The international working group on sanctions against Russia has presented the Roadmap of Financial Sanctions. The document contains an analysis of the impact of previously imposed sanctions on the financial system of the Russian Federation, a list of recommendations for increasing pressure on the aggressor state and a map of risks of the implementation of sanctions policy.
The developed proposals are based on the dependence of the Russian Federation on Western reserve currencies, markets and banks, in particular for trade. The purpose of the proposed restrictions is to deprive Russia of financial flows that the aggressor directs to sponsor the war.
To do this, three steps need to be taken: imposing full blocking sanctions on the entire financial sector of the Russian Federation; complete refusal to provide services and cooperate with the aggressor in the financial sphere; achieving institutional isolation by launching the transition to a new economic policy without Russia’s participation.
These measures correspond to three levels of new financial restrictions on Russia, which may be implemented in stages over the coming months. Experts from the Yermak-McFaul group have developed detailed proposals for the implementation of these sanctions.
First, it is necessary to impose full blocking sanctions on the 30 largest Russian banks with state capital, the Moscow Exchange, the National Settlement Depository, and the National Clearing Center. It is necessary to extend individual sanctions to Russian officials responsible for financial policy. Russia must be recognized as a state – sponsor of terrorism and blacklisted by the International Group Combating Money Laundering (FATF).
Gazprombank may remain the only Russian institution for transactions with goods that have not been subject to sanctions. To do this, the bank must obtain a special license, which will allow a limited amount of transactions and completely block other transactions.
Secondly, it is necessary to complete the severance of economic relations with Russia. Russia should be removed from Western funds and companies. Businesses and individuals should lose access to investment and other consulting services, asset management, and cryptocurrency markets. The group proposes further imposing of full blocking sanctions against all Russian banks and financial institutions.
Third, it is necessary to achieve institutional isolation of the Russian Federation. To this end, it is proposed to introduce strict tools for controlling financial transactions with Russia. Strict, centralized control and regulation of Russia’s trade to prevent theft of technology and intellectual property, especially for dual-use goods and services. Comprehensive export control should apply to Russian enterprises.
The group also proposes to introduce a new framework for transparency and disclosure of information about companies cooperating with Russia, in order to increase market and social pressure. It is necessary to strengthen the requirements for working with the aggressor and determine the grounds for the introduction of secondary sanctions.
The Roadmap of Financial Sanctions, as well as the previous documents of the Yermak-McFaul Group – the Action Plan for Strengthening Sanctions and the Roadmap of Energy Sanctions – will be submitted to the institutions responsible for implementing the sanctions policy. Sanctions pressure on Russia will be continued.