March 19, 2024

UK sanctions Russia’s biggest bank

The UK has added Russian financial major Sber to its sanctions list in connection with Moscow’s ongoing military operation in Ukraine, blocking the bank’s access to the British pound.

As stated in the document published by Britain’s Treasury on Tuesday, sanctions were imposed against correspondent accounts of Sber, and the bank is also prohibited from clearing operations in sterling.

PJSC Sberbank participates in the acquisition of benefits from the Russian government or supports it,” the document states. It also emphasizes that Sber, being the largest Russian bank in terms of assets, is “an exceptionally significant player in the Russian financial services sector, which is of strategic importance to the Russian government.

MasterCard and Visa to limit Russia operations READ MORE: MasterCard and Visa to limit Russia operations

Sber is Russia’s largest lender and the main financial institution through which salaries of public sector workers are distributed. However, according to Sber, UK sanctions will not affect its Russian clients.

Earlier on Tuesday, international card companies Mastercard and Visa announced they were disconnecting a number of Russian banks from their payment systems following “sanction orders” related to the conflict in Ukraine. Both also noted that the usage of cards by clients within Russia will not be affected, however, some of them won’t be able to use their cards abroad or for payments on foreign websites.

Article source: https://www.rt.com/business/550941-uk-sanctions-sber-bank/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Volvo trucks hauling out of Russia

Swedish truck maker AB Volvo has stopped all production and sales in Russia due to sanctions over Moscow’s military operation in Ukraine, the company announced on Monday.

Spokesman Klaas Eliasson told Swedish state broadcaster SVT that the company does not “have conditions for work in Russia, taking into account the imposed sanctions.” He noted that “there is no boycott of Russia as a nation.”

The measure becomes effective immediately and applies to all deliveries of materials and components to Russia. The decision to stop production in Russia comes after one of AB Volvo’s major component subcontractors, Nordiq, decided last week to stop deliveries to the country.

Major chipmakers halt sales to Russia – media READ MORE: Major chipmakers halt sales to Russia – media

Volvo Group generates roughly 3% of its sales in Russia and has one factory in the country.

On Monday, German carmaker Volkswagen temporarily halted deliveries of cars already in Russia to local dealerships, media reported, citing the company’s statement. The automaker was also forced to suspend production at two of its German factories this week due to a delay in parts deliveries from Ukraine.

Meanwhile, Russian media reports that at least 20 carmakers have raised prices for cars in the country in February – eight of them within the past week, following the decline of the Russian ruble in the face of Ukraine-related sanctions. The price increase affected Citroen, Mazda, Hyundai, Infiniti, Opel, Peugeot, Renault, and Mercedes-Benz. The head of the Avtostat analytical agency, Sergey Tselikov, recently warned that a number of brands would soon disappear from Russia entirely, while “the car market will be reoriented towards China and Korea.”

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Article source: https://www.rt.com/business/550862-volvo-trucks-halt-production-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Germany wants limited Russia SWIFT ban – Foreign Ministry

Germany’s government is not looking to completely cut Russia off from the SWIFT global payment system, the country’s Foreign Ministry announced over the weekend.

According to reports in the German media, Berlin is discussing a “targeted and functional limitation of SWIFT” rather than a complete ban, and ministers are discussing ways to reduce the impact of the measure on Europe.

“We are working to decouple Russia from the SWIFT system in such a way that collateral damage remains as small as possible,” German broadcaster n-tv quoted Federal Minister of Justice Marco Buschmann as saying. The outlet also reports that Economic Affairs Minister Robert Habeck spoke of limiting collateral damage so that the measures “hit the right targets.”

Gas prices in Europe jump 35% amid Russia supply worries READ MORE: Gas prices in Europe jump 35% amid Russia supply worries

The EU has decided to exclude “some Russian banks” from the SWIFT international payments system as part of the sweeping sanctions imposed on the country over its military action in Ukraine. Kiev has been demanding a blanket ban.

Last week, Germany’s Finance Ministry said Russian banks faced a “complete blockade” in the country, with the only exception being payments for energy supplies. Berlin also said last week that it was still unclear what consequences exactly the sanctions against Russia would have on the German and EU economies.

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Article source: https://www.rt.com/business/550849-germany-swift-ban-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian Central Bank takes ruble off life support

The Central Bank of Russia has suspended currency interventions in support of the ruble, the head of the regulator, Elvira Nabiullina, announced on Monday. According to Nabiullina, the regulator is unable to carry them out because of Russia’s assets freeze by US and EU member states.

