The United States said on Sunday that the G7 group of nations would impose sanctions on Russian gold imports aimed at tightening sanctions on Moscow and crippling its war effort in Ukraine.
President Joe Biden said on Twitter: “Together, the G7 will announce that we will impose sanctions on imports of Russian gold, a major export worth billions of dollars to Russia.”
The measure was initially marked as a joint action by Britain with fellow G7 members Canada, Japan and the United States.
However, the remaining G-7 summits in Germany will also join with the formal unveiling of the sanctions on Tuesday, a senior US official said.
“You will see it on Tuesday. It will be a G7 principal that has been clarified,” said the official, who spoke to reporters on condition of anonymity.
With its economy already under heavy pressure from Western sanctions against banks, energy companies, airlines, high-tech and consumer goods, the closure of the gold market will have a significant impact, according to G7 officials.
Given London’s central role in the international gold trade, “the measure would have a global reach, taking the commodity out of formal international markets,” Britain said.
“Gold is Russia’s second largest export after energy and a significant revenue source for (President Vladimir) Putin and Russia,” the US official said. Economy.”
According to the White House, Russia accounted for about five percent of all gold exports in 2020 and 90 percent of Russia’s production went to G7 countries – mostly to Britain.
– slow but steady restrictions –
An attempt to clamp down on Russian gold against Moscow, announced at the three-day meeting of the G7, is likely to be the most meaningful economic measure.
Officials say overall sanctions are slowly but surely beginning to affect Russia’s economy and Putin’s long-term ability to continue the invasion of Ukraine, which is now in its fifth month.
The senior US official said so far there have been few outward signs of the Kremlin feeling the pressure, with the Western campaign closer to a thousand cuts dead than a single dramatic setback.
“The gold scale is a continuing example of the kind of steps the G7 can take collectively to isolate Russia and isolate it from the global economy,” the official said.
“And those effects only accumulate over time, as Russia’s ability to produce, Russia’s ability to wage war, is eroding over time as a result of the collective steps taken by the G7.”
Gold is also a refuge commodity in times of turmoil, valued at 12.6 billion pounds ($15.5 billion) for the Russian economy in 2021. Russian oligarchs are believed to have raced to hide their wealth from Western sanctions enforcers by converting them into the precious metal.
The London bullion market had already suspended six Russian refineries in an action announced on 7 March.
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