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Ukraine: What sanctions are being imposed on Russia? | Ukraine: What sanctions are being imposed on Russia? |
(1 day later) | |
Western nations are imposing increasingly severe sanctions on Russia following its invasion of Ukraine. | |
The measures are designed to cripple Russia's economy and punish its government for taking military action. | The measures are designed to cripple Russia's economy and punish its government for taking military action. |
What is a sanction? | What is a sanction? |
A sanction is a penalty imposed by one country on another, often in order to stop it acting aggressively or breaking international law. | A sanction is a penalty imposed by one country on another, often in order to stop it acting aggressively or breaking international law. |
Sanctions are often designed to hurt a country's economy or the finances of individual citizens such as leading politicians. They can include travel bans and arms embargoes. | |
They are among the toughest measures nations can use, short of going to war. | They are among the toughest measures nations can use, short of going to war. |
What sanctions are Western nations imposing? | What sanctions are Western nations imposing? |
Swift | |
The European Union, US, UK and allies have agreed to remove selected Russian banks from the Swift messaging system, which enables the smooth transfer of money across borders. | |
The action is aimed at cutting Russia off from the international financial system and to "harm their ability to operate globally". | |
What is Swift and why is banning Russia so significant? | |
A ban from Swift will delay the payments Russia gets for exports of oil and gas. | A ban from Swift will delay the payments Russia gets for exports of oil and gas. |
However, Russia could get paid through other systems - for example, China's Cross-Border Interbank Payment System. | However, Russia could get paid through other systems - for example, China's Cross-Border Interbank Payment System. |
The ban will also affect companies owed money by Russia - and cause disruption to some countries' energy supplies. | |
Russia's central bank | |
The Bank of Russia headquarters in Moscow | |
Western leaders have agreed to freeze the assets of Russia's central bank, to limit its ability to access its $630bn international dollar reserves. | |
In co-ordination with the US and the EU, the UK government has also banned British people and businesses from making transactions with the Russian central bank, its finance ministry and its wealth fund. | |
Russia central bank urges calm amid cash run fears | |
Targeting a central bank of a G20 nation is unprecedented and designed to "push the whole of Russia in to as deep a recession as possible, with the added chaos of bank runs", says BBC economics editor Faisal Islam. | |
After its currency, the rouble, slumped by 30% against the US dollar, Russia has more than doubled its key interest rate in an attempt to stem the decline. | |
Other financial measures | |
State-owned Sberbank is one of the biggest Russian banks | |
On top of action on the Swift system and Russia's central bank, all major Russian banks are having their assets frozen and being excluded from the UK financial system. This stops them from accessing sterling and clearing payments through the UK. | |
The UK has also announced laws to stop major Russian companies and the state raising finance or borrowing money on UK markets, and placed a limit on deposits Russians can make to UK bank accounts. | |
EU measures have been announced targeting 70% of the Russian banking market and key state-owned firms, including defence firms. | |
Exports to Russia | |
The UK, EU, US and other countries have announced curbs on products that can be sent to Russia. These include dual-use goods, which are items that could have both a civilian and military use, like high-tech items, chemicals or lasers. | |
The EU is aiming to make it impossible for Russia to upgrade its oil refineries with an export ban on certain materials. It is also banning the sale of aircraft and equipment to Russian airlines in an attempt to damage its economy and connectivity. | |
Targeting individuals | |
Western government have also imposed sanctions on some individuals. | |
These include Russian President Vladimir Putin and his Foreign Minister Sergei Lavrov, whose assets in the US, EU, UK and Canada will be frozen and, in the case of the US, a travel ban imposed. | |
The EU, UK, US and Canada have launched a transatlantic task force to identify and freeze the assets of sanctioned individuals and companies, targeting more "officials and elites close to the Russian government, as well as their families". | |
The UK is limiting the sale of citizenship via "golden passports", which allow wealthy Russians to become citizens. | |
Who is not on the UK sanctions list? | |
West orders sanctions on Russia's Putin and Lavrov | |
Other measures | |
Germany has blocked the Nord Stream 2 pipeline from Russia from coming into operation | |
The EU has announced a blanket ban on Russian flights. Russian aircraft are unable to land in, take off from or fly over any EU nation, meaning longer journey times, and have also been barred from UK airspace | |
The EU is also going to ban Russia's state-owned news outlets Sputnik and Russia Today | |
Germany has put on hold permission for the Nord Stream 2 gas pipeline from Russia to Germany to open | |
The UK, US and Australia are also imposing financial sanctions on Belarus for its role in the assault on Ukraine | |
What other sanctions could Russia face? | What other sanctions could Russia face? |
Western nations could also look at the option of blocking Russian oil and gas exports - which make up a fifth of Russia's economy and half of its earnings from exports. | Western nations could also look at the option of blocking Russian oil and gas exports - which make up a fifth of Russia's economy and half of its earnings from exports. |
Refusing to buy its oil and gas would be a very tough sanction, but it would also be damaging to Western nations that rely on it. | |
Russia supplies 26% of the EU's crude oil and 38% of its gas. Even a brief cut in gas supply would raise energy prices. | Russia supplies 26% of the EU's crude oil and 38% of its gas. Even a brief cut in gas supply would raise energy prices. |
Rossiya Bank is one of five banks sanctioned by Britain | Rossiya Bank is one of five banks sanctioned by Britain |
How has Russia reacted to the sanctions? | How has Russia reacted to the sanctions? |
Russia's foreign ministry has threatened sanctions of its own against the West. This may include reducing or shutting off gas supplies to Europe. | Russia's foreign ministry has threatened sanctions of its own against the West. This may include reducing or shutting off gas supplies to Europe. |
British airlines have now been banned from Russian airspace or landing at Russian airports, and in a retaliatory move, Russia's biggest airline, Aeroflot, said on Sunday it would cancel all flights to European destinations until further notice. | |
Hitting the Russian banking sector is likely to damage firms which do business in Russia, or have assets in its banks, and the export ban on high-tech goods will hit many Western manufacturers. | Hitting the Russian banking sector is likely to damage firms which do business in Russia, or have assets in its banks, and the export ban on high-tech goods will hit many Western manufacturers. |