Ukraine-Russia war: How do sanctions work?

UK’s full list of economic measures announced in bid to isolate ‘bloodstained aggressor’ Putin

Sam Hancock
Wednesday 02 March 2022 10:30
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Boris Johnson announces 'largest and most severe' sanctions against Russia

Boris Johnson announced on Thursday that his government will impose “the largest and most severe package of economic sanctions that Russia has ever seen”, in response to Vladimir Putin’s long-awaited invasion of Ukraine.

It comes after the prime minister took to the despatch box on Tuesday to declare that the assets of five Russian banks were being frozen, along with three Russian billionaires – who will also be hit with UK travel bans.

While the move clearly indicated Britain’s stand against Moscow, opposition MPs – including Labour leader Keir Starmer – argued the measures did not nearly go far enough. Various Tories said the same, but Mr Johnson insisted the UK was “out in front” globally when it came to actions against President Putin.

Since then, a host of western allies, including Germany and the US, have imposed their own sanctions on Russia – including German chancellor Olaf Scholz abandoning the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to his country.

Following President Putin’s decision to launch a full-scale attack on Ukraine, Mr Johnson confirmed Britain would go further.

As part of the updated measures, the prime minister told MPs in the Commons that all major Russian banks will have their assets frozen and be excluded from the UK financial system. Similar financial sanctions will be extended to Belarus for its role in the assault on Ukraine, Mr Johnson added.

But what exactly does this all mean? Here is everything you need to know.

What are sanctions and how do they work?

In their simplest terms, sanctions are measures imposed on a state, group or individual as punishment for certain actions.

The three most commonly used sanctions fit into three categories: economic, diplomatic and military.

  • Economic sanctions are commercial and financial penalties such as levying import duties on goods, restricting exports, blocking ports, investment bans and targeting companies from a state
  • Diplomatic sanctions are political measures that aim to demonstrate displeasure with or disapproval of certain actions, stopping short of taking economic or military steps, such as reducing or removing diplomatic ties by – for example – closing a state’s embassy or cancelling high-level meetings
  • Military sanctions – called on only in extraordinary circumstances – range from arms embargoes to full-scale military attacks

When has Britain used sanctions before?

In 2021, the Foreign, Commonwealth and Development Office (FCDO) announced a raft of measures – for the first time and in tandem with the EU, US and Canada – against four Chinese government officials and a Xinjiang security body. It came as a result of human rights violations take place against Uyghurs and other minorities in Xinjiang.

They had their UK assets frozen and were banned from entering the country.

The year before, Britain imposed sanctions on 49 people and organisations behind notorious human rights abuses, including Saudi Arabian officials involved in the 2018 murder of journalist Jamal Khashoggi. They too had assets frozen and were handed travel bans.

An historic occasion where the UK imposed sanctions on another state was against apartheid South Africa in the 1980s, which Margaret Thatcher initially resisted due to trade links. Those sanctions included a ban on tourism and new investments.

You can find a full list of all the individuals, groups and states the UK currently has sanctions against on the gov.uk website.

What sanctions will the UK impose on Russia?

The prime minister has now outlined his government’s full list of economic sanctions – and said the war prompted by Russia could, ultimately, lead to British military support becoming necessary.

He also said that, in full concert with the US and EU, the UK will introduce “new trade restrictions and stringent export controls” in a bid to isolate and cut off the “bloodstained aggressor” President Putin.

The sanctions laid out by Mr Johnson this afternoon include:

  • All major Russian banks will have their assets frozen and will be excluded from the UK financial system, stopping them from being able to access sterling and clearing payments through the UK. (This includes a full and immediate freeze of VTB bank)
  • Legislation will stop major Russian companies and the state from raising finance or borrowing money on UK markets
  • Asset freezes will be put on more than 100 new individuals and entities
  • The Aeroflot airline will be banned from landing in the UK
  • There will be a suspension of dual-use export licences to cover items which can be used for military purposes
  • Within days, the UK will stop exports of hi-tech items and oil refinery equipment
  • There will be a limit on deposits Russians can make to UK bank accounts
  • Financial sanctions will be extended to Belarus for its role in the assault on Ukraine
  • The UK will bring forward parts of the economic crime bill before the Easter recess

He added legislation to implement these sanctions will be laid out in parliament “early next week”.

These measures are a follow-up to the ones announced earlier this week, which saw three oligarchs known to be close allies of President Putin targeted, as well as five Russian banks.

This PA graphic details Russia’s advancement on Ukraine

Those individuals are Gennady Timchenko, Boris Rotenberg, and Igor Rotenberg, while the banks are Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Ban.

Measures against both the men and Russian banks include UK asset freezes, a travel ban and prohibition on British individuals and businesses dealing with them.

The FCDO later explained that these banks had bankrolled the Russian occupation of Crimea from 2014. It added that sanctions would also be tabled against members of the Russian Duma and Federation Council who voted to recognise the “independence” of eastern Ukraine’s rebel-held Donetsk and Luhansk regions.

The government’s full list of sanctions against Russia can be seen here.

Following his announcement in the Commons, Mr Johnson said the UK “will bring our allies together to protect Nato, to show that President Putin will get a tougher Western alliance as a result of his actions”. He added the events “will show that the Russian president has profoundly miscalculated”.

Concluding his reply to the prime minister’s update on Ukraine, Sir Keir said: “We know how Putin operates, so we know how to defeat him. He seeks division so we must stand united. He hopes for inaction, so we must take a stand. He believes that we are too corrupted to do the right thing, so we must prove him wrong.”

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