By Alexander Miller, consultant in international politics, for Eurasia Business News – June 25, 2022, updated on June 26.

U.S. President Joe Biden and G7 leaders have discussed today the ban on import of Russian. Once agreed, the ban could be announced by the U.S. Treasury on June 28. This restrictive measure is a new attempt to further isolate Russian from the Western economies.

The G7 includes Canada, France, France, Japan and the United States.

Formally, Russian gold is already under restrictions. After the start of the war in Ukraine, about $ 300 billion of gold and monetary assets of the Bank of Russia were frozen by the United States and the European Union.

The G7 summit takes place from 26 to 28 June at Ellmau Castle in the Bavarian Alps. Sweden, Finland and Ukraine were invited to the summit for the first time.

The attempt of isolating the Russian economy has not brought strong results, as China and India took the place of Western countries in the trade with Russia. Other countries in Middle East, Eastern Asia and Africa have also strenghtened their economic partnership with Russia. Even if the West adopts an import ban, Moscow will continue to sell Russian gold to banks and financial institutions of theses countries. Russia and China have been working on an alternative monetary system since at least 2014, based on the ruble, the yuan and gold.

The decision to ban the purchase of Russian gold was first announced by London, however, specifying that the restrictions, which will soon come into force, will affect newly mined and processed gold and will not affect what has already been acquired. “New exports of Russian gold will no longer be allowed to the UK, Canada, the United States and Japan thanks to the new tough measures that will be announced at the G7 summit,” said Downing Street, pointing out that the British Prime Minister Boris Johnson will call on colleagues in the G7 to support these measures.

Given London’s central role in international gold trading and the parallel actions of the United States, Japan and Canada, this measure can have a significant scope, excluding this commodity from regulated international markets.

Read also : How to invest in gold

Russia launched a military operation in the morning of February 24, with the official goal to “demilitarize Ukraine”, remove the Ukrainian government and protect the rights of Russians living in Donbass, Eastern Ukraine, a region hit by the war since 2014. In a televised address to Russian citizens, President Vladimir Putin stated that circumstances “require decisive and immediate action from us, the people’s republics of Donbass  have asked for help.” 

Read also : How will Russia respond to Western sanctions ?

The Kremlin continues voicing that Moscow’s plans do not include the occupation of Ukrainian territories. The Russian goals would be “demilitarization and denazification” of the country. Moscow also wants Ukraine to return to its neutral status, which was enshrined in the Ukrainian Constitution until 2014 and to offer guarantee of not holding on its territory nuclear weapons.

Ukraine and its Western partners sees the Russian military operation as an invasion and imposed strong strong sanctions against Russian state officials, banks, companies and oligarchs, to put pressure on the Russian government and lead it to a ceasefire and a withdrawal from Ukraine.

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