A Rundown Of The Sanctions Imposed On Russia

In recent weeks many countries have responded to Russia’s invasion of Ukraine with some form of sanctions. Mostly economic sanctions, the Western Governments are seeking to target individuals and groups with close links to the Russian government. This is intended to put pressure on the government and reduce any support for them, as citizens are being impacted by more comprehensive sanctions such as the reduction in goods and services available to them.

Sanctions Imposed by Other Countries

Perhaps one of the most major sanctions imposed on Russia, the EU has sanctioned several Russian banks by requiring their removal from the global banking system SWIFT (Society for Worldwide Interbank Financial Telecommunication). Financial institutions such as banks seek membership of SWIFT as it provides the means to make secure financial transactions across the globe. Limiting Russian access to this system would make it much more difficult for their banks to send and receive money from outside accounts. Not all Russian banks have been included in this sanction, as Europe relies on Russia for much of its energy supply - institutions which provide the payment systems for energy transactions remain in the SWIFT system for the time being.

The EU has also taken action against Russian media outlets and banned two high-profile Russian media companies from broadcasting within its territory. In a statement on 27th February 2022 President Von Der Leyen of the European Commission stated the EU are ‘developing tools to ban their toxic and harmful disinformation in Europe.’ This step highlights the significance of disinformation and media spin when it comes to influencing public opinion on high-profile issues. The ban has been effective, removing the channels from within the EU and also within the United Kingdom.

Reuters

Other financial sanctions have been introduced by the US. The Office of Foreign Assets Control has released information on their sanctions programme imposed on Russia. Financial transactions from individuals in the US to anyone on the sanctions list have been prohibited unless they have a specific exception to do so. To ensure compliance with this sanction, there is the potential for a $250,000 fine for individuals breaching this sanction without the required licence. President Biden has signed an executive order on 8th March 2022 banning the import of oil, coal and gas products from Russia with the aim to ‘further deprive President Putin of the economic resources he uses to continue his needless war of choice.’

The UK has introduced sanctions on Roman Abramovich, the owner of Chelsea Football Club. These sanctions resulted from Abramovich’s links to the Russian government. As a result, the club can no longer make money from the sale of tickets or merchandise which is a major blow to their financial capabilities. The EU has also placed their own sanctions on Abramovich in their recent update to the list of sanctioned individuals. These sanctions include travel bans and financial freezes which aim to impact those with links to the Russian government. These types of targeted sanctions are generally favoured by those imposing them, as they only impact people and officials close to the government, rather than all citizens of the sanctioned country.

Companies Responding to the Situation

Companies have faced social pressure over the situation with Russia and no doubt many have acknowledged that continuing business there will hurt their brand reputation. The variety of businesses suspending or completely removing trade with Russia is diverse, including Pfiizer, Sony Pictures and many banking and financial companies. PayPal, Apple Pay and Google Pay have barred some Russian banks from their services, meaning that their services are now unavailable for use in Russia. Global law firm Linklaters has announced the closure of their Russian office and have stated that they will not act for any individuals or companies with links to the Russian state.

Ukrainian President Zelenskyy personally criticised food producer Nestlé for remaining active in Russia on 18th March. He accused the company of a ‘thirst for profit’ motivating their decision to remain in Russia. Nestlé defended their decision stating that they only continue to ship essential products into Russia and have suspended all other profit-making sales. This highlights how commercial decisions have been scrutinised through a moral lens in the developments between Ukraine and Russia, with companies taking account of social pressures when making such business decisions.

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Many of the companies suspending trading and operating in Russia acted by themselves before major economic sanctions were imposed on the country. With so many companies making these decisions the Russian population will be left with fewer choices as to where to spend their money. This, combined with the sanctions on their financial institutions, will result in much change in the Russian economy and purchasing power of ordinary people. Panic buying has surged as people stock up on products for fear of increasing prices and demand for imports.

Since the Russian invasion of Ukraine many Western countries have acted to impose sanctions on both individuals connected to the Russian government and the country in general. Sanctions have mainly been economic in nature so far as Western governments and institutions seek to put pressure on President Putin. Whether these sanctions are effective, or further measures are required, remains to be seen, with President Putin remaining committed to the military action in Ukraine.