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Following Russia's invasion of Ukraine in February 2022, the United States, the European Union, and other countries introduced or significantly expanded sanctions to include
Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
and other government members, and cut off "selected Russian banks" from the SWIFT network triggering the
2022 Russian financial crisis The economic impact of the 2022 Russian invasion of Ukraine began in late February 2022, in the days after Russia recognized two breakaway Ukrainian republics and launched an invasion of Ukraine. The subsequent economic sanctions have tar ...
and a massive international boycott of Russia and Belarus, which supports the invasion.


Background and history of sanctions and ramifications


History of sanctions

Western countries and others imposed limited sanctions on Russia when it recognised the independence of its puppet states, the
Donetsk Donetsk ( , ; uk, Донецьк, translit=Donets'k ; russian: Донецк ), formerly known as Aleksandrovka, Yuzivka (or Hughesovka), Stalin and Stalino (see also: cities' alternative names), is an industrial city in eastern Ukraine loc ...
and
Luhansk People's Republic The Luhansk or Lugansk People's Republic (russian: Луга́нская Наро́дная Респу́блика, Luganskaya Narodnaya Respublika, ; abbreviated as LPR or LNR, rus, ЛНР) is a disputed entity created by Russian-backed ...
. With the commencement of attacks on 24 February 2022, a large number of other countries began applying sanctions with the aim of crippling the Russian economy. The sanctions were wide-ranging, targeting individuals, banks, businesses, monetary exchanges, bank transfers, exports, and imports. The sanctions included cutting off major Russian banks from SWIFT, the global messaging network for international payments, although there would still be limited accessibility to ensure the continued ability to pay for gas shipments. Sanctions also included asset freezes on the
Russian Central Bank The Central Bank of the Russian Federation (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...
, which holds $630 billion in
foreign-exchange reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
, to prevent it from offsetting the impact of sanctions and implicated the Nord Stream 2 gas pipeline. By 1 March, the total amount of Russian assets being frozen by sanctions amounted to $1 trillion. Major multinational companies including
Apple An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus '' Malus''. The tree originated in Central Asia, where its wild ancest ...
, IKEA,
ExxonMobil ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 3 ...
, and
General Motors The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
, have themselves decided to apply sanctions to Russia, acting as international law enforcers on behalf of states. Ukrainian and Western governments have explicitly urged the global private sector to help uphold international law, and the EU, UK and Australia have also called on global digital platforms to remove pro-Russian propaganda. Multinational companies have disengaged from Russia to comply with sanctions and trade restrictions imposed by home states, but also on their own accord, beyond what was required by law, to avoid the economic and reputational risks associated with maintaining commercial ties with Russia. Several countries that are historically neutral, such as
Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
and
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
, have agreed to sanctions. Some countries also applied sanctions to Belarusian organisations and individuals, such as President Alexander Lukashenko, because of Belarus' involvement in the invasion. Since 1969, Germany had maintained a policy called Ostpolitik, choosing dependence on Russian energy to maintain peaceful relations with Russia and to integrate it in to Europe, while allowing defence spending to fall. In response to the invasion, Germany's chancellor, Olaf Scholz, suspended the Nord Stream 2 pipeline and announced a new policy of energy independence from Russia, admitting that ''Ostpolitik'' was a failure. In addition, Germany provided arms shipments to Ukraine, the first time that it provided arms to a country at war since the end of World War II. Germany also increased defence expenditures by approximately $100 billion, by some estimates making it the third largest military spender in the world. This change from a policy of appeasement to brinkmanship has been called a new epoch in German policy by ''
The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Eco ...
''. Germany had to deal with its first export deficit in over 30 years due to escalating energy prices. The industrial competitiveness of Germany in the past substantially relied on cheap gas imports from Russia, but Germany's industry associations applauded the move to reduce the use of natural gas, and to replace Russian imports with liquified gas from the
Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
. Upon his arrival for the NATO extraordinary summit in Brussels on 24 March, Biden indicated that further economic sanctions would be placed against Russia, including restrictions on the Russian Central Bank's use of gold in transactions and a new round of sanctions that targeted defense companies, the head of Russia's largest bank, and more than 300 members of the Russian State Duma. On 27 February 2022, Putin responded to the sanctions, and to what he called "aggressive statements" by Western governments, by ordering the country's "deterrence forces"—generally understood to include its nuclear forces—to be put on a "special regime of combat duty". This novel term provoked some confusion as to what exactly was changing, but US officials declared it generally "escalatory". Following sanctions and criticisms of their relations with Russian business, a boycott movement began and many companies and organisations chose to exit Russian or Belarusian markets voluntarily. The boycotts impacted many consumer goods, entertainment, education, technology, and sporting organisations. The US instituted export controls, a novel sanction focused on restricting Russian access to high-tech components, both hardware and software, made with any parts or intellectual property from the US. The sanction required that any person or company that wanted to sell technology, semiconductors, encryption software, lasers, or sensors to Russia request a licence, which by default was denied. The enforcement mechanism involved sanctions against the person or company, with the sanctions focused on the shipbuilding, aerospace, and defence industries. As an effect of the sanctions, Russian elites shifted funds worth hundreds of millions of dollars from sanctioning countries, like the UK and Switzerland, to countries that have not imposed sanctions, like the
United Arab Emirates The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (Middle East, The Middle East). It is ...
. Russia was reported in May 2022 to be using its gold reserves to support the economy, despite a ban on trading gold. Switzerland had been a significant importer of Russian gold destined for refineries or jewelry production. A Switzerland-based NGO, Swissaid, demanded transparency in the source of the gold imports from the United Arab Emirates following concerns about its potential origin being Russia. Russian gold imports into Switzerland remained legal until 3 August 2022 as long as sanctioned financial institutions were not involved, but they only amount to a few percent of the total Swiss gold trade. In May 2022, Russian gold re-entered the Swiss market valued almost 200 million CHF, the biggest increase since September 2021, mostly from duty-free storage facilities. Russian gold producers have been banned from the London Bullion Market since March 2022, but the recent uptick has been attributed to small gold traders and jewelers. Later in August 2022, Switzerland adopted a new EU ban on all Russian gold imports. Diamonds are a significant export source for the Russian economy, which is by far the largest exporter globally. After sanctions have been placed on the largest diamond producer Alrosa, its sales declined sharply but rebounded significantly in late 2022. Most raw diamonds from Russia now enter the market via India, and are re-exported to China and Japan, but also to the United States. Even Belgium's prime minister has reiterated his stance to exclude Russian diamonds from sanctions, since 80% of rough diamonds are traded through its port city of
Antwerp Antwerp (; nl, Antwerpen ; french: Anvers ; es, Amberes) is the largest city in Belgium by area at and the capital of Antwerp Province in the Flemish Region. With a population of 520,504,
at some stage. Sanctions on the trade of Russian diamonds benefited a handful of smaller to medium-sized companies, mostly in India, that took over the lucrative trade. During a speech at the
UN General Assembly The United Nations General Assembly (UNGA or GA; french: link=no, Assemblée générale, AG) is one of the six principal organs of the United Nations (UN), serving as the main deliberative, policymaking, and representative organ of the UN. Curr ...
in NYC on 20 September 2022, French president
Emmanuel Macron Emmanuel Macron (; born 21 December 1977) is a French politician who has served as President of France since 2017. ''Ex officio'', he is also one of the two Co-Princes of Andorra. Prior to his presidency, Macron served as Minister of Econ ...
asked, "who here can defend the idea that the invasion of Ukraine justifies no sanctions?" He accused neutral states to be "indifferent" towards the conflict. The issue of economic sanctions against Russia, however, had even challenged the unity of European leaders, when
Hungary Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Cr ...
gained major exemptions from the Russian oil embargo in June 2022, and
Bulgaria Bulgaria (; bg, България, Bǎlgariya), officially the Republic of Bulgaria,, ) is a country in Southeast Europe. It is situated on the eastern flank of the Balkans, and is bordered by Romania to the north, Serbia and North Macedo ...
as well as
Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical ...
are holding elections in late 2022, with potential gains for political forces opposed to economic sanctions. On 16 December 2022, The EU introduced a ninth package of sanctions against the Russian economy. The talks were described as "acrimonious" when only the Baltic states bordering Russia were supportive of tougher sanctions. A spokesperson for the Belgian government said, "It is becoming increasingly difficult to impose sanctions that hit Russia hard enough, without excessive collateral damage to the EU." A recent price cap on Russian oil was declared meaningless when crude was selling below that level, as revenues still flow to Moscow. Some European countries such as
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to ...
,
Greece Greece,, or , romanized: ', officially the Hellenic Republic, is a country in Southeast Europe. It is situated on the southern tip of the Balkans, and is located at the crossroads of Europe, Asia, and Africa. Greece shares land borders wi ...
and
Hungary Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Cr ...
still rely heavily on Russian energy imports to support their economies.


