What are the sanctions imposed by the UK?

Boris Johnson announced earlier today that Britain would be sanctioning five banks and three individuals.

Rossiya Bank, İşbank, General Bank, Promsvyazbank and the Black Sea Bank will all be targeted. Gennady Timchenko, Boris Rotenberg and Igor Rotenberg are the three “very high net worth” individuals that will also be sanctioned.

“Any assets they hold in the UK will be frozen,” the Prime Minister said. “The individuals concerned will be banned from travelling here and we will prohibit all UK individuals and entities from having any dealings with them.

“This is the first tranche, the first barrage of what we are prepared to do and we hold further sanctions at readiness to be deployed alongside the United States and the European Union if the situation escalates still further.”

The UK will sanction members of the Russian Duma and Federation Council who voted to recognise the independence of Donetsk and Luhansk.

Mr Johnson has not yet imposed the UK’s complete package of sanctions despite Russia invading sovereign Ukrainian territory. The two areas Russian troops now occupy, Donetsk and Luhansk, were already held by Kremlin-backed separatists.

The latest sanctions were made after new legislation introduced earlier this month gave ministers powers to target companies and/or individuals “carrying on business of economic significance to the government of Russia”.

The statutory instrument also gives the Government the ability to target companies in sectors of “strategic significance” such as energy, financial services, and information technology, as well as those supportive of the Russian government and its ambitions in Ukraine. 

Having imposed business sanctions on Russia, Mr Johnson also insisted there is “no chance” of football tournaments being held in Russia in the wake of Vladimir Putin’s current activities.

St Petersburg is due to host this season’s Uefa Champions League Final in the spring, but the Prime Minister said: “It’s absolutely vital in this critical moment that President Putin understands that what he is doing is going to be a disaster for Russia.”

“He is going to end up with a Russia that is poorer as a result of the sanctions that the world will implement. A Russia that is more isolated, a Russia that has pariah status – no chance of holding football tournaments in a Russia that invades sovereign countries.”

“A Russia that is engaged in a bloody and debilitating conflict with a fellow Slav country. What an appalling result for President Putin. I hope that he steps back from the brink and does not conduct a full invasion.”

What could future sanctions look like?

Should Moscow’s invasion continue, the UK’s larger package could see further sanctions hitting major oligarchs as well as Russian business based in Britain.

There are currently 31 Russian companies listed on the London Stock Exchange, with a combined market value of £468bn, according to S&P Global. 

Many of these firms have secondary listings in London, with their primary listings in Moscow. 

Not every Russia-linked company with operations in the UK will be hit, but the broad definitions suggest most Russian companies with London listings could potentially fall within the government’s sanctions regime. 

Thwarting the ability of any Russian companies to raise capital on London’s markets would certainly represent an escalation in the UK’s response compared to previous Russia-related crises. 

After the poisoning of the former Russian spy Sergei Skripal and his daughter Yulia in Salisbury in 2018, Theresa May’s government issued similar threats regarding sanctions. 

However, Russian state energy empire Gazprom held a successful bond sale in London just days later. 

This prompted mockery from the Russian embassy, which wrote on Twitter that demand for the bond sale was “three times higher than the placing [€750m]. Business as usual?”.

Last week, Liz Truss, the Foreign Secretary, insisted it will not happen again. “I can assure you that if Russia invades Ukraine, we will be targeting all of those organisations. We will be extremely tough,” she said. 

Which companies could be targeted in the future? 

Energy and mining

Gazprom and Rosneft 

The Russian state-backed oil and gas giants have been raising capital on London’s markets since the 1990s, but could have that access cut off if Mr Johnson goes ahead with his pledge to ban them from doing so. 

Gazprom has also long been a money spinner for big City names such as law firms DLA Piper, Freshfields Bruckhaus Deringer and Linklaters as well as large international banks such as JP Morgan, Credit Suisse, UBS, Citigroup and Deutsche Bank.

Evraz

Investors are certainly concerned about potential reprisals. Shares in Evraz, the FTSE 100 steel and mining group, have collapsed by a fifth in the last five days following a demerger and investor jitters as the crisis deepens.

Chelsea football club owner Roman Abramovich is the company’s biggest shareholder, with a near-30pc holding. The share price collapse means the Russian billionaire has seen more than £500m wiped off his paper fortune. 

The company and Mr Abramovich deny that either fall within the criteria for sanctions.