Finance

sanctions targeting the Russian economy

Closure of airspace, freezing of assets of personalities or companies, questioning of commercial links: since the start of hostilities in Ukraine, the West has multiplied economic sanctions against Vladimir Putin, and the Russian economy.

The financial sector

It is favored by Westerners in order to limit war financing capacities.

United States, European Union, followed by other countries, have chosen to directly target the Russian central bank, prohibiting since Monday any transaction with the Russian monetary institution and immobilizing its foreign currency assets. Consequence: the ruble is in free fall against the dollar and withdrawals at counters have multiplied.

Another severe blow: the exclusion of the country’s main banks from the Swift interbank system, an essential cog in global finance for quickly and securely communicating about transactions.

In order to limit the risk of circumvention of sanctions, the G7 and EU countries are considering making specific provisions for cryptocurrencies, which many Russians have flocked to in the hope of finding a safe haven there.

Transportation

The airspace of all NATO and EU members is now closed to Russian planes, forcing Russian airline Aeroflot to suspend many flights. In retaliation, Russia has banned overflights of its territory by airlines from these countries, forcing many companies to review their routes to Asia.

More broadly, the entire Russian aeronautical industry is targeted: the EU and Canada have banned the export to Russia of aircraft, parts and equipment from the aeronautical and space industry. Boeing and Airbus have announced that they no longer supply spare parts and maintenance for aircraft registered in Russia.

London added a level by banning Russian aviation and aerospace companies from accessing insurance and reinsurance services.

Maritime transport is not spared: the United Kingdom has closed all of its ports to ships flying the Russian flag but also chartered or owned by Russians. Shipowners Maersk, CMA CGM, Hapag Lloyd and MSC have announced the suspension of deliveries to Russian ports.

energy

Gazprom, the Russian gas giant, is one of the companies that can no longer raise funds on Western financial markets.

Another symbolic decision was the suspension of the Nord Stream 2 gas pipeline, which was supposed to increase deliveries of Russian gas to Germany. The company that manages it has also filed for bankruptcy.

But attacking the Russian energy sector directly is more complicated for Westerners, first and foremost the Europeans, who remain very dependent on Russian gas.

Trade

The export of semiconductors and technological equipment was the first phase, starting last week by Japan, among one of the main producers, then by the United States, when these electronic components are now essential to a large range of industrial products.

On Wednesday, the White House broadened the prohibitions, on the one hand aimed at the Russian defense industry, by freezing the assets of the companies in the United States and by prohibiting any transaction with American companies or persons, from on the other hand by blocking exports to Russia of equipment and technologies necessary for the oil industry, the country’s main source of foreign currency.

Washington took the opportunity to extend its sanctions to Belarus, for its aid to the Russian invasion.

Canada, for its part, will revoke the special trade status of Russia and Belarus, resulting in a 35% import tax on products from the two countries.

The media

The EU has banned Russian state media RT and Sputnik from broadcasting, regardless of their broadcast channel, broadcast or via the internet.

Facebook, a subsidiary of Meta, and YouTube, a subsidiary of Google, have decided to block these publications from these media in Europe.

More broadly, Google has announced that it has suspended the ability of Russian state-funded media to generate money on its platforms.

personalities

Several prominent Russian personalities are also subject to sanctions. On the political side, they concern 350 deputies, the close circle of the Russian president, including his Prime Minister Mikhail Michoustine or his Foreign Minister Sergei Lavrov, but also Vladimir Putin himself.

They also affect many Russian businessmen, including Roman Abrahamovitch, the owner of the English club Chelsea, which he has put up for sale, or the boss of the oil group Rosneft, Igor Setchin.

Sanctions include banning travel to European countries as well as freezing their assets present there. In France, Igor Setchine’s yacht was seized on Thursday. Several other oligarchs, like Mr. Abrahamovitch, moved theirs to the Maldives to avoid a similar fate.

Washington has decided to go further, creating a cell of investigators to prosecute ‘corrupt Russian oligarchs’, as well as anyone who violates the sanctions.

/ TTY

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