Ukraine: What sanctions are being imposed on Russia?

 

Western nations are planning to impose severe sanctions on Russia, after it launched an invasion of Ukraine.

The measures are designed to cripple Russia's economy and force President Vladimir Putin to halt military action.

What is a sanction?

A sanction is a penalty imposed by one country on another, often in order to stop it acting aggressively or breaking international law.

Sanctions are often designed to hurt a country's economy, or the finances of individual citizens such as leading politicians. They can include travel bans and arms embargoes.

They are among the toughest measures nations can use, short of going to war.

What sanctions are Western nations imposing?

British Prime Minister Boris Johnson said: "We will agree a massive package of economic sanctions designed in time to hobble the Russian economy." He will outline new sanctions at 17:00 GMT.

The EU says it is preparing "massive and targeted sanctions" to block Russia's access to technology and financial markets.

The US, UK, EU and others had already imposed limited sanctions after Russia recognised the independence of two breakaway republics in eastern Ukraine.

The measures targeted Russian banks and individuals, and took steps to cut Russia out of financial markets.

German chancellor Olaf Scholz put on hold permission for the Nord Stream 2 gas pipeline from Russia to Germany to open.

What other sanctions could Russia face?

Western nations are lining up harsher sanctions. Options could include:

Excluding Russia from Swift

One measure would be to exclude Russia from the financial messaging service Swift. Ukraine has called for this to be done immediately.

Swift allows quick transactions and is used by 11,000 financial institutions in 200 countries.

Banning Russia from it would delay the payments Russia gets for exports of oil and gas.

When Swift banned Iran in 2012 - under pressure from the US - Iran lost almost half of its oil export revenues and 30% of foreign trade.

However, a Russian senator warned that if Russia were blocked from Swift, Europe might no longer be sent its oil and gas.

And Russia could focus on other customers and get paid through other systems - for example, China's Cross-Border Interbank Payment System.

The US previously said it is unlikely to use Swift as an immediate sanction and the EU is thought unlikely to do so.

Blocking Russian gas and oil exports

Oil and gas makes up a fifth of Russia's economy and half of its earnings from exports.

As such, refusing to buy its oil and gas would be a very tough sanction.

However, it would also be damaging to western nations that rely on it.

Russia supplies 26% of the EU's crude oil and 38% of its gas. Even a brief cut in gas supply would raise energy prices.

IMAGE SOURCE,TASS VIA GETTY IMAGES

Image caption,

Rossiya Bank is one of five banks sanctioned by Britain

Closing off Russia to the world

The US could ban Russia from transactions involving dollars by introducing penalties for firms allowing it to do so.

The UK has also threatened to stop Russian companies using the pound.

Western nations could also ban exports of hi-tech goods to Russia, such as semiconductor microchips.

This would affect Russia's defence and aerospace sectors and industries like car production.

The US, EU and UK have already blacklisted some Russian banks.

Blacklisting more of them might mean Moscow would face a big fall in its currency, the rouble, and a financial crisis.

The Russian government would have to bail out the banking system, at great expense. However, it has built up reserves of over $630bn (£464bn) to deal with economic shocks.

The UK government could also take further action against Russian money in London financial institutions and banks.

It says it is using "unexplained wealth orders", requiring people to say where their cash has come from.

But only a handful of these orders have ever been used.

The cost of sanctions to the West

Every measure Western nations take against Russia also hit their own economies.

Hitting the Russian banking sector could damage firms which do business in Russia, or have assets in its banks.

An export ban on hi-tech goods would hit many Western manufacturers.

Most importantly, Europe relies on Russia for 40% of its natural gas. Sanctions could make it less able to supply that gas.

Russia could also reduce or shut off supplies in retaliation for the West's sanctions.