“Due to restrictions on the use of foreign exchange reserves in dollars and euros, we did not carry out any interventions today. The government has announced a decision to introduce the mandatory sale of 80% of export earnings. This measure will ensure an even supply of foreign currency on the domestic fx market to meet the needs of importers and citizens. At the same time we are taking a number of steps to limit export of capital by non-residents,” said Nabiullina.

The Office of Foreign Assets Control, the US Treasury Department division responsible for sanctions enforcement, has prohibited US residents from engaging in any transactions with the Bank of Russia, the Russian Finance Ministry, and the Sovereign Wealth Fund.

Russian exporters ordered to convert most foreign currency to rubles

“The Russia-related Sovereign Transactions Directive will disrupt Russia’s attempts to prop up its rapidly depreciating currency by restricting global supplies of the ruble and access to reserves that Russia may try to exchange to support the ruble,” reads the statement published on the Treasury’s website on Monday.

To support the currency, Russia’s Ministry of Finance has ordered businesses that trade abroad to sell 80% of their foreign currency earnings and convert them to rubles.

Sanctions over the Ukraine conflict have sent the Russian currency plummeting to historic lows.

The ruble has lost about 30% of its value since the last trading day on Friday. On Monday, the Russian currency plummeted to as low as 109 rubles per dollar and to 122 rubles per euro before recovering some of the losses. The exchange rate for Tuesday, March 1 has been set at 93.5 rubles per dollar and 104.4 rubles per euro. 

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Russian exporters ordered to convert most foreign currency to rubles

Russian businesses that trade abroad must sell 80% of their foreign currency earnings and convert them to rubles, the Ministry of Finance said in a statement on Monday. The decision comes in response to sanctions targeting Russia’s financial system over the crisis in Ukraine. It is expected to stabilize the ruble and encourage more investments in Russia instead of moving foreign currency abroad. 

Today, a decision will be made to introduce a mandatory sale of foreign currency in the amount of 80% of their revenue under all foreign trade agreements starting on February 28, 2022,” the statement said.

Effectively, this means that relevant firms must now exchange a vast share of their forex earnings into Russia’s national currency in order to keep the funds within the country, so that they can be spent on national projects instead of investments abroad. The measure has been jointly put forward by the Ministry of Finance and the Russian Central Bank as one of the ways to ensure Russia’s economic stability in the face of Western sanctions, introduced last week following Moscow’s launch of a military operation in Ukraine.

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Moscow describes the operation as the “demilitarization” and “denazification” of the neighboring state, while a number of Western nations see it as an “unprovoked” aggression. These nations include the US, EU, Great Britain, and a number of others. The allies jointly hit Russia with various economic sanctions targeting the country’s economy. The US and the EU also announced on Saturday they would freeze the assets of the Russian Central Bank. 

Russia has been launching counter-measures of its own. Earlier on Monday, the Central Bank urgently raised the key rate from 9.5 to a record 20% per annum, explaining the move by the “drastic change” in the external conditions for the Russian economy. The Central Bank also announced additional measures to support credit institutions and recommended that banks not charge interest and penalties on loans, as well as allow the restructuring of payments.

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Article source: https://www.rt.com/business/550825-russian-exporters-convert-foreign-currency/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Major chipmakers halt sales to Russia – media

Global chipmakers have begun suspending semiconductor chip sales to Russia in the wake of Western sanctions introduced against Moscow following the launch of a military operation in Ukraine.

Last week, the US announced a package of measures aiming to undermine Russia’s military capability, which include a ban on chip sales to the country. According to Washington, the ban aims to stop Russia from receiving technology for military purposes or dual-use chips that could be used for both civilian and military equipment. This means that sales of most consumer-focused chips may not be targeted.

However, analysts say chipmakers may temporarily halt all chip deliveries while they assess which of their products fall under the new ban. Also, the US Department of Commerce has added 49 Russian companies to its Entity List, and these companies are now ineligible to purchase any type of chips made in the US or using American technology.

“With these export controls, we, together with our allies and partners, are technologically isolating Russia and degrading its military capabilities. Russia’s access to cutting-edge US and partner country technology will halt. Its defense industrial base and military and intelligence services will not be able to acquire most Western-made products,” Thea D. Rozman Kendler, the assistant secretary for export administration at the US Department of Commerce, said in a statement last Thursday.

Moscow may nationalize assets of foreigners – former Russian president

In response to Washington’s announcement, the world’s largest manufacturer of chips, Taiwan-based TSMC, said on Friday it is fully committed to complying with new export control rules, after Taiwan’s government pledged to support international sanctions against Russia.