Sanctions

Western countries and others began imposing limited sanctions on Russia when it recognised the independence of self-declared Donbass republics. With the commencement of attacks on 24 February, a large number of other countries began applying sanctions with the aim of crippling the Russian economy. The sanctions were wide-ranging, targeting individuals, banks, businesses, monetary exchanges, bank transfers, exports, and imports. After Russia invaded Ukraine on 24 February 2022, two countries that had not previously taken part in sanctions, namely South Korea and non-UN member state
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the no ...
, engaged in sanctions against Russia. On 28 February 2022,
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
announced that it will impose banking sanctions against Russia for Ukraine invasion, thus making them the first country in Southeast Asia to impose sanctions upon Russia. The sanctions also included materials that could be used for weapons against Ukraine, as well as electronics, technology devices and other related equipment, which were listed in a detailed statement on 5 March. On 25 February and 1 March 2022
Serbia Serbia (, ; Serbian: , , ), officially the Republic of Serbia ( Serbian: , , ), is a landlocked country in Southeastern and Central Europe, situated at the crossroads of the Pannonian Basin and the Balkans. It shares land borders with Hu ...
,
Mexico Mexico (Spanish language, Spanish: México), officially the United Mexican States, is a List of sovereign states, country in the southern portion of North America. It is borders of Mexico, bordered to the north by the United States; to the so ...
and
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
announced that they would not be participating in any economic sanctions against Russia. On 28 February 2022, the Central Bank of Russia was blocked from accessing more than $400 billion in
foreign-exchange reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
held abroad and the EU imposed sanctions on several Russian oligarchs and politicians. On the same day US Foreign Assets Control (OFAC) has prohibited United States persons from engaging in transactions with Central Bank of Russia, Russian Direct Investment Fund (including its predecessor, JSC RDIF, sanctioned previously), Limited Liability Company RVC Management Company, and
Kirill Dmitriev Kirill Alexandrovich Dmitriev (russian: Кирилл Александрович Дмитриев; born 12 April 1975) is the CEO of the Russian Direct Investment Fund (RDIF), a $10 billion sovereign wealth fund created by the Russian government ...
, a
Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
's ally, personally.
Sergei Aleksashenko Sergey Vladimirovich Aleksashenko (russian: Сергей Владимирович Алексашенко; born 23 December 1959, Likino-Dulyovo) is a Russian economist and former government official. He was the deputy finance minister and first d ...
, the former Russian deputy finance minister, said: "This is a kind of financial nuclear bomb that is falling on Russia." On 1 March 2022, the French finance minister Bruno Le Maire said the total amount of Russian assets being frozen by sanctions amounted to $1 trillion.
Faisal Islam Faisal Islam ( bn, ফয়সাল ইসলাম; born 29 May 1977) is a British political and economics journalist who is the economics editor of BBC News and the occasional presenter of ''Newsnight''. He was the political editor of Sky Ne ...
of BBC News stated that the measures were far from normal sanctions and were "better seen as a form of economic war". The intent of the sanctions was to push Russia into a deep
recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...
with the likelihood of bank runs and hyperinflation. Islam noted that targeting a G20 central bank in this way had never been done before. Deputy Chairman of the Security Council of Russia and former president Dmitry Medvedev derided Western sanctions imposed on Russia, including personal sanctions, and commented that they were a sign of "political impotence" resulting from NATO's withdrawal from Afghanistan. He threatened to nationalise foreign assets that companies held inside Russia. In July 2022, Russia warned Western countries from imposing additional sanctions on Russian energy. In a TV interview on Rossiya 24, Putin claimed “sanctions restrictions on Russia cause much more damage to those countries that impose them”. While Russia's energy industry was stabilized through redirecting oil exports to India and China, Western countries have experienced unprecedented inflation that has hampered economic growth, and increased the risk of a global recession.


Fossil fuels and other commodities

On 8 March 2022, President Joe Biden ordered a ban on imports of oil, gas and coal from Russia to the US. In May 2022, the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
proposed a ban on oil imports from Russia. The proposal was reduced to a ban on oil imports by sea to appease Hungary, whose prime minister, Viktor Orbán, has befriended Putin and which gets 60% of its oil from Russia via pipelines. European oil pipeline supply from Russia is 800,000 barrels a day and is an exception to the sanctions with oil transit insurance bans being phased over several months. Germany and Poland have vowed to end pipeline deliveries. On Feb 28th, the Government of Canada banned imports of Russian crude oil. On June 8, Ottawa banned services to the Russian oil, miniing, gas, and chemical industries. Switzerland is a major hub for commodities trading globally. As such, about 80% of Russia's commodity trading goes through Geneva and with a further estimated 40 commodities companies linked to Russia in Zug. Glencore,
Gunvor Gunvor Group Ltd is a Cypriot-domiciled multinational commodity trading company registered in Cyprus, with its main trading office in Geneva, Switzerland. Gunvor also has trading offices in Singapore, the Bahamas, and Dubai, with a network of r ...
, Vitol,
Trafigura Trafigura Group Pte. Ltd. is a Singaporean-based Swiss multinational commodity trading company founded in 1993 that trades in base metals and energy. It is the world's largest private metals trader and second-largest oil trader having built or ...
and Lukoil Litasco SA are oil and commodities trading firms with stakes in
Rosneft PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian integrated energy company headquartered in Moscow. Rosneft specializes in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petro ...
and Lukoil, two major Russian oil companies. MMK (a Russian-based company in
Lugano Lugano (, , ; lmo, label= Ticinese, Lugan ) is a city and municipality in Switzerland, part of the Lugano District in the canton of Ticino. It is the largest city of both Ticino and the Italian-speaking southern Switzerland. Lugano has a populat ...
) is also a major player in the commodities/steel trading with Eastern Europe. On 8 March 2022, Shell announced its intention to withdraw from the Russian hydrocarbons industry. In response to the invasion of Ukraine by Russia, the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
and
International Energy Agency The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organisation, established in 1974, that provides policy recommendations, analysis and data on the entire global energy sector, with a recent focus on curbing car ...
presented joint plans to reduce reliance on Russian energy, reduce Russian gas imports by two thirds within a year, and completely by 2030. In April 2022, European Commission President Ursula von der Leyen said "the era of Russian fossil fuels in Europe will come to an end". On 18 May 2022, the European Union published plans to end its reliance on Russian oil, natural gas and coal by 2027. On September 2, the G7 group of nations agreed to cap the price of Russian oil in order to reduce Russia's ability to finance its war with Ukraine without further increasing inflation. On 22 September 2022, EU ministers agreed to prepare new sanctions against Russia's energy sector. With the looming Russian oil embargo, after a series of nationalisations of Russian refineries and gas companies by Germany, some EU countries, such as
Romania Romania ( ; ro, România ) is a country located at the crossroads of Central Europe, Central, Eastern Europe, Eastern, and Southeast Europe, Southeastern Europe. It borders Bulgaria to the south, Ukraine to the north, Hungary to the west, S ...
allowed continued operations of Lukoil refineries with oil from non-Russian sources. The ''Financial Times'' called Germany's action to nationalise fuel refineries and gas companies a "desperate" act. On 6 October 2022, the E.U. in its 8th round of sanctions agreed to price cap Russian oil imports (for Europe and third countries) with a price maximum to be set on December 5, 2022. A number of nations, including
Hungary Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Cr ...
and
Serbia Serbia (, ; Serbian: , , ), officially the Republic of Serbia ( Serbian: , , ), is a landlocked country in Southeastern and Central Europe, situated at the crossroads of the Pannonian Basin and the Balkans. It shares land borders with Hu ...
gained major exemptions from the agreement.
Greece Greece,, or , romanized: ', officially the Hellenic Republic, is a country in Southeast Europe. It is situated on the southern tip of the Balkans, and is located at the crossroads of Europe, Asia, and Africa. Greece shares land borders wi ...
with its extensive petroleum sea transport industry was also described as a major 'profiteur' from Russian oil shipments, as it conducts cargo-reloading operations in the Laconian Gulf, according to informed sources.


