What are the sanctions on Russia and are they hurting its economy?
The US has introduced new sanctions against Russia, after President Putin signed treaties to annex regions of Ukraine.
EU countries are also considering further sanctions, to limit Russia’s ability to pay for war.
What are sanctions?
Sanctions are penalties imposed by one country on another, to stop them acting aggressively or breaking international law.
They are among the toughest actions nations can take, short of going to war.
What are the latest US and EU measures?
The US is imposing sanctions on 278 members of Russia’s parliament, for enabling the referendums to annex four regions of Ukraine. It is also targeting 14 people connected with its defence industries.
The US says it will also target organisations outside Russia which provide support for its military, or its annexation of Ukrainian territory.
A new round of sanctions, drawn up by the European Commission, proposes a further ban on Russian imports. It would also ban more hi-tech goods from being exported.
What sanctions have been imposed on Russia?
Western nations are trying to limit Russia’s access to money.
The US has barred Russia from making debt payments using foreign currency held in US banks.
Major Russian banks have been removed from the international financial messaging system Swift. This has delayed payments to Russia for its oil and gas exports.
The UK has excluded key Russian banks from the UK financial system, frozen the assets of all Russian banks, barred Russian firms from borrowing money and placed limits on deposits Russians can make at UK banks.
Oil and gas
Western nations have announced these sanctions:
- The European Union (EU) will ban imports of Russian oil brought in by sea from December
- The EU will ban all imports of refined oil products from Russia in February 2023
- The US is banning all Russian oil and gas imports
- The UK will phase out Russian oil by the end of 2022. It no longer imports Russian gas
- Germany has frozen plans for the opening of the Nordstream 2 gas pipeline from Russia
- The EU has stopped importing Russian coal
From December, the EU and G7 also want to cap the price countries pay for Russian oil.
They are telling importers of Russian crude oil that western insurers will not cover oil shipments if they pay more than the cap.
The EU has not imposed sanctions on Russian gas, because it relies on it for about 40% of its gas needs.
The US, EU, UK and other countries have sanctioned more than 1,000 Russian individuals and businesses – including so-called oligarchs.
These are wealthy business leaders who are thought to be close to the Kremlin, such as former Chelsea FC owner Roman Abramovich.
Assets belonging to President Putin and Foreign Minister Sergei Lavrov have been frozen in the US, EU, UK and Canada.
Superyachts linked to sanctioned Russians have been seized.
In New York, Russian aluminium magnate Oleg Deripaska has been charged with violating US sanctions.
The UK has stopped the sale of “golden visas”, which allowed wealthy Russians to get British residency rights.
What other sanctions have been imposed on goods and services?
- A ban on the export of dual-use goods – items with both a civilian and military purpose, such as vehicle parts – by the UK, EU and US
- A ban on all Russian flights from US, UK, EU and Canadian airspace
- An import ban on Russian gold
- A ban on the export of luxury goods to Russia
- The UK has imposed a 35% tax on some imports, including vodka
Many international companies have either suspended trading in Russia, or withdrawn altogether.
Are sanctions hurting Russia?
Russia’s ability to fund the war has been helped by high oil and gas prices.
David Fyfe, chief economist at research organisation Argus Media, says its crude oil revenues rose 41% over the past year.
“Oil sales make up 40% of Russia’s total exports, and so they are helping greatly to fund the war,” he says.
However, Mr Fyfe says sanctions are weakening Russia in other ways, “especially by blocking its access to the hi-tech components that its military sector needs”.
Russia’s economy in numbers*
- 17.1%Annual inflation in May
- 8-9%Retail trade set to fall this year
- 83.5%Car sales fall in May 2022
- 7.8%Official forecast of fall in Russian GDP in 2022
- 30%Unofficial forecast of GDP collapse by IIF
*Official sources: Akort; economy ministry; AEB; Rosstat
How has Russia reacted?
Russia has banned exports of more than 200 goods, including telecoms, medical, vehicle, agricultural, electrical equipment and timber products.
It is blocking interest payments to foreign holders of government bonds, and banning Russian firms from paying overseas shareholders.
And it has stopped foreign investors who hold billions of dollars worth of Russian investments from selling them.