After strong new sanctions agreed upon at the G7 Summit in Germany on Sunday, meant to put pressure on President Vladimir Putin over the crisis with Ukraine, fresh shipments of Russian gold will no longer be permitted to enter the UK, US, Canada, and Japan.
With a value of 12.6 billion pounds in 2021, gold will be a significant export for Russia.
With billionaires scrambling to purchase gold bullion to mitigate the economic effects of western sanctions, its worth to the elite has also risen recently in Russia.
What is the Strategy?
UK Prime Minister Boris Johnson, present at the Bavaria meeting, stated that the actions we have outlined today would directly target Russian billionaires and strike at the core of Putin’s war machine.
Putin is wasting his little resources on this cruel and useless conflict. At the expense of the Ukrainian and Russia’s people, he is feeding his ego.
We must stop providing financial support to the Putin government. He said that’s precisely what the UK and our friends are doing.
London is a significant worldwide centre for the trade of gold. Therefore, the UK’s imposition of the first-ever sanctions of this sort on Russia anywhere in the world will significantly impact Putin’s ability to generate money.
Over 13.5 billion pounds of our imports from Russia will be subject to limitations due to the import prohibition on new origin gold from Russia.
London’s central position in the world’s gold trade demonstrates that the UK would take drastic measures to halt the Russian military machine, according to UK Chancellor Rishi Sunak.
I am happy that the US, Canada, and Japan will be helping us enforce this action, closing off routes for Russia’s gold sales and maximizing the impact we can have on Putin and his cronies, he added.
G7 Negotiations
This follows negotiations with other members of the G7 Finance Track.
The UK’s message at the G7 has been further to cut off Russia from the global financial system. Since the war between Russia and Ukraine started in February, the UK claims to have already imposed sanctions on over 1,000 people and 100 organisations.
The actions taken by the London Bullion Market to halt six Russian refineries in March were built upon the sanctions announced this week.
The soon-to-be-enacted import restriction on gold will cover all recently mined or processed gold. Russian gold that was previously exported from Russia is unaffected.
According to the UK government, there are no intentions to impose additional restrictions on Russia’s gold that was lawfully obtained before the import ban was placed.
As the UK commits further GBP 429 million in guarantees for World Bank funding to Ukraine, legislation to execute this most recent prohibition will be introduced in the UK Parliament.
