UK announces sanctions against Russian banks, high net worth individuals

British Prime Minister Boris Johnson addresses the nation at a press conference on a “Living with Covid” plan on February 21, 2022 in London, England.

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LONDON – The UK has imposed targeted economic sanctions on five Russian banks and three wealthy individuals following President Vladimir Putin’s decision to send troops to eastern Ukraine.

Speaking to lawmakers in the House of Commons on Tuesday, Prime Minister Boris Johnson said the first tranche of sanctions would be against Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank.

The measures would also impose sanctions on three “high net worth” individuals: Gennady Timchenko, Boris Rotenberg and Igor Rotenberg.

Those affected will see their British assets frozen and they will not be allowed to travel to the country, Johnson said. All British individuals and entities will also be barred from interacting with them, he added.

Johnson said the move to sanction Russia came despite he and several other world leaders giving Putin “every chance” to pursue his goals through diplomacy.

“We won’t give up,” Johnson said. “We will continue to look for a diplomatic solution until the last possible moment, but we must face the possibility that none of our messages have been acted upon and that Putin is relentlessly determined to continue subduing and tormenting Ukraine.”

He added: “This is the first tranche, the first barrage of what we are prepared to do and we hold further sanctions ready to be deployed alongside the United States and the European Union if the situation escalates even further.”

His comments come as EU lawmakers prepare to impose sanctions on Russian politicians and banks and limit the Kremlin’s access to the bloc’s capital, financial markets and services. A final decision on the EU sanctions package is expected later on Tuesday.

Meanwhile, Germany on Tuesday halted certification of the highly controversial Nord Stream 2 gas pipeline designed to bring natural gas directly from Russia to Europe.

‘Much, much tougher’ sanctions in reserve

Johnson said Putin had “blatantly violated international law” by formally recognizing Luhansk and Donetsk as independent states. The Russian president on Monday ordered troops into the breakaway areas to “perform peacekeeping duties”.

The directive drew condemnation from around the world, with policymakers admonishing a “blatant” and “unacceptable” violation of international law.

The evolving situation has fueled fears of major conflict in Europe after months of simmering tensions over Russia’s military deployment on Ukraine’s borders.

Ukrainian President Volodymyr Zelenskyy said in a televised address on Tuesday that the country “remains committed to diplomatic means to resolve this issue”.

“This is our choice. We are on our land. We are not afraid of anyone,” he said, according to a transcript from NBC News.

The British Prime Minister said it is “absolutely essential” to keep further sanctions in reserve in the face of the escalating crisis.

“We want to prevent Russian companies from raising funds in sterling or even dollars… We want them to stop raising funds in the UK markets and we want to remove the veil that hides property ownership in this country and indeed throughout the West,” Johnson said.

“The measures we have prepared are much, much more severe and we will absolutely not hesitate to implement them.”

‘Is that it?’

Some lawmakers and strategists said Johnson’s measures didn’t go far enough, suggesting the UK government’s response showed weakness at a time when a more meaningful response was crucial.

“Is that it?” Caroline Lucas, MP for the British Green Party, said via Twitter.

“By punishing 5 banks and 3 oligarchs, she is suggesting that the government cares more about protecting Tory donations and the London laundromat than about imposing meaningful sanctions on Moscow,” she said.

Meanwhile, Tobias Ellwood, the conservative chairman of the Commons Defense Committee, said that while he welcomed the government’s measures, “sanctions alone will not be enough.”

He added: “Indeed, untargeted sanctions could play a role in Putin’s plan to bring Russia ever closer to China.”

Liberal Democrat leader Ed Davey said the government should seize the assets of all Russian oligarchs in the UK, adding that international cultural events such as the UEFA Champions League football tournament final should be prevent them from taking place in Russia.

In response, Johnson said there would be more action from his administration and that it was “unthinkable” that major international sporting events could now take place in Russia.

Timothy Ash, emerging markets strategist at Bluebay Asset Management, described the UK’s response as “embarrassing”.

“I mean, why bother?” said Ash. “The UK has just shown its weakness and [a] weak for the London Laundromat. Even the Germans: EU has finally put skin in the game with NS2 off [the] table, some more serious banks and sanctions on sovereign debt.”