Thursday, June 20, 2024
HomeTraditional FinanceCommoditiesUK Bans Russian Imports, Imposes Sanctions on Companies

UK Bans Russian Imports, Imposes Sanctions on Companies

Britain unveiled its strategy to prohibit the importation of Russian diamonds, copper, aluminium, and nickel. Furthermore, the country announced a fresh set of sanctions against Russia, specifically targeting companies implicated in the alleged theft of Ukrainian grain.

In line with this development, the United States and Canada also declared additional penalties against Russia due to its ongoing conflict with Ukraine. Washington imposed sanctions on Polyus, a gold producer, as well as the Russian division of Polymetal, one of its industry counterparts. These measures will further impede Russian gold sales, which have already suffered from existing Western sanctions and restrictions.

However, the impact of the UK import ban is expected to be limited, as Russian exports of these commodities to the UK had already diminished following the implementation of tariffs.

British Prime Minister Rishi Sunak affirmed, “Later this year, we will enact legislation to ban the importation of Russian diamonds and cease all imports of copper, aluminium, and nickel originating from Russia.”

Last March, the British government imposed an additional 35% tariff on Russian base metals. In addition, the London Metal Exchange (LME) suspended the delivery of Russian copper, aluminium, nickel, and lead to its approved warehouses in the UK, despite the absence of such stored materials.

Regarding these developments, the LME stated, “The LME will diligently monitor the latest situation for further details and will communicate any necessary actions to the market as needed, in addition to the current suspension.”

Russia is a significant producer of aluminium, nickel, and diamonds. The UK’s import ban plans were announced prior to the G7 nations’ discussions on establishing mechanisms to trace Russia’s diamond trade, with the intention of imposing restrictions at a later stage.

When asked about potential future diamond restrictions within the European Union, Kremlin spokesman Dmitry Peskov remarked, “The global market is dynamic and offers various alternative destinations.”

The recent penalties imposed by the United States on the operations of its two major gold mining companies add to the existing sanctions on prominent Russian banks, which were previously the primary gold exporters from Russia. Additionally, in June, Britain, the United States, Japan, and Canada implemented a ban on new imports of Russian gold.

This ban was enforced at a time when Russian exports to Western countries had already ceased, as industry insiders claim that the Russian gold trade had shifted its focus to Asia, where most countries have not imposed sanctions on Russia.

The U.S. sanctions exclusively target the Russia-based division of Polymetal, namely Polimetall AO, and do not extend to its parent company, Polymetal International PLC, which is headquartered in Jersey and possesses assets in Kazakhstan.

In addition to the import bans, Britain also focused on “questionable individuals and entities” linked to the theft and illegal reselling of Ukrainian grain, an accusation that Russia denies. It is uncommon for entities engaged in grain trading to be targeted, as this sector typically falls under humanitarian exemptions. Both Russia and Ukraine are significant exporters of grain to Africa and the Middle East.

The UK Foreign, Commonwealth, and Development Office stated, “This grain, as well as other agricultural goods, is reported to have been stolen from warehouses and fields in the temporarily occupied territories in Ukraine.”

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