By Alexander Miller, consultant in international politics, for Eurasia Business News – March 24, 2022

US Treasury building in Washington D.C., United States. Photo credit : Eurasia Business News.

The United States imposed today sanctions on Russian companies associated with the defense industry, 328 members of the Russian State Duma and German Gref, the CEO of Sberbank, the largest bank in Russia. The statement releasing these new sanctions was published on the website of OFAC (the division of the US Treasury responsible for law enforcement in the field of sanctions regimes).

Herman Oskarovich Gref is also included in the SDN list (Specially designated nationals list). He has been an adviser to Vladimir Putin since the 1990s, holding various and increasingly senior positions, including at the St. Petersburg mayor’s office. In addition, from 2000 to 2007, Herman Gref served as Federal Minister of Economic Development and Trade, a position he was appointed by Russian President Vladimir Putin before becoming head of Sberbank. As CEO of Sberbank, Gref oversees not just Russia’s largest multi-billion dollar, multinational financial institution, but also a large number of companies owned by Sberbank in other industries.

Today, Mr Gref was included in the U.S. OFAC sanctions lists for being a leader, official or member of the government of the Russian Federation.

These new sanctions also apply to 17 people who are members of the top management or supervisory board of PJSC Sovcombank.

All property and interests in property of the targeted persons that are in the United States or in the possession or control of U.S. persons are now blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or otherwise exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.  

Read also : How will Russia respond to Western sanctions ?

The U.S. Treasury has also issued new guidance on transactions with the Central Bank of the Russian Federation involving gold, to restrict the Russian Central Bank’s ability to deploy international reserves, including gold, to financially support the Russian economy. According to this guidance, any transaction involving gold related to the Central Bank of the Russian Federation is covered by existing sanctions.

U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions in which blocked persons have an interest. 

Since 2014 Russia has more than doubled the amount of gold in reserves. Also, the Bank of Russia was the largest consumer of gold in the country. Russia was the second largest producer in the world in 2020 and accounted for 9.88 per cent of total global production, with 331.1t of mined gold. Russia’s international monetary reserves rose by $3.6 billion from February 21 to 24, reaching a new all-time high of $643.2 billion. 

At the end of January, the value of monetary gold in Russia’s international reserves was $ 132.26 billion, the share of gold in reserves was 21%.

Read also : How to invest in gold

In the situation of the deep shock of foreign exchange liquidity that the Russian banking system is now experiencing, gold will once again serve to store value and protect wealth against inflation.

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