EU prohibits doing business with Bank of Russia – El Financiero

Posted On: March 5, 2022

presidential government Joe Biden on Monday banned American individuals and companies from doing business with Russian BankRussian National Wealth Fund and Ministry of Finance.

Measures of the Office of Foreign Assets Control of the United States Department of the Treasury They will “effectively cripple” the assets of the Russian central bank in the US or from US citizens, according to a statement from the Treasury.

The United States also announced new sanctions against Russia’s main sovereign wealth fund, the Russian Direct Investment Fund, and its chief executive, Kirill Aleksandrovich Dmitriev, a close ally of Russian President Vladimir Putin.

These moves mark the latest blow in Western financial retaliation against Russia after invasion of Ukraine by Putin and designed to destabilize Russia’s already shaken financial system.

“Unprecedented action we are taking today would significantly limit Russia’s ability to use assets to finance its volatile activities and will target the funds that Putin and his inner circle rely on to enable his invasion of Ukraine,” Treasury Secretary Janet Yellen said in a statement.

A US and EU freeze on Russia’s central bank assets would tie up nearly half of Putin’s war chest, according to a Treasury spokesman. About 13 percent of the central bank’s reserves are in China, he said.

That Putin’s war chest estimated at $630 billion in reservesofficials said, and the measures were aimed at hindering their ability to sell them to relieve financial stress at home.

Russia’s own data released in January showed that $100 billion of reserves were held in US dollars in June.

The US separately issues licenses that allow certain energy transactions with the central bank, an exception senior administration officials say is aimed at minimizing the impact on Europe and energy markets. It will take time for Russian institutions to figure out how to separate energy transactions from other measures, the official said.

The United States continues to work with European Union partners to finalize a list of banks to be excluded from SWIFT . system, said a second senior administration official. The European Union will finalize the list of banks as SWIFT is under Belgian authority.

US officials are monitoring the role Belarus in the Russian invasion, and the country will also face further consequences if it continues to aid and abet Russia, one of the officials added.

The move comes two days after the US, UK, Canada and the European Union said they would block SWIFT from major Russian banks, take action to prevent Russia’s central bank from saving the country’s economy and take steps to seize the yachts and residences of Russian oligarchs in Russia. Russia. West.

The UK Treasury said on Monday that it would act immediately to prevent people and companies from doing business with the Bank of Russia, Russia’s National Wealth Fund and the Ministry of Finance.

The move to isolate Russia from the world economy comes after an initial round of sanctions failed to persuade Putin to withdraw his troops from the US Ukraine.

That Bank of Russia acts quickly to protect the country’s $1.5 trillion economy massive sanctions, more than doubling its main interest rate to 20 percent, its highest in nearly two decades, and imposing some controls on capital flows.

Faced with the risk of a bank run, rapid asset liquidation and the ruble’s biggest depreciation since 1998, lawmakers banned brokers from selling securities held by foreigners starting Monday on the Moscow Stock Exchange.

Even before the new sanctions took effect, Russia’s financial system had collapsed.

That the ruble continues to fall against the dollarand the currency lost a third of its value on overseas markets during the trading session on Monday, hitting an all-time low of 109 per dollar in Moscow.

The announcement came as a Ukrainian delegation led by the defense minister began talks with Russian officials. ukraine president, Volodymyr Zelenskyexpressed skepticism that the talks, which are taking place on the country’s border with Belarus, would come to fruition, but said he was willing to try if it meant any chance of peace.