“TSMC complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced,” the company said in a statement.

Media reports state that TSMC has already suspended all chip sales to Russia and to third parties known to supply products to Russia while it analyses the new exports rules to make sure it fully complies. The largest US processor manufacturers, Intel and AMD, have also halted sales to Russia, RBC reported citing sources in the IT market.

Russian media outlets state that the suspensions of sales have been confirmed by the Russian Electronics Developers and Manufacturers Association (EDMA).

Some industry analysts say Russia could be vulnerable to the export ban because it doesn’t make the high-end chips needed for advanced computing, which are mostly made in Taiwan, South Korea, the United States, Europe, and Japan. The Semiconductor Industry Association (SIA), a trade group representing major brands such as Intel, AMD, IBM, Qualcomm, and Marvell, said it is “fully committed to complying with the new export control rules announced in response to the deeply disturbing events unfolding in Ukraine.”

However, according to data provided by the group, the impact of the chip export ban may not be what the West is expecting. The SIA stated that “Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases.”

Meanwhile, in response to the chip export ban, Belarusian President Aleksander Lukashenko on Sunday offered to buy the necessary parts in Belarus, stating that the situation is “pushing for the closest cooperation.”

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Article source: https://www.rt.com/business/550768-chip-sales-russia-halted/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Germany’s ‘complete blockade’ of Russian banks excludes gas payments

Germany’s finance minister said on Friday that EU sanctions over Russia’s military operation in Ukraine had led to Russian banks being nearly completely blocked in his country. The only transactions still allowed were those by German companies to pay for Russian gas, Christian Lindner said.

“There is already a complete blockade of Russian banks. Thus, business traffic with Russian enterprises is practically blocked. In some cases, transactions are still possible. For example, to pay for gas supplies, so that German companies can make transfers to their subsidiaries in Russia,” Lindner said.

In a video posted on the German Finance Ministry Twitter account on Friday, Lindner added that Germany had secured energy supplies and was prepared for the possible consequences of the EU sanctions against Russia. He admitted, however, that the government is currently unsure what the exact consequences of the sanctions would be, and could result in even higher inflation, he said.

According to Lindner, the EU could impose further sanctions on Russia but the bloc had to make sure they impact the Russian economy specifically. The German government has been reported as saying on Friday that no sanctions against Russia’s energy sector were planned, as such measures could hurt Berlin more than Moscow.

Russian military attack on Ukraine: How we got there READ MORE: Russian military attack on Ukraine: How we got there

The EU introduced sweeping sanctions against Russia earlier this week, targeting the country’s banking sector, as well as technology and airline industries. Europe’s energy sector faces some uncertainty in the wake of the Ukraine crisis as 40% of the bloc’s natural gas supplies come from Russia.

Earlier this week, Berlin suspended the Nord Stream 2 project – a pipeline that was intended to increase Russian gas deliveries to the EU. Germany’s Foreign Affairs Committee said on Thursday that new gas contracts with Russia were inconceivable.

Gas prices in Europe reacted to the developments by climbing as high as $1,500 per thousand cubic meters on Thursday. The German Energy Ministry said on Friday that it had begun to secure alternative sources of coal imports, as half of its coal supplies come from Russia.

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Article source: https://www.rt.com/business/550619-germany-blocks-russian-banks/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Gas price spikes in Europe as Berlin halts Nord Stream 2

European prices for liquefied natural gas (LNG) exceeded $1,000 per 1,000 cubic meters on Wednesday, marking a daily growth of more than 7%, according to Intercontinental Exchange’s London clearing house.

The March futures on the title transfer facility hub in the Netherlands traded at $1,004.7 per 1,000 cubic meters, marking a 7.8% increase from Tuesday, when the gas was trading at $932.3.

There was a major hike in gas prices in the region last spring, when futures were hovering at around $300 per 1,000 cubic meters. The spot price had soared to $600 by the end of the summer, then to $1,000 in October, and hit an all-time high of $2,190 in December.

The dramatic surge was attributed to a wide range of factors, including an increased demand for LNG in Asia, the limited supply from major exporters, and under-filled European storage facilities after last year’s hot summer and harsh winter.

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The situation was exacerbated in late 2021, when the US authorities first alleged that Moscow was likely to launch a military assault on Ukraine and threatened to impose new sanctions on Russia, the EU’s major LNG supplier. Those speculations have been repeated since then by Western media outlets as well as by European officials, sending the prices of commodities, including gas, skyrocketing.
Prices started cooling in December, with gas trading at trading at under $1000 per 1,000 cubic meters on the Dutch futures market, a European benchmark.

