During the G7 summit in Hiroshima, Japan, the group of seven advanced economies is expected to announce a fresh set of sanctions against Russia, aimed at impeding its military efforts in Ukraine. Ukrainian President Volodymyr Zelenskyy’s attendance at the summit will help to underline the need for better enforcement of existing measures against Moscow’s war activities. Russia currently bears the title of the most-sanctioned country in the world, but doubts remain over their effectiveness. The EU Council President has said that the aim is to eliminate loopholes and ensure that the sanctions are sufficiently painful for Russia, rather than for the countries imposing them. The impact of the sanctions on Russia’s economy and military activities, as well as the existing measures, will be considered.
The European Union is currently developing a plan to restrict trade in Russian diamonds and prevent Russia from circumventing the restrictions, as part of efforts to tighten sanctions. The new sanctions aim to impose “severe costs” on countries that evade or undermine them. The G7 leaders pledged to intensify the enforcement of sanctions through their sanctions watchdog Enforcement Coordination Mechanism, which aimed to improve information sharing and enforcement, during an online summit held in February. Russia currently exports around $4bn worth of rough diamonds annually – almost a third of the world’s total – and the bulk are cut and polished in India. The EU plans to close loopholes and cut Russia off from critical supplies.
At their summit in Hiroshima, Japan, the G7 advanced economies are expected to announce a new set of sanctions against Russia aimed at further hindering its military offensive in Ukraine. EU Council President Charles Michel stated that the EU was focused on closing loopholes and cutting Russia off from critical supplies. As part of this effort, the EU is working on a plan to restrict trade in Russian diamonds to prevent Russia from circumventing the measures. The new sanctions follow an online summit in February where G7 leaders pledged to intensify enforcement through the Enforcement Coordination Mechanism to improve information sharing and enforcement. There are also reports that some Chinese companies that are believed to be supplying military components to Russia may be sanctioned.
The UK has announced new sanctions targeting Russian seizures of Ukrainian grain, advanced military technology and Moscow’s remaining revenue sources. It has also frozen assets of 86 individuals and entities, including companies connected to Rosatom that support Putin’s war effort. Russian sovereign assets will remain frozen until Russia agrees to pay for the damage it has caused in Ukraine. The US sanctions also include targeting members of Putin’s inner circle and their families, banks considered crucial to the Kremlin and Russia’s military, and limiting Russia’s ability to raise funds abroad. The Specially Designated Nationals and Blocked Persons List, managed by the Treasury Department’s Office of Foreign Assets Control, has expanded to include individuals and companies around the world allegedly involved in supporting Russia’s military. The US also works with the Russian Elites, Proxies, and Oligarchs Task Force, a multi-agency group that collaborates with other countries to investigate and prosecute oligarchs and individuals allied with Putin.
The US Department of State recently announced more than 200 new sanctions against Russia that target its energy, military, metals and mining, and technology sectors, as well as entities, individuals, vessels, and aircraft that were involved in unlawful deportation of Ukrainian children and seizures of Ukrainian grain. The EU has imposed ten rounds of sanctions on Russia since President Putin ordered the invasion of Ukraine in February, while Canada has sanctioned dozens of Russians and Russian companies. Despite the sanctions, evasion of the sanctions is increasing, with high-tech exports to third countries making their way to Russia. While the impact on Russian banks, individuals, and technology imports has been significant, the economic life of ordinary Russians remains largely unchanged. Russia’s exports to China, India, and Turkey have surged, but sanctions on fossil fuels have had some impact, while Russian imports of computer chips and other high-tech items have continued through transit points like Hong Kong and Taiwan.