Russia’s invasion of the Ukraine, which began in the early hours of this morning, will prompt the UK to impose the "largest and most severe package of economic sanctions that Russia has ever seen" that would “hobble” the country’s economy, prime minister Boris Johnson told MPs at 5pm today.
As the invasion of Ukraine unfolded across the day, Johnson gave some detail on planned sanctions – focusing mainly on the finance, defence and technology sectors - with more to follow in the coming days.
US president Joe Biden met G7 leaders today (Thursday) to co-ordinate “severe” further sanctions to punish Russia.
Export advice expanded
Johnson’s statement to the House of Commons came as the government said it will be expanding its Export Support Service to help businesses trading with Russia and the Ukraine deal with the invasion’s trade implications.
Legislation next week
Leading the list of sanctions announced today is a ban on major Russian companies from raising finance and sovereign debt on UK markets, with legislation to enforce this being tabled next Tuesday (1 March 2022).
Sanctions announced include:
- dual-use export licences to Russia covering components that can be used for military purposes to be suspended
- legislation to prohibit a wide range of hi-tech exports to Russia, including semiconductors, aircraft parts and oil refinery equipment
- legislation to prohibit Russian companies from raising finance on UK markets
- sanctions against more than 100 individuals, entities and their subsidiaries
- an imminent ban on the Russian airline Aeroflot
Johnson said the intention was to end "Europe’s collective dependence on Russian oil and gas" – though no new restrictions on Russian energy companies were announced.
Russia is a key producer of raw materials to Europe: the FT reports that a quarter of its oil and more than a third of its gas comes from Russia. It is also the world’s biggest supplier of wheat.
European natural gas prices soared by almost 70% while crude oil exceeded $105 a barrel for the first time since 2014.
Johnson added that “Russian investors are already delivering their verdict on Putin’s actions” with Russian stocks down in value by 45%.
Message from the Institute of Export & International Trade:
If your trade is affected by the Russian invasion of Ukraine, you can immediately reach out to the government’s Export Support Service here.
As this volatile situation evolves, the IOE&IT will keep you updated on official announcements and what they mean for you, through the Daily Update bulletin and on our social media channels: follow us on Twitter at @ioexport and on LinkedIn here.
The IOE&IT’s trade consultants are poring over sanctions details to hand and will host a free webinar – ‘How to ensure that you are fully compliant with UK trade sanctions against Russia’ – next Wednesday at 11am. More details to follow.