Banking

In a 22 February 2022 speech, US president Joe Biden announced restrictions against four Russian banks, including V.E.B., as well as on corrupt billionaires close to Putin. UK prime minister
Boris Johnson Alexander Boris de Pfeffel Johnson (; born 19 June 1964) is a British politician, writer and journalist who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 2019 to 2022. He previously served as ...
announced that all major Russian banks would have their assets frozen and be excluded from the UK financial system, and that some export licences to Russia would be suspended. He also introduced a deposit limit for Russian citizens in UK bank accounts, and froze the assets of over 100 additional individuals and entities. The foreign ministers of the
Baltic states The Baltic states, et, Balti riigid or the Baltic countries is a geopolitical term, which currently is used to group three countries: Estonia, Latvia, and Lithuania. All three countries are members of NATO, the European Union, the Eurozone ...
called for Russia to be cut off from SWIFT, the global messaging network for international payments. Other EU member states had initially been reluctant to do this, both because European lenders held most of the nearly $30 billion in foreign banks' exposure to Russia and because China had developed an alternative to SWIFT called CIPS; a weaponisation of SWIFT would provide greater impetus to the development of CIPS which, in turn, could weaken SWIFT as well as the West's control over international finance. Other leaders calling for Russia to be stopped from accessing SWIFT include Czech president Miloš Zeman, and UK prime minister Boris Johnson. Germany had resisted calls for Russia to be banned from SWIFT, citing the effect it would have on payments for Russian gas and oil; on 26 February, the German foreign minister Annalena Baerbock and economy minister Robert Habeck made a joint statement backing targeted restrictions of Russia from SWIFT. Shortly thereafter, it was announced that major Russian banks would be removed from SWIFT, although there would still be limited accessibility to ensure the continued ability to pay for gas shipments. Furthermore, it was announced that the West would place sanctions on the Russian Central Bank, which holds $630bn in foreign reserves, to prevent it from liquidating assets to offset the impact of sanctions. On 26 February, two Chinese state banks—the Industrial and Commercial Bank of China, which is the largest bank in the world, and the
Bank of China The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world. The Bank of China was founded in 1912 by the Republican government as China's central bank, rep ...
, which is the country's biggest currency trader—were limiting financing to purchase Russian raw materials, which was limiting Russian access to foreign currency. On 28 February, Switzerland froze a number of Russian assets and joined EU sanctions. According to Ignazio Cassis, the
president of the Swiss Confederation The president of the Swiss Confederation, also known as the president of the Confederation or colloquially as the president of Switzerland, is the head of Switzerland's seven-member Federal Council, the country's executive branch. Elected by ...
, the decision was unprecedented but consistent with Swiss neutrality. The same day,
Monaco Monaco (; ), officially the Principality of Monaco (french: Principauté de Monaco; Ligurian: ; oc, Principat de Mónegue), is a sovereign city-state and microstate on the French Riviera a few kilometres west of the Italian region of Lig ...
adopted economic sanctions and procedures for freezing funds identical to those taken by most European states.
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
became the first Southeast Asian country to impose sanctions on Russia by restricting banks and transactions linked to Russia; the move was described by the ''
South China Morning Post The ''South China Morning Post'' (''SCMP''), with its Sunday edition, the ''Sunday Morning Post'', is a Hong Kong-based English-language newspaper owned by Alibaba Group. Founded in 1903 by Tse Tsan-tai and Alfred Cunningham, it has remained ...
'' as being "almost unprecedented". South Korea announced it would participate in the SWIFT ban against Russia, as well as announcing an export ban on strategic materials covered by the "Big 4" treaties to which Korea belongs—the Nuclear Suppliers Group, the Wassenaar Arrangement, the Australia Group, and the
Missile Technology Control Regime The Missile Technology Control Regime (MTCR) is a multilateral export control regime. It is an informal political understanding among 35 member states that seek to limit the proliferation of missiles and missile technology. The regime was formed ...
; in addition, 57 non-strategic materials, including semiconductors, IT equipment, sensors, lasers, maritime equipment, and aerospace equipment, were planned to be included in the export ban "soon". On 28 February,
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the n ...
announced that its central bank would join sanctions by limiting transactions with Russia's central bank, and would impose sanctions on
Belarus Belarus,, , ; alternatively and formerly known as Byelorussia (from Russian ). officially the Republic of Belarus,; rus, Республика Беларусь, Respublika Belarus. is a landlocked country in Eastern Europe. It is bordered by ...
ian organisations and individuals, including President
Aleksandr Lukashenko Alexander Grigoryevich Lukashenko (as transliterated from Russian; also transliterated from Belarusian as Alyaksand(a)r Ryhoravich Lukashenka;, ; rus, Александр Григорьевич Лукашенко, Aleksandr Grigoryevich Luk ...
, because of Belarus' "evident involvement in the invasion" of Ukraine. According to ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', payments for energy raw materials have been largely spared from these measures. The Central Bank of Russia was blocked from accessing more than $400 billion in
foreign-exchange reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
held abroad.
Sergei Aleksashenko Sergey Vladimirovich Aleksashenko (russian: Сергей Владимирович Алексашенко; born 23 December 1959, Likino-Dulyovo) is a Russian economist and former government official. He was the deputy finance minister and first d ...
, the former Russian deputy finance minister, said: "This is a kind of financial nuclear bomb that is falling on Russia." EU foreign affairs chief Josep Borrell said that Western nations "cannot block the reserves of the Russian central bank in Moscow or in China". On 1 March, the Grand and General Council of
San Marino San Marino (, ), officially the Republic of San Marino ( it, Repubblica di San Marino; ), also known as the Most Serene Republic of San Marino ( it, Serenissima Repubblica di San Marino, links=no), is the fifth-smallest country in the world an ...
authorised the country's government to take sanctions against Russia, and rejected that the measures had a military content. The same day, the French finance minister Bruno Le Maire said that Russian assets being frozen by sanctions amounted to $1 trillion.
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
announced it would stop all transactions with 7 main Russian banks and their affiliates, restrict the purchase of Russian treasury bonds, and agreed to "immediately implement" and join any further economics sanctions imposed against Russia by the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
. Following sanctions and criticisms of their relations with Russian business, many companies chose to exit Russian or Belarusian markets voluntarily or in order to avoid potential future sanctions. Visa, Mastercard, and American Express independently blocked Russian banks as of 2 March. Following Swiss sanctions on Russia and leaks to the media showing loans worth hundreds of millions of dollars to Russian oligarchs, Credit Suisse issued orders to destroy documents linking Russian oligarchs to yacht loans, a move which led to considerable criticism. In August 2022, the Swiss Federal Council announced it froze all assets of Sberbank, and ordered a sale of its subsidiaries. Financial transactions for agricultural products and fossil fuel to third parties were valid exceptions in the recent measure.


