SWIFT ban details and new limitations

Since last update there were following developments on the sanctions arena against Russia:

  • The details about SWIFT ban were revealed: sanctions will concern 7 banks: VTB, Otkrytie, Promsvyazbank, Sovcombank, Bank Rossiya, Novikombank and VEB. Those are banks that were previously sanctioned by the EU and the US. Thus, we do not expect additional material effect from this measure
  • Some exports and imports are being limited:
    • Some major transportation companies, including Maersk and Evergreen, announced their plan to stop transportation of goods to/from Russia
    • Britain banned entry to British ports to all ships that are Russian owned, operated, controlled, chartered, registered or flagged. Canada shuts its ports to Russian-owned ships later this week
    • Canada announced a ban on Russian oil imports. This is more a symbolic move, as Canada does not currently import any crude oil from Russia, and has not since 2019. The new ban will ensure this remains the case going forward. Once approved, this ban will be effective until further notice
    • Russian steel producer Severstal announced its decision to stop exports to Europe, its biggest export market, due to sanctions on its owner Alexei Mordashov.

Additionally, the EU parliament called for limiting of oil and gas import from Russia. Some EU countries are proposing to limit coal import from Russia. However, the discussion is not over yet. Europe imports about 40% of its gas, 35% of its crude oil and of 40% of its coal from Russia.

Currently, gas from Russia to Europe through pipelines in Ukraine goes at full capacity.

The Russian government announced additional measures to curb a massive withdrawal of funds from Russia in order to support rouble:

  • Non-resident investors will be unable to repatriate their assets from Russia for unspecified period of time
  • The CBR would suspend coupon payments to nonresident holders of ruble sovereign bonds (OFZs)
  • Investors from “unfriendly states”[1] will have to obtain permission in order to receive loans and borrowings in roubles
  • Russian residents would now require pre-approval of a government commission to obtain securities from “unfriendly states”
  • Ban to transfer from Russia cash in foreign currency in the amount equivalent to USD 10 000.

[1] Countries that imposed sanctions on Russia

 

Authors: Vladimir Tsuprov, CIO, Egor Kiselev, Head of International Business & Investment Marketing, Marina Tsutskiridze, Investment Specialist, Aleksandra Kuznetsova, Investment Specialist

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