Explain: How the G-7 ban on Russian gold will work

WASHINGTON: Russia appears to have defaulted on its foreign debt for the first time since the 1917 Bolshevik revolution, and the US and its allies are targeting gold, the second-largest export industry after the former Soviet Union’s energy.
On Tuesday, a group of seven countries will formally announce the ban Russian gold Import in the latest round of sanctions Vladimir PutinInvasion of Ukraine.
The United States has said Russia has used gold to support its currency to avoid the effects of sanctions. One way to do that is to exchange gold for more liquid foreign exchange that is not subject to current restrictions.
While some experts say only a few countries are enforcing sanctions on gold, the move is largely symbolic, while others, including the administration, say a ban on Russian gold imports would target its ability to interact with the global financial system.
How a G-7 The ban on Russian gold will work:
How much gold does Russia have?
Secretary of State Anthony Blink told CNN on Sunday that gold is Russia’s second most lucrative export after energy and that about 90% of revenue comes from the G-7 countries, “cutting it, denying access to about $ 19 billion in annual revenue, is significant.” ”
“It cannot achieve what is needed to modernize its defense sector, to modernize its technology, to modernize its energy research,” Blink said.
Russia began increasing its gold purchases in 2014 after the United States imposed sanctions on Russia over Putin’s invasion of Crimea. The country now has $ 100 billion to $ 140 billion in gold reserves, which account for about 20% of Russia’s central bank, according to U.S. officials.
How will the Gold Ban work?
While Russia will still be able to sell gold to other countries outside the Group of Seven jurisdiction, it will “affect Russia’s ability to generate export earnings,” says Chris Wafer, a Russian economics analyst at consulting firm Macro-Advisory.
“It is a high level of export achievement that sustains the country and sustains the economy since the sanctions were lifted after February 24,” Wafer said.
In practice, it can result in civil or criminal penalties for people who come from countries that have agreed to a ban on gold from Russia.
In practice, it could impose secondary sanctions on those who trade with Russia, as well as confiscate gold exports to countries participating in the embargo. ???
Swiss customs officials said Friday they are tracking about three tonnes of Russian gold – valued at more than 2 202 million – that entered Switzerland from the United Kingdom last month as they monitor possible violations of economic sanctions against Russia.
What other measures have been taken on gold trade?
In March, the US and its allies moved to block financial transactions with Russia’s central bank, including gold, aimed at further restricting the country’s ability to use its international reserves. Came after a call from members Congress To ban Russia’s gold trade.
The Treasury Department issued guidelines prohibiting American individuals, including gold dealers, distributors, wholesalers, buyers and financial institutions, from buying, selling or facilitating gold-related transactions involving Russia and various parties in general.
How will this punish Russia?
Like the thousands of sanctions imposed on Russia by various media, the gold import ban is meant to isolate Russia economically, starve its funds and prevent money-laundering.
British Prime Minister Boris Johnson At the G-7 meeting in Elmau, Germany, he said the sanctions “would directly hit Russian Aligarh and strike at the heart of Putin’s war machine.”
“Putin is wasting his dwindling resources on this meaningless and uncivilized war. He is bankrolling his ego at the expense of both the Ukrainian and Russian peoples,” Jones said.
a White House The official told reporters that sanctions are another way to block the passage between the Russian economy and the wider global financial system.


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