Export

The US instituted export controls, a novel sanction focused on restricting Russian access to high-tech components, both hardware and software, made with any parts or intellectual property from the US. The sanction required that any person or company that wanted to sell technology, semiconductors, encryption software, lasers, or sensors to Russia request a licence, which by default was denied. The enforcement mechanism involved sanctions against the person or company, with the sanctions focused on the shipbuilding, aerospace, and defence industries. On 20 March 2022, Australia banned the export of alumina,
bauxite Bauxite is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium and gallium. Bauxite consists mostly of the aluminium minerals gibbsite (Al(OH)3), boehmite (γ-AlO(OH)) and diaspore (α-AlO ...
and other aluminium ores to Russia.


Officials

On 9 December 2022,
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...
imposed new sanctions on Russia, alleging human rights violations. The decision includes sanctions against 33 current or former senior Russian officials and six entities involved in alleged "systematic human rights violations" against Russian citizens who protested against Russia's invasion of Ukraine.


EU sanctions

On the morning of 24 February, Ursula von der Leyen, the president of the European Commission, announced "massive" EU sanctions to be adopted by the union. The sanctions targeted technological transfers, Russian banks, and Russian assets. Josep Borrell, the
High Representative of the Union for Foreign Affairs and Security Policy The High Representative of the Union for Foreign Affairs and Security Policy (HR/VP) is the chief co-ordinator and representative of the Common Foreign and Security Policy (CFSP) within the European Union (EU). The position is currently held ...
, stated that Russia would face "unprecedented isolation" as the EU would impose the "harshest package of sanctions
hich the union has Ij ( fa, ايج, also Romanized as Īj; also known as Hich and Īch) is a village in Golabar Rural District, in the Central District of Ijrud County Ijrud County ( fa, شهرستان ایجرود) is located in Zanjan province, Iran. The c ...
ever implemented". He also said that "these are among the darkest hours of Europe since the Second World War". President of the European Parliament Roberta Metsola called for "immediate, quick, solid and swift action" and convened an extraordinary session of Parliament for 1 March.


European impoundment of yachts

A 5 April 2022 article by Insider claims the total cost of yachts impounded throughout Europe to be over $2 billion. This amount includes the motoryacht ''Tango'', seized pursuant to United States sanctions with Spanish assistance.


=France

= On 26 February, the
French Navy The French Navy (french: Marine nationale, lit=National Navy), informally , is the maritime arm of the French Armed Forces and one of the five military service branches of France. It is among the largest and most powerful naval forces in t ...
intercepted Russian cargo ship ''Baltic Leader'' in the
English Channel The English Channel, "The Sleeve"; nrf, la Maunche, "The Sleeve" ( Cotentinais) or ( Jèrriais), ( Guernésiais), "The Channel"; br, Mor Breizh, "Sea of Brittany"; cy, Môr Udd, "Lord's Sea"; kw, Mor Bretannek, "British Sea"; nl, Het Ka ...
. The ship was suspected of belonging to a company targeted by the sanctions. The ship was escorted to the port of
Boulogne-sur-Mer Boulogne-sur-Mer (; pcd, Boulonne-su-Mér; nl, Bonen; la, Gesoriacum or ''Bononia''), often called just Boulogne (, ), is a coastal city in Hauts-de-France, Northern France. It is a Subprefectures in France, sub-prefecture of the Department ...
and was being investigated. On 2 March 2022, French customs officials seized the yacht ''Amore Vero'' at a shipyard in La Ciotat. The ''Amore Vero'' is believed to be owned by the sanctioned oligarch Igor Sechin. Two yachts belonging to
Alexei Kuzmichev Alexey Viktorovich Kuzmichev or Kousmichoff (Russian: ''Алексей Викторович Кузьмичёв'') is a Russian businessman. He is one of the founders of the LetterOne Group (LetterOne) and the Alfa Group. Kuzmichev is a stakeho ...
of Alfa Bank were seized by France on March 24.


=Germany

= On 2 March 2022, German authorities immobilized the '' Dilbar'', owned by Alisher Usmanov. She is reported to have cost $800 million, employ 84 full-time crew members, and contain the largest indoor swimming pool installed on a superyacht at 180 cubic metres.


=Italy

= On 4 March 2022, Italian police impounded the yacht '' Lady M''. Authorities believe the ship is owned by Alexei Mordashov. The same day, Italian police seized the yacht of Gennady Timchenko, the ''Lena'', in the port city of Sanremo. The yacht was also placed on a United States sanctions list. On 12 March 2022, Italian authorities in the port of Trieste seized the sailing yacht ''A (sailing yacht), A'', known to be owned by Andrey Melnichenko (industrialist), Andrey Melnichenko. A spokesperson for Melnichenko vowed to contest the seizure.


=Spain

= In March 2022, the Spanish Ministry of Development (Spain), Ministry of Development (known by its acronym "MITMA") detained three yachts pending investigation into whether their true owners are individuals sanctioned by the European Union. The ''Valerie'' is detained in the Port of Barcelona; ''Lady Anastasia'' in Port Adriano in Calvià, Mallorca; and the ''Crescent'' in the Port of Tarragona.


=United Kingdom

= On 29 March 2022, Grant Shapps, the British secretary of state for transport, announced the National Crime Agency's seizure of the ''PHI (yacht), PHI''. The yacht was docked at Canary Wharf and was about to leave.


= Netherlands

= On 6 April 2022, Dutch List of Ministers of Foreign Affairs of the Netherlands, Minister of Foreign Affairs Wopke Hoekstra sent a letter on the subject of sanctions addressed to the House of Representatives (Netherlands), House of Representatives. In it, he reported that while no Russian superyachts were at anchor in the Netherlands, twelve yachts under construction across five shipyards were immobilized to ascertain ownership, including possible beneficial ownership.


Aviation

The EU sanctions introduced on 25 February included a ban on the sale of aircraft and spare parts, and also required Aircraft lease, lessors to terminate the leases on aircraft placed with Russian airlines by the end of March.


Services and spare parts

On 2 March 2022, Airbus and Boeing both suspended maintenance support for Russian airlines. On 11 March, China blocked the supply of aircraft parts to Russia. Business jet manufacturer Bombardier Aviation announced that, in addition to suspending after-sales service activities, it had cancelled all outstanding orders placed by Russian individuals or companies. As of April 2022, spare part and repair difficulties for the Safran Aircraft Engines, Safran/UEC Saturn, Saturn SaM146 engines used on the Sukhoi Superjet 100 were expected to force Russian airlines to ground the type. The lack of approved spare parts has also affected foreign aircraft flying into Russian airports. In June 2022, the Russian government advised its airlines to use some aircraft for parts. That same month, Patrick Ky, executive director of the European Aviation Safety Agency (EASA), expressed concern about the safety of Western-made aircraft flying in Russia without proper access to spare parts or maintenance. He highlighted that risks increase over time and cited reports that Russia will be forced to cannibalise aircraft. In August 2022, Reuters reported confirmation from "four industry sources" that Russia had stripped parts from Airbus A320s and A350s, a Boeing 737 and a Sukhoi Superjet in order to perform maintenance on other aircraft. Around 15% of Aeroflot's fleet appeared to be grounded.


