War in Ukraine: the G7 wants to ban Russian gold to increase pressure on Moscow
A smelter pours gold to make a 92.96 percent pure ingot at a gold mining procession plant in Olimpiada, eastern Siberia, Russia, June 30, 2015. © Ilya Naymushin/REUTERS
Text by: RFI Follow
2 mins
The G7 major powers, seeking to step up pressure on Moscow after a four-month invasion of Ukraine, announced on Sunday, on the first day of their summit, their intention to ban imports of Russian gold, cut off from the crucial London market.
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The leaders of France, the United States, the United Kingdom, Germany, Italy, Canada and Japan meet for three days in a castle in Bavaria, in the south of Germany, when some fear a form of fatigue in support for kyiv.
“
Together, the G7 will announce that we will ban Russian gold, a major export source, which will deprive Russia of billions of dollars
,” tweeted US President Joe Biden.
The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine.
Together, the G7 will announce that we will ban the import of Russian gold, a major export that rakes in tens of billions of dollars for Russia.
— President Biden (@POTUS) June 26, 2022
Pending a collective announcement after the meeting on Tuesday, Washington, London, Ottawa and Tokyo have already announced an embargo on newly mined gold in Russia, without targeting that already sold.
"
These measures will directly hit the Russian oligarchs and attack the heart of Putin's war machine
," British Prime Minister Boris Johnson said in a statement.
“
Putin is wasting his dwindling resources on this useless and barbaric war.
He feeds his ego at the expense of the Ukrainian and Russian people
,” he added, calling on his allies to “
starve
” Russian power.
Second exported product after energy
Russia is a major gold-producing country whose exports represented nearly 15 billion euros in 2021, or 5% of the world market according to London and Washington.
The precious metal is the second product exported by Russia
after energy
, already in the sights, while Westerners are already banning Russian oil and seeking, for Europeans, to reduce their dependence on Russian gas.
The goal is to isolate Russia from the international financial system and avoid financing the Russian war effort by paying Moscow billions in imported resources.
The gold embargo "
constitutes an additional means of blocking the links between the Russian economy and the financial system
", explained to a senior American official.
The effect of the sanctions "
is only compounding over time and Russia's ability to wage war will be reduced due to the collective measures the G7 is taking
", he added.
90% of Russian gold exports are directed to G7 countries and a very large part to the United Kingdom, London being home to the main financial center for the exchange of raw materials, including metals.
►Also read: War in Ukraine: Westerners want to prevent Russia from using its gold
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