UK announces sanctions against Russia's central bank

The government has announced new measures targeting the Central Bank of the Russian Federation (CBR) in response to the invasion of Ukraine.

It said the new measures will prevent Russia’s central bank from “deploying its foreign reserves in ways that undermine the impact of sanctions” and “undercut its ability to engage in foreign exchange transactions to support the Russian rouble”.

The step is also being taken by the US and the European Union and follows a previous announcement by the UK of sanctions aimed at Russian president Vladimir Putin and the Russian economy.

Ursula von der Leyen, president of the European Commission, has also said that Russian banks will be excluded from the SWIFT system.

“We will also ban the transactions of Russia's central bank and freeze all its assets, to prevent it from financing Putin's war,” said the EU president in a statement on Sunday.

The government said it would take all necessary steps to prohibit any UK citizen from undertaking financial transactions involving the CBR, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation.

“These measures demonstrate our determination to apply severe economic sanctions in response to Russia’s invasion of Ukraine,” said chancellor Rishi Sunak. “We are announcing this action in rapid coordination with our US and European allies to move in lock step once more with our international partners, to demonstrate our steadfast resolve in imposing the highest costs on Russia and to cut her off from the international financial system so long as this conflict persists.”

The sanctions will prevent Russian companies from issuing transferable securities and money market instruments in the UK. They will also stop designated banks from accessing Sterling and clearing payments through the UK, matching the power the US already has.

Banks subject to this measure will be unable to process any payments through the UK or have access to UK financial markets.

“The Bank of England continues to take any and all actions needed to support the Government’s response to the Russian invasion of Ukraine,” said Andrew Bailey, governor of the Bank of England. “We welcome the steps taken today by the UK Government, in coordination with EU and US authorities, as an important and powerful demonstration of the UK’s commitment to the international rule of law.”

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