Leased aircraft

On 10 March 2022, Russia passed legislation outlining conditions to impede the return of leased aircraft to foreign lessors, including the need for approval from a government committee and payment of settlements in Roubles. Many aircraft operated by Russian airlines had been registered with the Bermuda registry, which suspended airworthiness approvals on 14 March. The same day, Russia implemented a law allowing aircraft operated by Russian airlines to be re-registered with the Russian registry, effectively confiscating them from their overseas owners. Some 515 commercial aircraft, valued at approximately $10 billion, were leased by Russian airlines from foreign lessors prior to the sanctions. Lessors moved swiftly to repossess those few aircraft "stranded" outside Russia and reassigned some new aircraft due to be placed with Russian airlines, particularly Boeing 737 MAX that are now unlikely ever to be Boeing 737 MAX certification, recertified by Russia. By 22 March, 78 Russian aircraft had been repossessed, amid speculation that some Russian airlines were cooperating with lessors in order to avoid jeopardising future relations. Rossiya Airlines, a subsidiary of Aeroflot, had reregistered all its fleet with the Russian registry by 29 March, and ensured that any international flights would use only Russian-owned aircraft. By 30 March, Irish lessor AerCap had repossessed 22 of the 135 aircraft it had leased to Russian airlines, and 3 of the 14 engines on lease. It filed insurance claims totalling $3.5 billion for the remaining aircraft, many of which were "now being flown illegally by [its] former airline customers". Singapore-based lessor BOC Aviation had 18 aircraft worth $935 million on lease to Russian companies; it repossessed from Hong Kong one Boeing 747-8F leased to AirBridgeCargo but two other freighters were flown back to Russia contrary to explicit instructions, despite their insurance coverage and airworthiness certificates having been revoked. On 31 March, Russian Deputy Prime Minister Yury Borisov declared that all leased aircraft still in Russia had been re-registered and would remain in Russia. This represents over 400 aircraft whose leases have been terminated. However, re-registration of aircraft without their owners' consent is a breach of ICAO standards. Aeroflot gradually resumed international flights to "friendly" countries: to Kyrgyzstan from 14 March, Azerbaijan on 21 March, Armenia from 22 March, Iran from 2 April, Sri Lanka from 8 April, and Turkey and India from 6 May. On 2 June, an Aeroflot A330 belonging to an Irish lessor was temporarily impounded by a commercial court in Sri Lanka, though the aircraft was subsequently allowed to return to Russia on 5 June. On 13 May, Aeroflot announced that it had purchased 8 A330s from foreign leasing companies, under an exemption that allows the execution of a lease solely to obtain repayments. On 1 June, it emerged that five Russian airlines had kept a total of 31 aircraft outside Russia and returned them to lessors. Other airlines including Aeroflot have deposited money in special Rouble accounts to enable lessors to claim the amounts once sanctions are lifted. In August, S7 Airlines was given special permission to "export" its two 737 MAX aircraft to Turkey in order to return them to their lessor.


Airspace

On 24 February 2022, Ukrainian airspace was closed to civilian aircraft a few hours before the Russian invasion started, on the basis of a notification from the Russian Ministry of Defence. The European regulator EASA issued a Conflict Zone Information Bulletin (CZIB) warning that civilian aircraft could be misidentified or even directly targeted. On 25 February, the UK announced the closure of its airspace to Russian airlines. On 27 February, the EU and Canada closed their airspace to all Russian aircraft, including both commercial and private aircraft. Russia issued a reciprocal ban, forcing many airlines to reroute or cancel flights to Asian destinations. The US issued a similar ban on 1 March. On 8 March, Aeroflot suspended all its remaining flights to international destinations (except for Minsk, Belarus) due to airspace restrictions and to counter the "risk" of aircraft being repossessed by lessors. On 9 March, to avoid Russian airspace, Finnair started routing its flights to Asia over the North Pole, the first time a polar route has been used for commercial flights in nearly 30 years. An analysis of routes between Europe and Asia showed increased travel distances of between 1200 and 4000 km; the frequency of flights to some destinations has been reduced and other routes have been dropped. By 29 March 2022, the following countries and territories had completely closed their airspace to all List of airlines of Russia, Russian airlines and Russian-registered private jets: * *' *' *' *' *' * *' *' *' *' * * * * *' * * *' *' *' *' * *'' * (since 2015) * * (EU27) * * * * * * * * * * * * * * * * * * * * * * * * * * * In addition to airspace closure under sanctions, on 11 April EASA blacklisted 21 Russian airlines on safety grounds, given that aircraft are being operated without airworthiness certificates, in breach of the Chicago Convention and international safety standards. EASA clarified that the Russian air transport regulator, Rosaviatsia, had failed to provide evidence that it has the capacity to perform the oversight activities required to ensure air safety. The US Federal Aviation Administration also downgraded Russia's safety rating, meaning that no new services to the US and no Codeshare agreement, codeshares with US carriers are authorised. In May 2022, the UK announced that Russian airlines would be prohibited from selling their landing slots at UK airports, valued at approximately £50 million. The slots were subsequently reallocated to other airlines. At the end of May 2022, the Civil Aviation Administration of China (CAAC) closed its airspace to aircraft that have been re-registered with the Russian registry in breach of ICAO regulations and for which the airlines are thus unable to provide proper documentation.


Russian aircraft manufacturing industry

EASA revoked the type certificates of the Sukhoi Superjet 100, Tupolev Tu-204 and four other Russian aircraft types on 14 March, as well as approvals of maintenance organisations and third-country authorisations for Russian airlines. EASA also suspended all work on new certification applications, including the Irkut MC-21 airliner. Due to the need to source all aircraft components domestically, notably the Pratt & Whitney PW1000G, Pratt & Whitney PW1400G engines which will be replaced by Russian-built Aviadvigatel PD-14 units, production of the MC-21 is expected to be delayed by 2 years. In the meantime, production of older and less fuel-efficient Russian-built aircraft such as the Tupolev Tu-214 and Ilyushin Il-96-400 will be stepped up, and a fuel subsidy introduced. The Sino-Russian CR929 wide-body aircraft programme, which was already in difficulty due to the diverging expectations of the two parties, is also expected to suffer significant delays or even cancellation. On 7 June, Aeroflot announced plans to order 300 Russian-built aircraft, mostly the MC-21 and Superjet 100, as well as a smaller number of older Tupolev Tu-214s. On 27 June, the Russian government announced details of a plan to bring the proportion of domestically produced aircraft to 80% of the Russian fleet by the end of the decade. Serial production of the SSJ-New with all-Russian components is expected to begin in 2023. Deliveries of the MC-21 are expected to start in 2024 and reach a delivery rate of 72 per year by 2029. To fill the gap, around 70 new Tu-214s will also be produced. For regional aircraft, the plan calls for 70 Ilyushin Il-114-300s, up to 140 UZGA TVRS-44 Ladoga twin turboprops, and more than 150 UZGA LMS-901 single-engined aircraft to be produced by the end of the decade. On 29 June, the US government expanded its sanctions to cover United Aircraft Corporation (UAC) (the parent company of Irkut Corporation, Irkut, United Engine Corporation, United Engine, Tupolev, Ilyushin and others), with an exemption allowing UAC to export parts and services for civil aircraft not registered in Russia if necessary for aviation safety.


