Liz Truss reveals new sanctions aimed at hitting all Russian banks to ‘cut off’ Putin from global economy

Foreign secretary wants ‘complete degradation’ of Russian economy

Adam Forrest
Monday 28 February 2022 16:28 GMT
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Liz Truss reveals new sanctions aimed at hitting Russian banks

Foreign secretary Liz Truss has revealed plans to extend UK sanctions aimed at hitting banks in Russia, as she vowed to “cut off” Vladimir Putin’s government from the global economy.

Ms Truss said new emergency legislation would allow full asset freeze on “all Russian banks” withing days, saying she wanted to see the “complete degradation” of the Russian economy after the invasion of Ukraine.

The foreign secretary said she was bringing forward legislation to prevent Russian banks clearing payments in Sterling, which would be applied to Sberbank, the country’s largest bank.

She also said full asset freezes would be imposed on the VEB, Sovcombank and Otkritiye banks – adding: “We will bring in a full asset freeze on all Russian banks in days, looking to coordinate with our allies.”

Ms Truss also vowed to keep working through a “hit list” of oligarchs in the UK – saying she would “focus on their houses, their yachts and every aspect of their lives”.

She added: “This is all about flushing out the oligarch dirty money from the UK. We will continue work with our G7 allies to cut off the Russian economy, and cut the free world’s dependence on Russian gas, depriving Putin of his key source of revenue.”

The first piece of legislation will be used to isolate Russian companies from access to UK capital markets, as well as preventing the Russian state from raising debt in Britain.

Ms Truss said a second piece of legislation will be brought forward to ban exports to Russia in critical sectors. This includes “high-end technological equipment” – including marine and navigation equipment – which “will blunt Russia’s military industrial capabilities”.

The minister admitted the export bank would hit British companies, and said sanctions would mean the British people “will have to go undergo some economic hardships”. The foreign secretary added: “Those hardships are nothing compared to the people of Ukraine.”

Ms Truss said on Sunday that new names added to the “hit list” of those hit by personal sanctions every few weeks, as she seeks to ratchet up the pressure on Putin’s closest allies.

“We’ve already had letters to the Foreign Office, from lawyers, threatening us, so we have to make sure the cases are properly prepared and that we have the right evidence before we sanction these individuals,” she told the Sunday Times.

Ms Truss told the Commons that the government would “target the families of oligarchs, the people that work for them, the people who support them and the people who enable them” – hinting at moves to limit the influence of law and PR firms in London.

The foreign secretary also said Russian state-owned oil tankers “won’t be going about their business freely” at UK port for much longer, as transport secretary Grant Shapps said UK ports should refuse access to Russian boats.

Ms Truss also said Britain is looking at secondary sanctions to target others countries who seek to profit from gaps left in trade resulting from measure imposed on Russia by boosting business with Moscow.

Boris Johnson’s government is also fast-tracking plans to tackle “dirty money” and expose foreign oligarchs who launder their wealth through the UK’s property market in the wake of Russia’s invasion of Ukraine.

The map shows the extent of Russia’s invasion of Ukraine
The map shows the extent of Russia’s invasion of Ukraine (Press Association Images)

Ministers will table the Economic Crime Bill, previously expected later in the session, in parliament on Tuesday.

The legislation will establish a new register of overseas entities requiring foreign owners of property in the UK to declare their true identity, in a move intended to ensure criminals cannot hide behind secretive webs of shell companies.

Those that fail to comply will have restrictions placed on selling the property, while those who are found to have broken the rules will face up to five years in prison.

Business secretary Kwasi Kwarteng said that in light of Russia’s “outrageous actions”, it is necessary to “send a clear message that the UK will not tolerate their corruption here”.

Mr Kwarteng confirmed the bill will be introduced on Tuesday – but told MPs it was not being “fast-tracked” as emergency legislation.

The white paper will contain measures intended to prevent company agents from overseas creating firms in the UK on behalf of foreign criminals or secretive oligarchs, as well as reforms of the use of limited partnerships and more powers to seize cryptocurrency assets.

The bill will also strengthen and expand the system of unexplained wealth orders (UWO), which enable law enforcement agencies to seize assets without having to prove they were obtained through criminal activity.

Mr Johnson also said the West is “tightening the economic ligature” around Russia, with Britain, the US, Canada and the EU together announcing selected Russian banks would be excluded from the Swift global payments system.

They said they would be imposing “restrictive measures” to prevent the Russian Central Bank from deploying its international reserves “in ways that undermine the impact of our sanctions”.

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