Chancellor Rishi Sunak has urged businesses to reconsider their investments in Russia as the government continues to try to “inflict maximum economic pain” on the country.
Welcoming the decision of some firms to reduce or sell investments in Russia in the light of its invasion of Ukraine, Sunak asked businesses to “think very carefully about their investments in Russia and how they may aid the Putin regime”.
‘No case’
He added: “I am also clear that there is no case for new investment in Russia. We must collectively go further in our mission to inflict maximum economic pain – and to stop further bloodshed.”
Sunak and economy secretary John Glen met fund managers and financial leaders last week to discuss British investments in Russia, according to the Guardian.
Reuters reports that the Treasury recognises that winding down Russian investments may be a long-term process for some firms and has pledged to support them divest.
Boycotts
BP, Shell and Centrica are amongst the wide range of British businesses to have recently announced plans to cut ties with Russia, reports the Daily Mail.
British American Tobacco (BAT) has also announced that it will offload its Russian business, while Imperial Brands has said it is pausing production in Volgograd, as well as all sales and marketing activity in the wider country.
Debt default
The International Monetary Fund has warned that financial sanctions are increasing the likelihood of a Russian debt default, reports the Guardian.
Its managing director, Kristalina Georgieva, said: “In terms of servicing debt obligations, I can say that we no longer think of Russian default as an improbable event. Russia has the money to service its debt, but cannot access it.”
Rouble debt payments
According to the FT, Russia has threatened to pay international bondholders in roubles rather than dollars just days before Moscow is scheduled to make a combined $117m in interest payments this Wednesday.
International investors hold around $170bn in Russian assets, according to the FT’s calculations. Finance companies have had to write down their value.
Trade sanctions
As well as the wide range of financial sanctions, western countries have also expanded embargoes and controls on exports to Russia.
Last week the UK government announced that it had expanded trade sanctions to include bans on aviation and space-related goods and technologies to the country.
The UK’s Export Control Joint Unit (ECJU) has also announced that Belarus – a close ally and abetter of Russia in its invasion of Ukraine – would be removed as a permitted destination for a range of licensable goods.
Latest guidance
The IOE&IT recently hosted a free webinar to 1,400 businesses about how to comply with the new trade sanctions and export controls imposed on Russia.
The US has also published a new webpage gathering the latest information related to its own sanctions on Russia and Belarus.