By Karin Strohecker

(Reuters] – Following Russia’s invasion in Ukraine on Thursday, Canada, Britain and the United States announced that they would be imposing new sanctions on Russia. They will also block certain banks’ access to SWIFT.

These are some details about the proposed measures:

SWITCHING FROM SWIFT

Washington and its allies began to use what is widely considered to be one of the most severe sanctions measures: the ban on SWIFT banks by Washington – this will prevent lenders from transacting large amounts of financial transactions around the world and effectively reduce Russian imports and exports, the statement states.

In a joint statement, nations stated that the next step would include restrictions on central bank international reserves.

Although it was unclear which Russian banks would be removed SWIFT, Ursula von der Leyen (president of the European Commission) stated that the move would make sure those chosen were “disconnected” from international financial systems in a manner that “harms their ability to function globally.”

SWIFT can be used in more than 11,000 financial institutions across over 200 countries.

BANKS & FINANCIAL FIRMS

Britain and the United States announced new restrictions, which, when combined with existing sanctions, will effectively kick most Russian bank assets out of these countries. Two of Russia’s largest lenders, VTB Bank and Sberbank were the new targets.

U.S. banks have to end all correspondent banking relationships – this allows banks to pay one another and transfer money across the globe. This is done with Russia’s biggest lender, Sberbank. It takes just 30 days.

Washington officials also used their most powerful sanctioning instrument, including adding VTB and Otkritie to the Specially Designated Nationals list (SDN). This effectively kicks them out the U.S. financial systems, bans trade with Americans, and freezes their U.S. assets.

EU leaders agreed to sanctions against 70% of Russia’s banking sector and key state-owned businesses, as well as their defense.

Russia’s banks, which are large and well-integrated into the international financial system, will face severe sanctions. According to data from the Bank for International Settlements, the largest share of Russia’s exposure by foreign banks is held by European lenders.

The total Russian bank foreign assets and liabilities were $200.6 billion and $134.5 trillion, according to the central bank of Russia. According to U.S. dollar share, it was around 53%, rather than 76%-81% 20 years ago.

SOVEREIGN DEBT & CAPITAL MARKETS

Britain declared it will ban Russian sovereign debt sales to London. Russia issued sovereign debt worth 4.1 Billion pounds in London between the beginning 2020 and now.

EU will soon implement a series of measures to “target Russia’s state and government’s access to EU financial and capital markets, and services in order to curb the funding of escalatory or aggressive policies.” The EU will be prohibited from investing in Russian bonds.

Washington announced on Tuesday that it would place new restrictions on Russian sovereign debt deals. Americans, already prohibited from directly investing in Russian sovereign bonds, will no longer be allowed to purchase it on the secondary market.

Before the recent events, Russian bonds were becoming increasingly difficult to access.

In 2015, U.S. sanctions made Russian dollars uninhabitable for key indexes and investors. American investors were prohibited from buying Russian rouble bond new Russian bonds by President Joe Biden in April 2021 due to accusations of Russian election meddling.

Since 2014, Russia’s debt has fallen by 33%. It was $733 billion at the beginning and $489 billion during the third quarter.

INDIVIDUALS

Britain, the EU, and the U.S. have all imposed travel bans, asset freezes and other restrictions on Russian citizens.

Britain announced sanctions against over 100 Russian people and entities. This included an asset freeze, travel ban and asset freeze for Yelena Georgieva chair of Novikombank, Pyotr Fradkov chairman of Promsvyazbank, Denis Bortnikov vice president of VTB, Kirill Shamalov former son-inlaw of President Vladimir Putin, and Yury Slousar of United Aircraft.

Britain will also adopt legislation that limits the amount of deposits Russian citizens can make in UK bank accounts. At British banks, the limit is 50,000 Pounds ($66,860).

Washington sanctioned Fradkov, Bortnikov, and Vladimir Kiriyenko on Tuesday.

Washington attacked other Putin associates on Thursday. These included Sergei Ivanov (CEO of Russian state-owned diamond miner Alrosa); Andrey Patrushev (MCX:), who served as a leader at Russian state-owned Gazprom (MCX;); and Ivan Sechin (reportedly, deputy head of Rosneft’s energy department).

Biden indicated that he was considering personal sanctions against Putin on Thursday. Moscow claimed the move would not hurt Putin but be “politically damaging”.

Five people were already sanctioned by the EU for their involvement in Russian parliamentary elections in Crimea annexed last September. The EU also announced that it will blacklist any lawmakers who vote to recognize two areas controlled in part by pro-Russian separatists from eastern Ukraine and freeze all assets. It will ban them and others from traveling to the EU.

ENERGY CORPORATES & NORD STREAM 2

Already, the US and EU have placed sanctions on Russia’s defense and energy sectors. Gazprom is the state-owned company for gazprom. Gazpromneft, which owns Gazprom and its oil arms Gazpromneft, and Lukoil and Rosneft are all subject to various curbs on imports/exports, and deb-raising.

There are several options for enforcing sanctions, including the possibility of preventing companies from setting up in dollars.

Nord Stream 2, a pipeline that links Russia and Germany was recently approved by the EU before Berlin placed its certification on ice.

American sanctions were imposed on Wednesday against the company responsible for building Russia’s Nord Stream 2 natural gas pipeline.

CURBINGTECHNOLOGY

EU pledges to implement measures that will impede Russia’s technological advancement in key areas such as high-tech software and components.

The U.S. Commerce Department said on Thursday it was implementing export controls that will severely restrict Russia’s access to semiconductors, computers, telecommunications, information security equipment, lasers, and sensors that it needs to sustain its military capabilities.

Similar policies were used during the Cold War when the Soviet Union was technologically behind and economic growth was impeded by sanctions.