All major Russian banks will be shut out from operating in the UK and large Russian firms will be blocked from raising capital in the City in a package of economic sanctions announced by Boris Johnson today, which has been described as the largest ever by a British government.
This will include VTB Bank, the country’s second-largest bank, having its British assets frozen immediately.
Johnson’s package of measures, in response to Russia’s invasion of Ukraine this morning, also includes plans to ban Russia from issuing state bonds in the UK, banning Aeroflot from landing in British airports and the sanctioning of 100 “individuals, entities and their subsidiaries”.
This will include freezing the assets of major defence firm Rostec, and banning the company from operating in the UK, along with five oligarchs closely linked to Vladimir Putin.
The Prime Minister said the government would also bring forward the planned Economic Crime Bill to parliament next week, which will see the UK try to stamp out dirty money being laundered by organised crime gangs and corrupt governments in the City of London.
Russian nationals will also soon have a limit to how much they can hold in British bank accounts, however the limit is yet to be set.
Johnson described Russian President Vladimir Putin as a “bloodstained aggressor who believes in imperial conquest” who “is trying to redraw the map of Europe in blood”.
“We have a clear mission – diplomatically, politically, economically and eventually militarily – this hideous and barbaric venture of Vladimir Putin must end in failure,” Johnson said.
“At the G7 meeting this afternoon, we agreed to work in unity to maximise the economic price that Putin will pay for his aggression. For our part, today the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen.”
British firms will also be banned from sending “high-tech exports” to Russia as a part of the package, which will see Russian businesses blocked from buying UK-made products like semi-conductors and aviation equipment.
Johnson also outlined the UK’s ambition to bar Russia from the Swift international payment and messaging system, however it is understood this is being held up by the EU who do not want to take this step.
Labour leader Sir Keir Starmer said the UK must provide “weapons, equipment, and financial assistance, as well as humanitarian support for the Ukrainian people”.
“The hardest possible sanctions must be taken against the Putin regime. It must be isolated, its finances frozen, it’s ability to function crippled,” he said.
“That means excluding Russia from financial mechanisms like SWIFT and banning trade in Russian sovereign debt.”
He added: “For too long our country has been a safe-haven, for the money that Putin and his fellow bandits stole from the Russian people. It must change now. Cracking open the shell-companies in which the stolen money is hidden will require legislation.”