UK Treasury Imposes Sanctions Against Central Bank of Russia

By Staff, Agencies

The UK government has announced it intends to take further restrictive economic measures against Moscow over the developments in Ukraine by targeting the Central Bank of the Russian Federation [CBR].

The move, announced by the Chancellor of the Exchequer, in coordination with the Governor of the Bank of England, is being taken "in concert with the US and the European Union", says the statement.

It is implemented in order to prevent the CBR from "deploying its foreign reserves in ways that undermine the impact of sanctions imposed by us and our allies, and to undercut its ability to engage in foreign exchange transactions to support the Russian rouble".

The UK Government has emphasized that it will ensure the necessary steps to bring into effect "restrictions to prohibit any UK natural or legal persons from undertaking financial transactions involving the CBR, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation. The UK Government intends to make further related designations this week, working alongside our international partners."

"These measures demonstrate our determination to apply severe economic sanctions in response to Russia’s invasion of Ukraine. We are announcing this action in rapid coordination with our US and European allies to move in lock step once more with our international partners, to demonstrate our steadfast resolve in imposing the highest costs on Russia and to cut her off from the international financial system so long as this conflict persists," stated the UK Chancellor.

The Governor of the Bank of England, Andrew Bailey, added that the bank continued to "take any and all actions needed" to support the British government’s response to the "Russian invasion of Ukraine".

The new UK sanctions include:

• Restrictions prohibiting UK individuals from undertaking financial transactions involving the CBR, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation.
• Restrictions against Russian financial institutions.
• In addition to the prohibition of the Russian state raising sovereign debt in the UK, the new measures will bar Russian companies from issuing transferable securities and money market instruments in the UK.
• Designated banks will be prevented from accessing Sterling and clearing payments through the UK.
• A set of new trade restrictions against Russia will include a prohibition against the export of a range of high-end technical equipment and components in sectors such as electronics, telecommunications, and aerospace.

The UK government said that its announced package of sanctions was “the strongest” that the country had ever enacted against Russia.

Sanctions were touted as set to “devastate Russia’s economy”, by directly targeting President Vladimir Putin and his inner circle, including Foreign Minister Sergey Lavrov.

Furthermore, over 100 companies in Russia’s banking and defense sector and individual businessmen are being slapped with “sanctions worth 100s of billions of pounds, asset freezes and travel bans.” The sanctions include asset freezes on VTB, Russia’s second largest bank, and state company Rostec. As part of the earlier measures announced by UK Prime Minister Boris Johnson, Britain banned Aeroflot and all other Russian commercial and private jets from its airspace.

The statement released on Monday added that the UK was working “in lock step with allies to go further and exclude Russian banks from the SWIFT financial system.”

The UK government added that sanctions would also shortly be implemented on 571 members of the Duma and Federation council who sanctioned the special operation in Ukraine.

Earlier, Russia formally recognized the Donetsk and Lugansk People's Republics [DPR and LPR] amid intensified shelling of their territory by Kiev's forces. Moscow proceeded to launch a military operation in Ukraine on 24 February in response to a request for assistance from DPR and LPR, with the goal of neutralizing Ukraine's military capacity with precision strikes.

Russian President Vladimir Putin said the goal of the special operation was to protect the Donbass republics after the "demilitarization and denazification" of Ukraine. The Russian Defense Ministry repeatedly stressed that armed forces won't attack any cities or civilian infrastructure and will be only aim at the Ukrainian military's targets.