Russia was already the most sanctioned nation on the planet. As of Wednesday, it’ll extend its lead in the race to become this century’s pariah state par excellence.
The US, the EU and the G7 were poised to unveil a raft of new measures, including a complete ban on new investments, as retribution for apparent atrocities allegedly committed by retreating Russian forces in Bucha and other Ukrainian towns.
In addition to the investment ban, the US and its allies will roll out new restrictions on Russian financial institutions and state-controlled companies in a bid to inflict “acute and immediate” economic pain, according to officials who spoke ahead of the official announcement.
The news came as Janet Yellen moved to block Russia from making payments on its debt, and amid reports that Europe may sanction Putin’s daughters, Katerina and Maria. Also in the crosshairs: The family members of wealthy Russians and unidentified propaganda outlets.
Moscow stole the sanctions crown from Putin’s ally in Tehran following the onset of hostilities in Ukraine. Castellum, a database that monitors global sanctions, shows measures adopted against Russian individuals and entities have nearly tripled since the invasion (figure below).
The total sanctions — more than 8,000 as of April 5 — included 1,675 imposed by the US, 1,140 by Canada, 1,124 by Switzerland, 1,114 by the UK, 953 by the EU, 944 by France, 783 by Australia and the balance by Japan.
Some of the measures are purely symbolic. Sanctioning Putin’s daughters is every bit as asinine as Trump sanctioning Khamenei, which I likened to sanctioning the Easter Bunny. Nevertheless, it’ll likely irritate the Kremlin.
To state the obvious (again), the only incremental sanctions with the potential to severely undercut Putin’s regime would be a complete European energy embargo, gas included.
The table (below from Castellum) gives you a sense of what doors are still open. I’ll present it without further comment.
H – In your earlier post today on sanctions, you mentioned Severstal’s inability to service its debt due to Citi’s reluctance to approve the payments. It’s a perfect example of the multiplier effect of the sanctions, which seem to be complex and require judgement calls by bankers. No one wants to be the person who signed off on a payment that triggers an OFAC fine (not career enhancing!) OFAC rarely offers guidance, so the default becomes to do nothing.
Iraqi sanctions in the 1990 -2003 period were pretty straight forward – there were only a few entities with foreign accounts and they were all frozen. From the outside, these look like an administrative nightmare, which means that banks will err on the side of caution.