THE west has severed trading relationships with Vladimir Putin’s Russia on a scale thought unimaginable only a week ago.
news
March 4, 2022
OWN CORRESPONDENT
6 min read
How the west has responded to the invasion of Ukraine
The Russian President, Vladirmir Putin
Story highlights
Governments are imposing sanctions against Russia
European and American companies have severed ties
Russia’s largest and third-largest lenders were not cut off from Swift
As tanks edge towards Ukraine’s capital Kyiv, governments around the world have taken coordinated action, using sanctions to target Russia’s banking system, state-controlled companies and powerful oligarchs.
Under self-imposed restrictions, companies in Europe and the US have followed suit, with energy firms severing corporate ties and brands refusing to export their consumer goods. Here are the actions taken so far:
Banking
The day after Russia invaded Ukraine, excluding Russian banks from Swift was described by one EU minister as a “very last resort”. Now it is happening: under EU sanctions, seven Russian banks, including VTB, the second-largest, will be excluded from Belgian-based Swift, the bank messaging system that underpins global trade.
Being locked out of the world’s dominant bank messaging system means Russia will have to resort to more cumbersome alternatives, possibly fax machines, although Russia’s central bank says it has a domestic equivalent.
Sberbank and Gazprombank, Russia’s largest and third-largest lenders, which are used for oil and gas payments, were not cut off from Swift.
These banks, however, have been under sanctions limiting their access to EU capital markets since Russia’s annexation of Crimea in 2014.
Oligarchs
The UK government has blacklisted a handful of business people already subject to US sanctions and claims to be preparing a “hitlist” of oligarchs with links to Putin, but has taken no action so far.
However, Boris Johnson has backed the formation of a property register that would identify Russian oligarchs, a move that the Labour MP Chris Bryant said prompted Chelsea owner and Russian billionaire Roman Abramovich to begin selling his £200m portfolio of homes.
Officials in Brussels have already moved to ban prominent individuals from travelling to and from the EU and frozen the assets they hold in the region, along with 53 businesses and organisations connected to the Russian state.
Aviation and shipping
At least 30 countries have banned Russian planes from their airspace, deepening Russia’s isolation from the world. The US became the latest to announce a prohibition of all Russian passenger, cargo and charter flights, joining Canada, the EU and the UK. Moscow has responded with tit-for-tat bans that end the busy flow of traffic in the skies. Before the ban, 300 flights a day left Russia to land or fly over the EU, while EU carriers landed 50 planes and flew 90 over the world’s biggest country by land area. In a move targeting oligarchs, Russian nationals will not be able to charter planes to fly into the EU or use private jets in the UK.
The move will also impose costs on western planes bound for Asia that will be obliged to make costly and time-consuming detours around Siberia. EU officials estimate an extra four hours could be added to a flight from northern Europe to an Asian destination.
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One of Russia's largest banks, Sberbank
Brands
Apple said it was pausing sales in Russia while Nike prevented Russian customers from buying online, joining a growing list of companies to distance themselves from the country in response to its invasion of Ukraine.
Nike confirmed it was switching off web sales in Russia, although the brand said on its Russian website that shoppers could visit local Nike stores, of which there are several in Moscow, St Petersburg and other cities.
Meta, which owns Facebook, said posts from Russian state media are no longer being recommended to users by Facebook’s algorithm, with Instagram to soon follow suit, according to the tech news website, The Verge. This development comes after the company said it restricted access to Russian state media accounts in Ukraine, blocked Russian state media from running ads on the platform and said it took down posts related to a disinformation campaign targeting Ukraine.
The carmaker Ford suspended its commercial van joint venture in Russia “until further notice”. It is among several automakers, including rival General Motors, Jaguar Land Rover and Renault, to halt sales and operations in Russia in the last few days.
Adidas, Europe’s largest sportswear manufacturer, suspended its partnership with the Russian Football Union, while The Walt Disney Company, which owns Marvel Studios, 20th Century Studios and Pixar, said it was pausing its release of films in Russia, including its anticipated Pixar film Turning Red, “given the unprovoked invasion of Ukraine and the tragic humanitarian crisis”.
Apple said it was pausing sales in Russia while Nike prevented Russian customers from buying online, joining a growing list of companies to distance themselves from the country in response to its invasion of Ukraine.
Nike confirmed it was switching off web sales in Russia, although the brand said on its Russian website that shoppers could visit local Nike stores, of which there are several in Moscow, St Petersburg and other cities.
Meta, which owns Facebook, said posts from Russian state media are no longer being recommended to users by Facebook’s algorithm, with Instagram to soon follow suit, according to the tech news website, The Verge. This development comes after the company said it restricted access to Russian state media accounts in Ukraine, blocked Russian state media from running ads on the platform and said it took down posts related to a disinformation campaign targeting Ukraine.
The carmaker Ford suspended its commercial van joint venture in Russia “until further notice”. It is among several automakers, including rival General Motors, Jaguar Land Rover and Renault, to halt sales and operations in Russia in the last few days.
Adidas, Europe’s largest sportswear manufacturer, suspended its partnership with the Russian Football Union, while The Walt Disney Company, which owns Marvel Studios, 20th Century Studios and Pixar, said it was pausing its release of films in Russia, including its anticipated Pixar film Turning Red, “given the unprovoked invasion of Ukraine and the tragic humanitarian crisis”.
Energy companies
Russia’s largest foreign investor, BP, led the way with its surprising announcement on Sunday that it would exit its 20% stake in state-controlled Rosneft, a move that could result in a $25bn write-off and cut its global oil and gas production by a third.
Shell will end its joint ventures with Russian state energy firm Gazprom, which are worth about $3bn and were poised to generate huge profits for the company over the next 30 years. The Guardian
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