEW OF SANCTIONS: Tough EU intervention! Cutting off SWIFT and freezing reserves, there is another package in the game – Topky.sk

None of the measures against Russia have been talked about in recent days as much as exclusion from SWIFT. It is also referred to as the “financial atomic weapon” and the West itself did not have a unified position on whether to actually take such steps.

Exclusion of Russia from the SWIFT system

It is clear that it will harm both parties. The Germans were reluctant, among others. However, there was a significant turnaround on Saturday – not only Germany but also Hungary, Italy and Cyprus changed their minds. Russia’s exclusion from the SWIFT system has thus taken on a real dimension. The definition finally fell on Saturday night to Sunday, when the European Commission proposed to lead the leaders of the member states of the Union to remove a number of Russian banks from SWIFT. This was announced by the head of the EC Ursula von der Leyen. The European Union is moving in coordination with the United States, Canada and the United Kingdom.

Von der Leyen also unveiled new sanctions to weaken Moscow’s ability to finance the war and continue to isolate Russia from the global economy. Another meeting of European Union foreign ministers should take place today.

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Ursula von der Leyen and Charles Michel
Source: SITA / AP Photo / Geert Vanden Wijngaert, File

For a few days now, there has been talk that the European Union is preparing to adopt a third package of anti-Russian sanctions in order to weaken Russia’s financial or energy sector and prevent Vladimir Putin and several Russian oligarchs from accessing property in EU member states.

In addition, the United States should consider imposing sanctions on the Russian Central Bank, which would prevent Moscow from accessing its foreign exchange reserves. The measure would lead to the collapse of the ruble, hyperinflation and paralyze the Russian economy as well as the financial system. This would be one of the toughest measures, as opposed to being cut off from SWIFT.

Russia has been facing sanctions for years

Pressure on Russia through sanctions is nothing new. They were imposed on Ukraine after Crimea annexed in 2014. These still last. The European Union decided to extend them until the end of July on 13 January this year. At that time, fears of a Russian attack on Ukraine were growing. At the same time, European officials blamed Putin for not fulfilling its obligations to Ukraine under the Minsk peace agreements. They are aimed at Russia’s financial, energy and defense sectors, as well as against goods that can be used for both civilian and military purposes.

On 21 February 2022, a few days ago, the European Union spoke of further sanctions. This time, they were targeted at individuals involved in the “illegal act” of Russia’s recognition of separatist areas in eastern Ukraine – the Donetsk People’s Republic (DDR) and the People’s Republic of Luhansk (LRR) as independent states. A day later, the Member States agreed on them unanimously. Sanctions, including the freezing of assets and a visa ban, also apply to 351 members of the lower house of the Russian parliament who supported the recognition. The new sanctions list included 27 individuals and legal entities, including banks financing Russian operations in Donbas.

Only a few days passed and the European Union approved another package of sanctions – the reason was clear. On the night of February 24, Russia invaded Ukraine. They approved the sanctions that day, Thursday. They consist of five basic pillars. The first is the financial sector – Russia’s access to the most important capital markets is to be limited. It will focus on 70 percent of the Russian banking market, but also on key state-owned companies, including defense. These sanctions will increase Russia’s borrowing and inflation costs and gradually disrupt Russia’s industrial base. “We are also targeting the Russian elite – we will limit its deposits so that it can no longer hide its money in safe ports in Europe,” they added.

The second area concerns energy, where the export ban is to affect oil. “Russia will not be able to modernize its oil refineries,” they claim. They also pointed out that Russia’s oil revenue in 2019 was € 24 billion.

Sanctions are also expected to affect transport by banning the sale of aircraft, spare parts and equipment to Russian airlines. “Three-quarters of Russia’s current commercial air fleet has been built in the European Union, the United States and Canada. That is why they are highly dependent on her, “ recalled.

Another pillar is export control in the form of a ban on its financing and restricting Russia’s access to key technologies such as semiconductors and high technology.

Sanctions also affect visa policy. “Diplomats and related groups, as well as entrepreneurs, will no longer have privileged access to the European Union,” stated.

US sanctions

Sanctions have also come from the United States. They were imposed on Russian banks and oligarchs, as well as on Russian national debt. “We have cut off the Russian government from Western funding,” said the American president. The sanctions will affect both Russia’s “military bank” and its state development bank VEB. Biden also signed an order banning Americans from investing and trading in separatist republics.

The new sanctions also target the head of Russia’s FSB secret service Alexander Bortnikov and his son Denis, as well as Deputy Personnel Director of Putin’s Office Sergei Kiriyenko and his son Vladimir, who is the director of the VK Group, which owns the Vkontakte social network. Another person is the executive director of Promsvjazbank Pjotr Fradkov.

“We have cut off Russia’s largest bank, which itself owns more than a third of Russia’s bank assets. We have cut it off from the US financial system. And today we are blocking four other big banks. This means that every asset they have in America will be frozen. It includes VTB – the second largest bank in Russia, which has assets worth $ 250 billion, ” Biden announced. They have been added to the sanctions list “the names of Russian elites and their families.”

I spoke with the G7 leaders today, and we are in full agreement:

We will limit Russia’s ability to be part of the global economy.

We will stunt their ability to finance and grow Russia’s military.

We will impair their ability to compete in a high-tech, 21st century economy.

– President Biden (@POTUS) February 24, 2022

Reuters reported that the Americans also restricted exports of telecommunications equipment, aircraft components, microelectronics and other products. Exports of hi-tech products to Russia should be reduced by about half.

The group of the most developed countries in the world, the G7, has also agreed on devastating sanctions packages against Russia. In addition to the United States, it includes Britain, France, Japan, Canada, Germany and Italy.

Sanctions from the United Kingdom

On February 22, British Prime Minister Boris Johnson said that Britain would impose sanctions on five Russian banks and three billionaires close to the Kremlin: Gennady Timchenko and Boris and Igor Rotenberg.

Sanctioned financial institutions include Benk Rossija, IS Bank, General Bank, Promsvjazbank and Black Sea Bank.

The said entrepreneurs will be frozen of all their possessions in the United Kingdom and will be prohibited from traveling there. The British sanctions are also the target of Duma deputies who voted in favor of the independence of Donetsk and Luhansk.

On Thursday, the British subsequently announced that they would impose “The biggest and toughest package of economic sanctions Russia has ever seen.”

According to Boris Johnson, all major Russian banks will be excluded from the financial system of the island kingdom, with a complete asset freeze imposed on the second largest Russian bank, VBT. According to Sky News, VBT is worth 154 billion pounds.

Johnson added that the amount that Russians could have in British bank accounts would be limited, with the asset freeze extending to about 100 other oligarchs.

In addition, Aeroflot will be banned from flying to the United Kingdom.

New Zealand, Australia, Japan, Canada and Taiwan are also imposing sanctions

It also introduces sanctions against Russia New Zealand, he announced a targeted ban on Russian officials from entering its territory, as well as a ban on trade with Russian military and security forces. He also threatened that further steps could follow in the event of an ongoing conflict in Ukraine.

Australia also announced the extension of sanctions against some prominent Russian citizens and politicians. Financial sanctions and a ban on entry are expected to affect eight Russian officials who helped move Russian troops to eastern Ukraine. Other sanctions concern Russian transport, energy, telecommunications and the mining sector.

Japan in turn, it said it would extend anti-Russian sanctions to financial institutions and military equipment exports.

Update: Canada will impose severe sanctions on President Putin, his Chief of Staff, and his Foreign Minister – the men who bear the greatest responsibility for the death and destruction occurring in Ukraine.

– Justin Trudeau (@JustinTrudeau) February 26, 2022

Canada banned trade with separatist republics as well as trade in Russian sovereign debt. It also imposed sanctions on MPs who supported the recognition of separatist republics. In response to the Russian military’s invasion of Ukraine, Canadian Prime Minister Justin Trudeau on Thursday announced the imposition of new sanctions on 58 Russian individuals and institutions. Sanctions on Canada concern members of the Russian elite and their families, a private paramilitary organization, the so-called Wagner Group, but also a Russian bank. Canada is also revoking export licenses for Russia.

He has already informed about the introduction of sanctions against Russia Taiwan. Taiwan Semiconductor Manufacturing, the world’s largest chip manufacturer, has already announced its readiness to follow export control rules.

South Korea has said it will impose US and European sanctions on Russia, but will not impose its own.

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Nordic 2 sign
Source: TASR / Jens Büttner / dpa-Zentralbild / dpa, dpa-Bildfunk

North stream

On February 22, German Chancellor Olaf Scholz announced that Germany was halting the approval process for the Nord Stream 2 gas pipeline until further notice.

A day later, US President Joe Biden said his administration would impose sanctions on Nord Stream 2 AG, which is responsible for building the controversial Russian gas pipeline.

Sanctions aimed directly at Putin and his loved ones

The US government has also imposed sanctions directly on Russian President Vladimir Putin, Foreign Minister Sergei Lavrov, Defense Minister Sergei Shoigu and other members of the Russian Security Council. According to Sky News, the chief of staff of the Russian Armed Forces, Valery Gerasimov, is on the sanctions list. According to the US Treasury Department, Putin and Lavrov are “directly responsible for the unprovoked Russian attack and the subsequent illegal invasion ” Of Ukraine.

Putin, Lavrov and other Russian officials will be banned from traveling to the United States and will also freeze their potential assets in U.S. jurisdiction. Similar sanctions, namely the freezing of assets for Putin and Lavrov, were announced on Friday by the European Union and subsequently by Britain, Canada and Australia.

Zelensky welcomed the steps of the West

Ukrainian President Volodymyr Zelensky on Saturday welcomed the steps taken by the West to exclude Russia from the international payment system SWIFT. Zelensky also welcomed the willingness of Turkey and Azerbaijan to help organize Ukraine’s peace talks with Russia, and called his conversation with Italian Prime Minister Mario Draghi key to reaching an agreement on greater international support for Ukraine.

GRAND OVERVIEW OF SANCTIONS: Tough EU intervention! Cutting off SWIFT and freezing reserves, there is another package in the game