With an aim to curb Moscow’s export earnings and impede its capacity to finance the conflict in Ukraine, the US and the UK have launched a crackdown on trades involving Russian metals.
The announcement is meant to follow up on the Group of Seven nations’ commitment in February to reduce Russia’s revenues from metals as its invasion into Ukraine has dragged on for more than two years.
Initially, the US and its allies hesitated to impose sanctions on Russia’s metals sector at the outset of the full-scale invasion of Ukraine in 2022, concerned about potential disruptions to global commodity markets. However, following the G7’s efforts to limit Moscow’s revenues from crude oil and petroleum exports, including implementing a price cap on seaborne oil trades facilitated by western shipping services, sanctions against Russian metals have been started.
These measures involve a ban on importing Russian-origin metals into the US, prohibiting warranting services for the metals and banning services related to acquiring the metals as part of the physical settlement of derivative contracts.
Russia is a key exporter of metals like aluminum, steel and titanium but British and American officials, who spoke on the condition of anonymity to preview the announcement, said the economic impact from the ban would be negligible for consumers and producers.
Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine, said Treasury Secretary Janet Yellen in a news release.
By taking this action in a targeted and responsible manner, we will reduce Russia’s earnings while protecting our partners and allies from unwanted spillover effects,” she said.
The officials said new Russian metals will not be allowed to be traded on the exchanges, including the London Metal Exchange and Chicago Mercantile Exchange. However, metals produced before midnight Saturday in London will be permitted.
Since Russia’s invasion of Ukraine, the US and EU have levied sanctions on Russia’s biggest banks and its elite, frozen the assets of the country’s Central Bank located outside the country and excluded its financial institutions from the SWIFT bank messaging system.
The US and UK have also previously sanctioned Russian gold, gas and diamonds.
With inputs from agencies.
