London, (Parliament Politics Magazine) – The world has come together in a united front against the Russian invasion of Ukraine by imposing heavy sanctions on Russia. Sanctions are consequences decided by countries on other countries if they have broken international laws. The sanctions are designed to impact the economy and finalize stability of the country at fault in the hope that they will take action to prevent further escalation of war.
Several sanctions have already ben put in place, global leaders in the West have frozen financial assets of the Russian central bank of £470 billion in reserve and banning business working with the Russian central bank. Other Russian banks have also been affected by being removed from the Swift messaging system which makes it difficult to transfer money into and out of Russia and any payments which do make it through will be delayed.
The UK has excluded Russian banks from the UK Financial system so payments cannot be cleared, and their assets have been frozen. Russian companies have been prevented from trading on the UK market and deposits from Russians into UK banks has also been limited. Defense companies have also been affected.
As well as targeting institutions with sanctions Western leaders from the US, UK, EU, and Canada are also targeting wealthy and influential high ranking Russian leaders and businesspeople known as oligarchs. Travel bans have also been imposed and visas limited. These individuals include Alisher Usmanov a wealthy businessman and Igor Shuvalov the former Russian deputy prime minister.
Trade with Russia has been heavily hit including bans on chemicals, lasers, and the sales of aircraft and components for Russian airlines. Even flights from Russian airlines have been banned in EU, UK, and US airspace.
Sanctions have not only been placed on Russia but also neighboring countries such as Belarus who have been accused of aiding Putin in invading Ukraine. Tobacco, cement, and wood exports from Belarus have been sanctioned by the EU. Belarus will face the same sanctions as Russia on its banks and individuals if it continues to show support to Russia.
As a result of these sanctions the value of the Russian Ruble had significantly dropped by 30%, in reaction to this to the interest rate in Russia has more than doubled. Russian officials have also said they will impose their own sanctions against the West in retaliation, blocking financial payments to foreign investors which is worth billions and freezing their assets. Russian airspace has also been closed off to British flights.
One way around the sanctions is to use cryptocurrencies such as Bitcoin, the cryptocurrency exchanges are refusing to impose sanctions on Russian investors as it is a free market that is designed to be independent of the banks.
There are even talks in the West from US and Europe of escalating these sanctions to include limiting Russian oil imports. This would have an even more significant impact on the Russia economy. Almost 40% of oil and gas in the European Union currently comes from Russia costing millions daily. The Nord Stream 2 gas pipeline which runs from Russia to Germany has been put on hold, but they have not sanctioned Russia as this would have a detrimental effect on Europe. Talks are also taking place in Washington DC to pass a bill to ban Russian oil imports. Russian has responded by threating to cut off all gas and oil supplies.