By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, August 3, 2022

Under pressure from Brussels and Kiev, Switzerland announced a ban on importing gold from Russia into its territory. This new barrier will reduce the supply of gold on the European market, which should drive up the price of an ounce of gold. Photo: Russian gold bar of 12.279 kg, produced in 2009.

Swiss authorities have imposed a new package of sanctions against Russia, banning gold imports from Russia, the Swiss Federal Council said in a statement. Such a ban had been demanded by Brussels and Kiev for months.

According to the statement, from August 3, a “ban on the purchase, import or transport of gold and gold products from Russia” comes into force.

« All services related to these goods are also prohibited,” the statement said.

Switzerland has also imposed sanctions on Russia’s state-owned Sberbank, freezing its financial assets on Swiss territory.

Four major gold refining plants are located in Switzerland, collectively handling two-thirds of the world’s volume. Switzerland was the last European country to continue importing Russian gold. For the month of June, 3 tons of gold from the Russian Federation were delivered to Switzerland.

New derogations are provided for in order to guarantee the orderly liquidation of transactions or the sale of subsidiaries of Sberbank. On 29 July 2022, the Federal Department of Economic Affairs, Education and Research (EAER) had already added 54 individuals and 9 companies and entities to the Swiss list of persons and entities sanctioned in the context of the war in Ukraine, which thus fully corresponds to that of the EU.

Read also : How to invest in gold

The text of the statement states that “none of the sanctions imposed on Russia are directed against trade in agricultural and food products between third countries and Russia.” The Swiss government added that, like the EU, it has made two exceptions for operations related to these products and the transport of oil to third countries.

This suggests that Russian gold can be used to pay for agricultural, food and oil products from Russia. Moscow has been refusing payments in euros and dollars since the sanctions of Brussels and Washington against its monetary reserves last March. In retaliation, Moscow demanded payment for its exports in Russian ruble or gold.

On 21st July the European Union introduced a new package of restrictive measures against Russia due to the events in Ukraine. The new set of sanctions included, in particular, a ban on “the direct and indirect import, purchase or transfer of gold, which is the most important element of Russian exports after energy resources.”

At the G7 held on June 28 in southern Germany, the leaders of the member states of this informal group had already discussed the possible ban on Russian gold imports.

However, the main buyers of Russian gold are currently in Asia and the Middle East. These new sanctions are unlikely to be more effective than the previous ones, which have already been criticised for their ineffectiveness and the resulting deadlock in negotiations.

This new barrier to access for gold from Russia will reduce the supply of the precious metal on the European and American markets. In a context of high inflation in Europe and the United States since September 2021, gold is nevertheless the subject of strong demand, investors seeking to protect their purchasing power in the face of monthly erosion caused by inflation. Gold prices are expected to react to the rise in the coming weeks.

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© Copyright 2022 – Swann Collins, investor, writer and consultant in international affairs.