What are the sanctions on Russia and are they hurting its economy?

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Saint Basil's Cathedral in MoscowImage source, Getty Images

The UK government is stepping up sanctions on Russia, by banning diamond imports.

It also said more than 60% of President Putin's war chest - about £275bn - has been "immobilised" .

What are sanctions?

Sanctions are penalties imposed by one country on another, to stop them acting aggressively or breaking international law.

They are among the toughest actions nations can take, short of going to war, and can be imposed at very short notice.

What are the diamond sanctions?

The UK is banning the import of diamonds from Russia. The US set out similar plans to ban Russian diamonds last year and the EU has announced plans to do so.

Image source, Getty Images
Image caption,
Russia earned £4bn a year from diamond exports

However, most Russian diamonds are sent to countries like India to be polished, says Hans Merket of the International Peace Information Service think tank. Once they are re-exported, it is hard to tell that they originated in Russia.

As a result, "US sanctions have not been particularly effective", Mr Merket says. A solution could be "through laser inscriptions in diamonds, or through 3D scans", he says.

Gold exports, worth £12.6bn ($15.4bn) to Russia in 2021, were also banned by countries including the UK and US last year.

What other sanctions have been placed on Russia?

Financial measures

Western nations are trying to limit Russia's access to money.

The European Union (EU), US, UK and Canada have frozen assets of Russia's central bank in their countries.

Major Russian banks have been removed from the international financial messaging system Swift, delaying payments for Russian oil and gas.

The UK has frozen the assets of other Russian banks, and has banned Russian firms from borrowing money.

The EU has placed limits on the amount Russians can deposit at banks.

The UK government announced plans for a similar measure in February last year, but in May 2023 it said it would not implement it.

The UK government has said the financial sanctions imposed by Western nations have cut off $350bn (£275bn) of Russia's $604bn foreign currency reserves.

Oil and gas

Western nations have tried to cut Russia's income from oil and gas. Measures include:

In December 2022, the EU and G7 set a maximum price of $60 a barrel for Russian crude oil.

They warned importers that insurers will not underwrite oil shipments if they pay more.

The EU has not imposed sanctions on Russian gas because it relies on it for about 40% of its gas needs.

Targeting individuals

More than 1,000 Russian businesses and individuals have been targeted by the US, EU, UK and other countries.

They include oligarchs - wealthy business leaders who are thought to be close to the Kremlin - such as former Chelsea FC owner Roman Abramovich.

Image source, Reuters
Image caption,
Roman Abramovich is the former owner of Chelsea FC

Assets belonging to President Putin and Foreign Minister Sergei Lavrov have been frozen.

At least 16 superyachts linked to sanctioned Russians have been seized.

In New York, Russian aluminium magnate Oleg Deripaska has been charged with violating US sanctions.

The UK has stopped the sale of "golden visas", which allowed wealthy Russians to get British residency rights.

Russian shoppers and businesses hit

More than 1,000 international companies, including McDonald's, PepsiCo, H&M and Adidas, have stopped working in Russia,

Other measures include:

  • A ban on the export of dual-use goods - items with both a civilian and military purpose, such as vehicle parts - by the UK, EU and US
  • A ban on all Russian flights from US, UK, EU and Canadian airspace
  • A ban on the export of luxury goods to Russia

Are sanctions hurting Russia?

Western leaders predicted Russia's economy would collapse. After the invasion of Ukraine and first sanctions, prices rose sharply and people took their money out of banks.

This is because Russia is exporting 8.3 million barrels of oil a day - the highest level since April 2020, according to the International Energy Agency (IEA). The biggest importers are India and China.

However, the IEA says that Russia's earnings from oil and gas exports fell to £6.5bn ($8.1bn) a month in April 2023, from £18.2bn ($22.5bn) because of Western sanctions.

How has Russia reacted?

Russia has banned exports of more than 200 goods from the West, including telecoms, medical, vehicle, agricultural, electrical equipment and timber products.

It is blocking interest payments to foreign holders of government bonds, and banning Russian firms from paying overseas shareholders.

Foreign investors, who hold billions of dollars worth of Russian investments, are banned from selling them.

Correction 25 May 2023: A previous version of this piece incorrectly stated that the UK government had introduced a measure to limit the amount that Russians could keep in UK banks. The government announced on 24 February 2022 that it was doing this but subsequently decided not to.