The latest surge comes a day after Germany suspended its certification of the Nord Stream 2 pipeline, putting the energy project with Russia on hold indefinitely. The move was among the penalties imposed on Moscow following President Vladimir Putin’s decision to recognize the independent status of the breakaway republics of Donetsk and Lugansk in eastern Ukraine.

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The Gazprom-led project is aimed at boosting Russia’s capacity to deliver LNG direct to Germany, circumventing the land routes that pass through countries such as Ukraine.

On Wednesday, European Commission Executive Vice-President Margrethe Vestager said Germany’s decision to halt the turning-on of the controversial pipeline would not affect EU gas prices.

“There is no gas in the Nord Stream 2 pipeline. What has been stopped is the approval … it needs in order to get into operation, which means stopping the approval process can have no effect on gas prices,” Vestager told a news conference. “We stand fully by the German authorities,” she said.

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Article source: https://www.rt.com/business/550359-gas-price-spikes-europe-nord-stream/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Luxury cars worth over $400mn destroyed in cargo ship fire

A fire last week on a cargo ship in the North Atlantic destroyed over $400-million-worth of luxury and commercial vehicles, according to a risk modeling firm.

The Russell Group said the total dollar value of goods on the ship was $438 million, of which an estimated $401 million comprised cars and goods transporters.

German media outlets have quoted an internal email from Volkswagen US, which stated that the ship had been carrying 3,965 VW, Porsche, Audi, and Lamborghini-badged vehicles. Porsche confirmed that 1,100 of its cars had been on board, and the fire is expected to generate at least $155 million in expected losses for Volkswagen, the Russell Group said.

These figures showed once again the precariousness of global supply chains. The incident comes at a bad time for global carmakers, which are in the middle of a supply chain crisis sourcing semiconductors, resulting in more delays for new cars,” said Suki Basi, the risk modeling firm’s managing director.

Ship carrying thousands of Porsches catches fire at sea READ MORE: Ship carrying thousands of Porsches catches fire at sea

The 650ft-long Felicity Ace caught fire off the coast of Portugal’s Azores Islands last Wednesday as it voyaged from Germany to the US. The Portuguese Navy safely evacuated all 22 crew members.

It has taken a week to extinguish the blaze, with the lithium-ion batteries used in electric cars being blamed for making it difficult to put out. The navy said on Tuesday that there were now no “visible fire outbreaks” on the ship, but “cooling operations” were still underway.

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Article source: https://www.rt.com/business/550363-cars-400m-destroyed-fire/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s wealthiest lose billions due to Ukraine crisis

Russia’s wealthiest have lost $32 billion in 2022 with losses projected to increase as the crisis in neighboring Ukraine continues to escalate, with the US and her Western allies mulling new rounds of anti-Russian sanctions.

According to the Bloomberg Billionaires Index, a list of the world’s 500 richest people, Gennady Timchenko, who owns stakes in energy companies as well as other businesses, headed the list of wealthy Russians who have seen their fortunes decline. The billionaire, who derives the bulk of his wealth from a stake in a major Russian gas producer Novatek, has reportedly lost $6.47 billion since the beginning of the year. His fortune currently stands at around $16 billion.

Another Novatek shareholder, Leonid Mikhelson, saw his net worth decline by $6.2 billion in 2022 to $26.2 billion, while Lukoil Chairman Vagit Alekperov’s fortune dropped around $3.5 billion in the same period to $19.3 billion, as the energy company’s stock slid almost 17%.

Ruble rumbles, Russian market tumbles as Moscow recognizes Donbass READ MORE: Ruble rumbles, Russian market tumbles as Moscow recognizes Donbass

The net worth of the country’s 23 billionaires currently stands at $343 billion, according to the wealth list, down from $375 billion at year-end.

Russian stock markets slumped this week after President Vladimir Putin recognized the independent status of the breakaway republics of Donetsk and Lugansk in eastern Ukraine.

The US announced the first round of fresh anti-Russian sanctions, targeting “Russia’s elite and family members,” and are supposed to “cut off Russia’s government from Western financing” by putting restrictions on investing into its sovereign debt.

At the same time, Germany suspended Nord Stream 2 pipeline certification, puting the energy project with Russia on hold indefinitely, while the UK imposed sanctions on five of the country’s banks and three of its wealthiest individuals, including Timchenko.

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Article source: https://www.rt.com/business/550331-russia-richest-fortune-losses-ukraine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS