bond

British sanctions on Russia: what is on the table?


Ministers are preparing tougher sanctions against Russia, which officials said would target UK-based oligarchs, tech exports and sovereign debt. The move follows Boris Johnson’s measures, which were criticised by Conservative MPs for failing to hit Vladimir Putin’s power base hard enough.

The measures have been deemed weaker than those announced by the US and EU, though No 10 said the packages had been coordinated.

How do Britain’s sanctions compare with the EU and US?

Some MPs and analysts said the UK sanctions did not match the hardline rhetoric of the prime minister, Boris Johnson. But the conciliatory efforts of some European countries such as France and Germany were followed by more sweeping sanctions, including a pause made by the German chancellor to the €10bn Nord Stream 2 pipeline.

EU foreign ministers agreed sanctions to target banks financing the military operations. These are understood to include Promsvyazbank, a defence sector funder, which has also been sanctioned by the UK.

Three “high net worth” individuals were sanctioned by the UK, though all three had been on US sanctions lists since 2018.

The EU is to impose travel bans and asset seizures on 27 individuals and entities who played a role in “undermining Ukrainian sovereignty”, including the Russian defence minister, Sergei Shoigu, and the commanders of the Russian air force and Black Sea fleet. That will also apply to the 351 members of the Duma who voted in favour of Russia’s recognition of the self-proclaimed republics in Luhansk and Donetsk – a step the UK is also expected to take.

Joe Biden, the US president, also imposed severe sanctions on Promsvyazbank and against Russia’s sovereign debt, which he said meant the Russian government being cut off from western financing. As yet there have been no sanctions over big state-owned commercial banks.

Individuals and their relatives have also been targeted by US sanctions; those people include Aleksandr Bortnikov, the director of the Federal Security Service, and Sergei Kiriyenko, a former prime minister of Russia.

What is the trigger for new UK sanctions?

The UK is expected to impose sanctions on Duma members in the coming days. Sources said there were still legal issues to be finalised thoughit would not require new legislation.

Beyond that, officials were reluctant to spell out what would trigger the next full round of sanctions.

“We don’t think it would be helpful to identify specific trigger points for action,” Johnson’s spokesman said. “We don’t want to give them any advantage on that front. We are not going to get overly prescriptive.”

But No 10 stressed it expects those sanctions will be triggered within days, saying: “We have set out our intention if there is further escalation; it certainly appears Russia is intent on escalating this.”

The key question is how far Russian troops will advance into territory not already under de-facto control of Russian-backed separatists. So far the advances appear to only formalise Russian presence; in practice that has been the case for eight years.

Putin said that Russia recognised the borders of Luhansk and Donetsk claimed by the self-proclaimed “people’s republics”. It could mean an advance well beyond the current frontline of conflict, in areas still under the control of the Ukrainian governments and including significant towns and cities, such as Mariupol and Kharkiv.

What sanctions are on the table and how would they work?

Planned measures would have an impact on the banking and finance sectors, ban hi-tech exports, and sanction a wider range of people and companies in the defence and energy sectors and other areas of strategic significance to Russia.

Liz Truss, the foreign secretary, said Britain would stop Russia selling sovereign debt in London, which is issued as bonds in foreign currencies to finance growth and development. To limit sovereign debt sales in London, Britain would need additional legislation, according to officials.

Banks, mostly in France, Italy and Austria, are concerned about Russia, lent an estimated $30bn, being banned from the global payment system Swift; that would hit Russian banks hard but also make it tough for European creditors to get their money back. Russia has been building up an alternative payment system.

One proposal is to stop shipments to Russia of computers, chips, consumer electronics, telecoms equipment and other items made anywhere in the world but produced using US, UK or EU technology. A similar measure was deployed against the Chinese technology firm Huawei.

Officials say there is a longer list of Russian oligarchs and other allies of Putin who will be sanctioned, including people in the UK. Those targeted in the first tranche of sanctions were the billionaire Gennady Timchenko, and Boris and Igor Rotenberg, though all were already under American sanctions.

What are other parties calling for?

Labour’s leader, Keir Starmer, has said the UK could exclude Russia from the Swift payments system. It would cut Russia off from a global network used by almost all financial institutions worldwide. The US and Germany are said to be worried about the potential economic shock it could cause.

Labour has also called for the UK to ban the Russian TV channel RT, by getting Ofcom to review its licence. Johnson confirmed on Wedneday that the culture secretary, Nadine Dorries, had written to the broadcasting watchdog, Ofcom, asking for a review. He previously said politicians should not determine which media organisations to ban. There are also concerns about retaliations that could be taken against UK media organisations in Russia, including the BBC.

The Liberal Democrat foreign affairs spokeswoman, Layla Moran, said the UK government should heed the call of Russian’s key opposition figure, Alexei Navalny, and sanction the 35 individuals he had named, using parliamentary privilege to list them in the Commons. The Conservative party is also coming under pressure to break links with Russian oligarchs who have donated more than £2m to the party.

Why hasn’t Britain gone further?

Truss said the government was taking an “escalatory approach” with international allies. She said she thought Putin was “hell-bent” on a full-scale invasion of Ukraine, including the capital, Kyiv.

“We will agree a further package in the event, which we think is highly likely, of a full-scale invasion into Ukraine,” she told BBC Radio 4’s Today programme. “We don’t want to be in the situation … where we’ve got nothing left in the locker. Nothing is off the table in terms of who we’re targeting.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.