Aviation industry organisations and alliances

On 15 March, Aeroflot CEO Mikhail Poluboyarinov, who is targeted with EU sanctions, was removed from the IATA board of governors. In April, the two Russian airlines that were members of global airline alliances both saw their memberships suspended: S7 Airlines from Oneworld and Aeroflot from SkyTeam.


U.S. "freeze and seize" policy

The main United States sanctions law, IEEPA, blocks the designated person or entity's assets, and also prohibits any United States person from transacting business with the designated person or entity. Specifically, criminalizes activities that "violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, or prohibition," and allows for fines up to $1,000,000, imprisonment up to 20 years, or both. Additionally, United States asset forfeiture laws allow for the seizure of assets considered to be the proceeds of criminal activity. On 3 February 2022, John "Jack" Hanick was arrested in London for violating the sanctions against Konstantin Malofeev, owner of Tsargrad TV. Malofeev is targeted with sanctions by the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
and United States for material and financial support to Donbass separatists. Hanick was the first person criminally indicted for violating United States sanctions during the Russo-Ukrainian War, War in Ukraine. According to court records, Hanick has been under sealed indictment in the United States District Court for the Southern District of New York since November 2021. The indictment was unsealed March 3, 2022. Hanick awaits extradition from the United Kingdom to the United States. In the March 1, 2022 2022 State of the Union Address, State of the Union Address, American President Joe Biden announced an effort to target the wealth of Russian oligarchs. On March 2, 2022, U.S. Attorney General Merrick B. Garland announced the formation of Task Force KleptoCapture, an inter-agency effort. On March 11, 2022, United States President Joseph R. Biden signed , "Prohibiting Certain Imports, Exports, and New Investment With Respect to Continued Russian Federation Aggression," an order of economic sanctions under the United States International Emergency Economic Powers Act against several oligarchs. The order targeted two properties of Viktor Vekselberg worth an estimated $180 million: an Airbus A319-115 jet and the motoryacht ''Tango''. Estimates of the value of the ''Tango'' range from $90 million (U.S. Department of Justice estimate) to $120 million (from the website Superyachtfan.com). On April 4, 2022, the yacht was seized by Civil Guard (Spain), Civil Guard of Spain and U.S. federal agents in Mallorca. A United States Department of Justice press release states that the seizure of the ''Tango'' was by request of Task Force KleptoCapture, an interagency task force operated through the U.S. Deputy Attorney General. The matter is pending in the United States District Court for the District of Columbia. The affidavit for the seizure warrant states that the yacht is seized on probable cause to suspect violations of (conspiracy to commit bank fraud), (International Emergency Economic Powers Act), and (money laundering), and as authorized by American statutes on civil and criminal asset forfeiture.


Other entities

On 9 March 2022, the New Zealand Parliament passed the Russia Sanctions Act 2022, which allows for sanctions to be placed on individuals connected to the 2022 Russian invasion of Ukraine and targets their assets including funds, ships, and planes. New Zealand also created a blacklist targeting senior Russian officials and oligarchs. On 6 April, New Zealand also imposed a 35% tariff on Russian products while restricting industrial exports to Russia. The Bahamas, Antigua and Barbuda and Saint Kitts and Nevis also joined the list of imposing sanctions on Russia. On 2 May, Nuclear power in Finland, Finnish consortium Fennovoima announced that it had terminated its contract with Russia's state-owned nuclear power supplier Rosatom for the delivery of a planned nuclear power plant in Finland.


Summary of sanctions by regions

The sanctions campaign including: * ** ** ** ** ** ** ** *** *** ** ** ** *** *** *** *** *** *** *** *** *** *** *** ** ** ** ** ** ** ** ** ** ** *** *** *** *** *** *** ** ** *** *** ** ** ** ** *** ** * * * * ** ** ** * * * * * * * * * * * * * * * * * ** ** ** * * ** * * * * * * * * (including , , and ) **British Overseas Territories *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** **Crown Dependencies *** *** *** *** *** *** * ** ** ** ** **


Shifting of safe havens and sanctions evasion


Switzerland

Switzerland follows the EU sanctions and in response was put on the list of "unfriendly nations" by Russia. According to the Swiss Embassy in Moscow, Switzerland has long been "the most important destination worldwide for rich Russians to manage their wealth". The Bank for International Settlements estimates that Russian nationals have only $11 billion deposited in Swiss bank accounts, though other estimates are much higher: for example the Neue Zürcher Zeitung estimates the amount deposited to be CHF 150 billion and the Swiss Bankers Association states even between CHF 150 and 200 billion (between US$160 and 214 billion). As of July 2022, CHF 6.7 billion had been frozen by the Swiss authorities, according to Swiss authorities more than any other country has. The sanctions target 1156 people and 98 companies which were identified by the EU. Leading Russian opposition figures, including British financier Bill Browder, have criticised Switzerland by saying the country is not doing nearly enough, while granting Russia too many loopholes in Economy of Switzerland#Commodities trading, commodities trading, Crime in Switzerland#Loopholes, real estate investing or Banking in Switzerland#Loopholes, banking sector. However in May 2022, the Commission on Security and Cooperation in Europe, Helsinki Commission of the U.S. Congress accused Switzerland to be "a leading enabler of Russian dictator Vladimir Putin and his cronies"a claim that was strongly rejected by the Swiss government stating that "the country implements all sanctions that were decided by the EU and the Federal Council (Switzerland), Federal Council". The Federal Council of Switzerland called the allegations of the Helsinki Commission "politically unacceptable" and the President of the Swiss Confederation complained in a phone call with the US secretary of state Antony Blinken about the accusations. Switzerland hosted Recovery of Ukraine Conference in Lugano, an international conference in Lugano on 5 July 2022 to finance the rebuilding of war-torn Ukraine. Because of Economy of Switzerland#Commodities trading, its economic importance in the global energy trade as well as its democratic institutions Banking in Switzerland#Regulation, protecting personal investments by foreign nationals, Switzerland remains Russia-Switzerland relations#Trade, an important hub for Russian finance. In August 2022, Switzerland adopted new EU sanctions to ban all Russian gold imports. At the same time, new exceptions with respect to financial transactions related to agricultural products and oil supplies to third countries were also made public. In September, Switzerland stopped sharing tax information with Russia; Russia therefore no longer receives information about financial accounts Russian citizens have in Switzerland.


