Sinead cruise and Andrew MacAskill

LONDON (Reuters] – Five sources claimed that British banks warned the government about a Russian plan to block all Russians from having more than 50,000 pounds (or $65,430) in their bank accounts.

Russia invaded Ukraine and when the Russian government stated that they would ban all Russians from depositing large amounts at UK banks, Prime Minister Boris Johnson claimed it was part a strategy to isolate Moscow.

There are currently more than 70,000 Russian-born nationals living in Britain, government estimates show, and London has long been one of the top destinations for Russian money in Europe, with many elite families settling in the capital.

Reuters was told by sources in the banking industry that they feared British proposals regarding Russian deposits would violate equality laws. These laws prohibit discrimination based on nationality and are the most recent challenge to the imposition of sanctions against Moscow.

According to one bank executive who met with the government about the plan, “What they propose is illegal. There’s no doubt about that.” This feels like an announcement made in a hurry, without any thought about the implications.

The spokesperson for the British government declined to comment.

Britain will implement what its government calls Russia’s most severe sanctions, which include travel bans and asset freezes against hundreds of Russian entities and individuals.

However, some measures such as the blanket ban for wealthy Russian savers are still being considered. These doubts fuel doubts regarding the effectiveness and efficiency of UK attempts to exert pressure on Moscow.

Only the bank deposit plan targets all Russians living in Britain and not only those who are sanctioned directly.

Sources in banking said that they had asked the source for assurances about not being sued if they enforce curbs. These are considered to be the most serious sanctions against Russia since its February 24 invasion.

These reassurances might not be possible without any change to the law. In fact, more than one month has passed since caps were introduced. There have been no announcements on how the caps will function, including how dual nationals would get hit and how multiple deposits from different banks would be handled.

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Although the Russian government is vowing to take action against illicit Russian wealth and corruption, there are increasing concerns that those Russians not sanctioned will also be taken into custody.

A Russian national who worked for London 16 years said that he might consider moving if sanctions were put in place.

He said, under anonymity: “If that happens, then it is clear that we’re not welcome anymore.”

European Union regulators also instructed some banks to inspect transactions of all Russian and Belarusian customers, even EU residents to make sure they don’t use them to bypass Western sanctions.

Russia claimed it initiated a “specially military operation” in Ukraine to disarm the country, but Western countries believe that Moscow wanted to overthrow Kyiv’s government quickly.

A source in the banking community, who requested anonymity, claimed that discussions were continuing, however, government officials hadn’t provided any specifics on how the bans would be implemented.

He expressed concern that the restrictions might cause his bank to be in violation of the Human Rights Act. This could result in lawsuits or the possibility of compensatory payouts.

Although bankers indicated that they would be willing to take on oligarchs supporting Putin’s cause, they want to make sure the government identifies those persons first.

All the sources in the banks that spoke with Reuters indicated that this plan would need significant technological upgrades, new account opening processes, and could be difficult to implement.

While customers must disclose their residence when they open an account, it does not normally include data regarding nationality.

To identify Russian customers, banks will need to request information from all Russian-owned customers with more than 50k pounds.

Source said that “we are willing to work alongside the government to target the oligarchs associated with Putin.” However, we are unsure how efficient this could be in combating these actors and may not want to harm innocent parties.