By Alexander Miller, consultant in emerging market – Eurasia Business News, March 11, 2022
The United States will ban the imports of Russian vodka, non-industrial diamonds and seafood and exports of luxury goods to Russia, announced President Joe Biden today. The executive order was detailed in a press release.
The US ban on the imports of these goods should deprive Russia of more than $ 1 billion in revenues, according to a press release of the White House. At the same time, Washington does not exclude the introduction of other restrictions on supplies from Russia.
The executive order of US President will prohibit the export in the interests of any citizens of Russia of luxury cars, expensive watches, clothes and alcohol, as well as jewelry.
Joe Biden also pledged that the G7 countries will take measures to abolish Russia’s most-favored-nation status in trade in order to deprive it of the privileges that WTO membership gives. At least, US president intends to solve such a task together with Congress in terms of bilateral trade, the corresponding bill has already been adopted by congressmen and Biden intends to sign it. The United States expects that the rest of the G7 countries will follow its example, so that Russia will lose benefits in trade with countries that account for more than half of global GDP.
G7 Leaders from the US, Canada, France, Germany, Italy, Japan, and the United Kingdom as well as the European Union announced today new economic actions to hold Russian government accountable for his continued military operation in Ukraine and to further isolate Russia from the global financial system. Each partner will implement actions consistent with their national processes.
The fact that the European Union is considering the possibility of abolishing the most favored nation treatment for Russia in the WTO system was first revealed on March 3.
The United States will also prevent Russia from receiving loans from the World Bank and the International Monetary Fund.
The Executive Order taken on March 11 by US President Joe Biden also ban exports and supplies of U.S. dollar-denominated banknotes to the Government of the Russian Federation or any person located in the Russian Federation. That means that Washington decided to ban the use of dollars by the Russian state. It’s a further step towards total financial isolation of Russia after the freeze of the monetary assets of the Russian central bank last week. Such a decision can seriously hit the Russian economy but can also increase the use of physical gold by central banks as the only guarantee of national currencies. This move may strenghten the role of Chinese yuan in the Asian trade.
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In addition, new names of billionaires from Russia and their family members would be added to the US sanctions lists in coming days. Blocking sanctions are being imposed against Yuri Kovalchuk and top managers of Russian banks that have already fallen under US sanctions, as well as against Russian State Duma deputies who supported the recognition of the separatist republics DPR and LPR. The Russian elite will be banned from entering the United States, their assets will be blocked, and they will also face prosecution for illegally acquired property.
The U.S. Treasury has been tasked with monitoring attempts to circumvent sanctions.
Americans may be prohibited from investing in all sectors of the Russian economy. Joe Biden’s decree says that US residents can be “prohibited from new investments in any sector of the economy of the Russian Federation” depending on the decision of the Ministry of Finance. When deciding on the prohibition of such investments, the Ministry of Finance will consult with the US Secretary of State.
Update to come.
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