United Arab Emirates

Lured by the United Arab Emirates' flexible visa program, many wealthy Russians moved their money to the UAE. Property purchases in Dubai by Russians surged by 67% in the first three months of 2022. Around 200,000 Russians were estimated to have left the country in the first 10 days of the war. Investigations revealed that private jets and yachts belonging to sanctioned Russian oligarchs and billionaires were found in places like Dubai and the Maldives. A number of private jets belonging to sanctioned Russians were also tracked flying back and forth between Moscow and Tel Aviv, and between Russia and Dubai. Russians also attempted to shift their wealth from Switzerland, London or the EU to Dubai. They looked to investments such as real estate and buying into funds that do not disclose ownership information. Many of them were not just buying properties in Dubai, but were also interested in full residence. The UAE offers long-term residence visas through its "golden visa" program, which could allow these oligarchs to live, work, and study in the UAE with full ownership of their business. In May 2022, European Parliament members suggested that the UAE should be blacklisted for allowing sanctioned Russian oligarchs and other officials to invest in properties and businesses in Dubai. A Russian oligarch, Andrey Melnichenko (industrialist), Andrey Melnichenko was sanctioned by the European Union in March 2022, after claims that he attended a meeting with Putin on the day of the invasion. Following the sanctions, Italian authorities seized Melnichenko's $600 million A (sailing yacht), Sailing Yacht ''A''. Another yacht belonging to him, the $300 million A (motor yacht), Motor Yacht ''A'' was identified parked in a port in Ras al-Khaimah in the UAE. A $350 million Boeing 787 Dreamliner private jet belonging to Roman Abramovich was also grounded in Dubai. The US Department of Justice has an order from a US federal judge to seize the jet. Politicians and campaigners, including Danish MEP Kira Marie Peter-Hansen and campaigner Bill Browder, called for the UAE to be blacklisted for allowing the flow of "dirty money" and acting as a refuge for sanctioned Russians. On 23 June 2022, the ''Madame Gu'' superyacht, owned by sanctioned billionaire Andrey Skoch, was reported to have been docked at Port Rashid in Dubai since 25 March. It was designated as sanctioned property by the US. In June 2022, Russia's wealthiest oligarch, Vladimir Potanin moved his $300 million superyacht, Nirvana, to Dubai. Potanin is head of Nornickel, because of which the US or Europe did not impose any sanctions on him by then. Experts said such a move could affect the market and disrupts supply chains. Potanin's move to shift the luxury superyacht to Dubai's Port Rashid was a precautionary measure. An investigation by the Energy Intelligence revealed that UAE-based companies are marketing Russia's oil to escape European and international sanctions. EU sanctions forced traditional players such as Vitol,
Trafigura Trafigura Group Pte. Ltd. is a Singaporean-based Swiss multinational commodity trading company founded in 1993 that trades in base metals and energy. It is the world's largest private metals trader and second-largest oil trader having built or ...
and Glencore out of the market. As western sanctions ramped up, many new names appeared on shipping lists as cranes for Russian crude, some of which appear to have been incorporated in the UAE. The United Arab Emirates defends its stance on sanctions targeting Russian individuals by stating that it remains neutral and have not imposed sanctions. The UAE stated that its state policy complies with the international rights norms, stipulated by the United Nations Organization, which has not imposed any sanctions.


Georgia

Between the beginning of the 2022 Russian invasion of Ukraine, full-scale invasion of Ukraine and 2 December 2022, more than 10,000 Russian-owned businesses were registered in Georgia, many of them in remote villages. For example, the tiny village of Untsa, Adigeni Municipality, Adigeni has more registered Russian-owned businesses than inhabitants, as of October 2022. In a single empty house in the village of Vakhani, Kharagauli Municipality, Kharagauli there were over 200 registered Russian-owned businesses. In the context of a Russian emigration following the 2022 invasion of Ukraine#Georgia, massive immigration wave to Georgia, this has particularly contributed to rising fears that the country will become more economically dependent on Russia, more vulnerable to blackmail by Moscow, and that the Russo-Ukrainian War, war in Ukraine will drag on due to sanctions being evaded in countries like Georgia. For this reason, Georgians who help Russians take root in Georgia have been publicly upbraided as collaborators and traitors. Protests have been held in Georgia demanding the introduction of a Visa policy of Georgia, visa regime with Russia. The ruling Georgian Dream Government of Georgia (country), government has dismissed such a step as "irrational." The Federal Security Service, FSB has also sent agents to infiltrate Georgia amidst the immigration wave. Once exposed, the news "barely makes a ripple" in Georgia's media.


Effects on Russian economy

In April 2022, Russia supplied 45% of EU's List of countries by natural gas imports, gas imports, earning $900 million a day. In the first two months after the invasion of Ukraine, Russia earned $66.5 billion from List of countries by natural gas exports, fossil fuel exports, and the EU accounted for 71% of that trade. As of May 2022, the Russian Ruble showed an upward trend; inflation was also below expectations. Also in May 2022, the
Russian Central Bank The Central Bank of the Russian Federation (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...
last slashed its key rate by 300 basis points to 11% in order to stimulate local investments. The federal trade surplus was increased due to high prices for Russian commodity exports and a rapid fall in imports. On 27 May 2022, Russian Finance Minister Anton Siluanov stated that extra revenues from the sale of natural gas in the amount of €13.7 billion will be used to increase pension funds for retired individuals and families with children, as well for "special operations" in the Ukraine. Russia has also increased energy exports to China and India to make up for decreased revenues in Europe. Bloomberg reported that in the first half of 2022, Russia pocketed an extra $24 billion from selling energy to both nations. According to the IMF in its April 11, 2022 country report on Russia, the Russian economy is projected to see a -8.5% decrease in its real GDP in 2022, with inflation of 21.3% in that same year. Despite projected contractions in some economic sectors, Russia has so far managed to avoid defaulting on its foreign currency debt. Russian inflation came in at a two-decade high of 17.8% year-on-year in April, up from 16.7% in March, but inflation on basic commodities such as food and fuel were modest. Consumer price growth slowed sharply from 7.6% in March to 1.6% in April, in line with some Western countries. Citizens of the Russian Federation face surging inflation and Unemployment in Russia, unemployment, expensive credit, capital controls, restricted travel, and shortages of goods. Analysts have identified similarities with conditions in the decade following the Dissolution of the Soviet Union, collapse of the Soviet Union in 1991. Russia's Kaliningrad Oblast, Kaliningrad Enclave and exclave, exclave faces ever-increasing isolation. A source close to the Kremlin told the Russian-language independent news website ''Meduza'' that "There's probably almost nobody who's happy with Putin. Businesspeople and many cabinet members are unhappy that the president started this war without thinking through the scale of the sanctions. Normal life under these sanctions is impossible." On 27 June 2022, Bloomberg News, Bloomberg reported that Russia is poised to default on its foreign debt (eurobond (external bond), eurobonds), for the first time since 1918 after the Bolshevik revolution. According to the source, the country missed a debt payment due to sanctions on Russian banks. Finance Minister Siluanov dismissed the possible default status as a "farce", since Russia has plenty of funds to repay the debt. Associated Press reported that the official default on Russian's foreign debt would take time to be confirmed. Financial analysts described Russia's situation as unique, since it has extensive amounts of cash to fulfill its debt obligations. Despite massive Western sanctions, the Russian rouble had its highest evaluation against the US Dollar and Euro since 2015, and continued to trade higher than before the invasion. In late July 2022, the IMF upgraded Russia's GDP estimate by 2.5%, but some economists see a long-term problem for the Russian economy, and explain its resilience only by a short-term increase of energy prices. A Yale study projects a catastrophic outlook for Russian businesses if Western countries are able to keep up the sanctions against Russia's petrochemical industry. So far, Russia was able to leverage its economic power by cutting gas supplies to Europe, and play up its agricultural might as the largest wheat exporter globally. Western economists see long-lasting costs to the Russian economy from the exit of large foreign firms and brain drain, while Russia claims it has replaced those entities with domestic investments. Long term, Russia's economy will depend on the price development of fossil fuel energy, and Russia's continued economic alliances with countries that do not impose sanctions, including China, the Middle East, India, as well as nations in Africa and South America. Russia's gross domestic product contracted 4% in the second quarter of 2022, revised from 6.5%, with a 15.3% drop in wholesale trade, and a 9.8% contraction in retail trade. Despite the ongoing sanctions, 47 of the world's biggest 200 companies still have not left Russia, particularly energy companies remain invested there. U.K. energy giant Shell and Japanese trading firms Mitsui and Mitsubishi hold double-digit stakes in the Sakhalin-2 oil and natural gas project. On July 1, 2022, Putin signed a decree to allow the government to seize the Sakhalin-2 oil and natural gas project but further attempts to formally nationalize the assets of international firms were paused when the bill did not make it through the State Duma before the 2022 summer recess. According to Western analysts, remaining companies have experienced expropriation and nationalization pressures, but officially Russia has denied that it is interested in such actions. In August 2022, Russia's trade and industry minister Denis Manturov stated, "we are not interested in the nationalization of enterprises or their removal." In October 2022, the decree was approved, allowing a Russian state-run company to seize
ExxonMobil ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 3 ...
's 30% stake in the Sakhalin-1 oil and gas project, and to decide whether foreign shareholders, including Japan's SODECO, can retain their participation. Russia pumps almost as much oil as before its 2022 Russian invasion of Ukraine, 2022 invasion of the Ukraine. Sales to the
Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
and Asia have made up for declining exports of gas and oil to Europe, and due to the higher price, Moscow made $20 billion monthly compared to $14.6 billion a year before (2021). Despite international sanctions, Russian energy sales have increased in value, and its exports have expanded with new financing options and payment methods for international buyers. According to the Institute of International Finance, "Russia is swimming in cash", earning $97 billion from oil and gas sales through July 2022. According to a former Russian energy executive, "there came a realization that the world needs oil, and nobody's brave enough to embargo 7.5 million barrels a day of Russian oil and oil products". According to the Former First Deputy Chairman of the Central Bank of Russia Oleg Vyugin, sanctions imposed against Moscow over the conflict in Ukraine were only 30%-40% effective as Russia has found ways to overcome restrictions. He confirmed the contraction of the Russian economy by 4% in 2022 due to sanctions, but found this has been "no catastrophe" for the Russian Federation. Russia's current account surplusthe difference in value between exports and importshas been soaring due to declining imports, but he warned that a further embargo on Russian exports could reduce crucial revenues. He also added that the impact of US and European export controls in the technology sector will be felt with some delay. In October 2022, Russia's exports of crude to China had again surpassed Saudi Arabia's for the 3rd month. Significant increases were seen through the Eastern Siberia–Pacific Ocean oil pipeline and seaborne shipments from Russia's European and Far Eastern ports, up 7.6% from a year ago, according to Chinese customs data. Increased Russian oil exports are particularly significant during an overall decline of 9.5% crude oil imports into China due to lower economic growth. In December 2022, when the European Union implemented its oil embargo and price cap on Russian crude, economic news channels reported a drop of Russian oil exports by 54% in the first week. A number of oil companies were no longer using Russian cargoes, including Shell corporation and
ExxonMobil ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 3 ...
. But Russia was already sending nearly 90% of its oil to Asia before the sanctions were implemented. Shipowners in Asia as well were reportedly less likely to transport Russian crude after the European sanctions came into force. In late 2022, the Russian economy's relative resilience to Western sanctions was tested when financial sanctions seriously impacted Russia's VTB Bank, the country's No. 2 lender. VTB bank has frozen assets abroad worth around 600 billion roubles, and then purchased Otkritie FC Bank to make up for the loss (Italy's UniCredit was initially interested in a takeover). The Bank of Russia agreed to the sale for 233 billion roubles in cash and treasury bonds, increasing the share-value for Moscow-listed VTB. Dominant lender Sberbank, however, was less affected by financial sanctions and produced a quarterly profit. The central bank announced a bail-out of 555 billion roubles, and with the recent sale of Otkritie obtained a refund of 352 billion roubles.


Effects on neighbouring countries

Although the consequences of the conflict and the sanctions have harmed Russia's economy and seriously impacted trade through the Pan-European corridors, some countries neighbouring Russia, such as Armenia have experienced positive effects. Despite a sharp increase of real estate prices in the entire country of Armenia due to the influx of Russians, Russian migrants, Armenia's economic activity index grew around 12% in the first half of 2022, according to Eduard Hakobyan, director of Macroeconomic Policy Department at the Ministry of Finance of Armenia. Since Russia is an important trade partner for Armenia, it is believed that Armenia's economy should have suffered due to the war and the sanctions, and it has to some extent, but the growth in the direction of exports to Russia, foreign investments, and tourism. According to official reports, Armenia has been experiencing impressive development in some directions of the economy, mainly in the service and tourism-related sectors. Due to the intensive migration of the Russian population and the relocating of many companies to Armenia, foreign currency flow has also been mentioned in the economic growth of 2022.


Effect on global food supply

Western countries have accused Russia to interfere with wheat exports from Ukraine due to armed confrontations in Odessa and other Ukrainian ports. Later the Kremlin pushed back and accused the West of imposing sanctions on the Russian economy that hinder the export of wheat from the Russian Federation. Spokesperson Dmitry Peskov referred to Russia as "a rather reliable grain exporter". During a meeting with Italian Prime Minister Mario Draghi, Putin confirmed Russia's willingness to make "a significant contribution to overcoming the food crisis through the export of grain and fertilizer" but mentioned Western sanctions as the caveat. The head of the African Union, Senegalese President Macky Sall, remarked that the side effects of the EU's decision to expel many Russian banks from SWIFT will hurt the ability of African countries to pay for imported food and fertilizers from Russia. French President
Emmanuel Macron Emmanuel Macron (; born 21 December 1977) is a French politician who has served as President of France since 2017. ''Ex officio'', he is also one of the two Co-Princes of Andorra. Prior to his presidency, Macron served as Minister of Econ ...
responded that difficulties have nothing to do with EU sanctions. On 30 June, Russia withdrew its troops from Snake Island (Ukraine), Snake Island in an avowed goodwill gesture to not obstruct U.N. attempts to open a humanitarian corridor, allowing grains to be shipped from Ukraine. Later on 16 July, major news outlets reported that Kyiv is definitely a step closer to being able to export grain through its Black Sea ports after talks with Russia, facilitated by Turkey, and the United Nations. On 22 July 2022, the facilitated exports of Ukrainian grain via the Black Sea amid the ongoing war has been described as “a beacon of hope” by the UN Secretary-General António Guterres during the signing ceremony in Istanbul, Turkey. On 14 September 2022, UN Secretary-General Antonio Guterres reiterated his concerns over a constrained fertilizer supply from Russia due to the 2022 Russian invasion of Ukraine and subsequent economic sanctions. According to the source, UN diplomats held discussions to re-open the Togliatti-Odessa pipeline carrying ammonia. President Volodymyr Zelenskiy had offered such a move in exchange for the release of prisoners of war held by Russia. But TASS news agency quoted Kremlin spokesman Dmitry Peskov, who dismissed such a idea, as saying “are people and ammonia the same thing?”. At the 38th meeting of the Standing Committee for Economic and Commercial Cooperation (COMCEC) of the Organization of Islamic Cooperation (OIC) in Istanbul, Erdogan remarked that over 11 million tonnes of grain had been transported through the Black Sea Grain Corridor since the successful implementation of the Black Sea Grain Initiative. He also noted that the opening of the grain corridor through the Black Sea showed that a diplomatic solution is possible in the 2022 Russian invasion of Ukraine, conflict between Russia and Ukraine.Erdogan believes war in Ukraine can be stopped through diplomacy
''ukrinform.net''. Retrieved 5 December 2022.


See also

* * * * * * * * * * * * * United States sanctions


Notes


References

{{2022 Russian invasion of Ukraine Sanctions and boycotts during the Russo-Ukrainian War, +2022 2022 in economics 2022 in international relations Articles containing video clips Foreign relations of Russia Foreign relations of Ukraine International sanctions Reactions to the 2022 Russian invasion of Ukraine Russo-Ukrainian War Sanctions against Russia, Russian invasion of Ukraine