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Ukraine Crisis – Russia / Ukraine Sanctions Update

UPDATE:

Week of October 10, 2022

  • Ukraine Sanctions Former Leaders Sympathetic to Russian Interests: On October 13, 2022, Ukraine signed a decree 694/2022 which imposes sanctions against former president Yanukovich, former defence minister of Ukraine Pavel Lebedev, Ukrainian businessman Sergey Kurchenko and Oleg Deripaska. Under the decree, their assets in Ukraine are subject to a freeze for ten years. https://www.president.gov.ua/en)
  • Zelenskyy Calls For More Sanctions at G7 Meeting: Following more strikes on October 11, 2022, Mr Zelenskyy called on the West to find new ways to apply political pressure to Russia and support Ukraine. The bloc – which consists of Canada, France, Germany, Italy, Japan, the UK and US – promised to continue providing “financial, humanitarian, military, diplomatic and legal” support to his country “for as long as it takes.” Mr Zelenskyy said: “For such a new wave of terror there must be a new wave of responsibility for Russia – new sanctions, new forms of political pressure and new forms of support for Ukraine.”(https://www.bbc.co.uk/news/world-europe-63223846)
  • Russia Confirms Meta’s Designation as Extremist Organisation: On October 11, 2022, the Russian authorities added Meta – which owns Facebook and Instagram – to a list of terrorist and extremist organisations, the country’s Interfax agency reports. The two platforms were banned in Russia in March for “Russophobia”. It followed Meta’s announcement it would permit posts such as “death to Russian invaders” but not credible threats against civilians. Meta appealed against the ban but it was upheld by a Moscow court in June. The US technology giant has rejected accusations it promotes anti-Russian sentiment. (https://www.bbc.co.uk/news/technology-63218095)
  • Russia Loses 60 Percent of its Seaborne Crude Market in Europe: On October 10, 2022, Bloomberg reported that Russia has lost three-fifths of its seaborne crude sales in Europe since Moscow sent troops into Ukraine in February. Crude shipments to Europe averaged 630,000 barrels a day in the four weeks to 7 October, down from 1.62 million before the invasion. (https://finance.yahoo.com/news/russia-loses-60-seaborne-crude-133641216.html)
  • Russia Establishes Corporation to Evaluate Nationalization of Sakhalin Oil Field: On October 8, 2022, Russian President Vladimir Putin signed a decree installing a new operator for a massive international oil-and-gas project in Russia’s Far East, affecting billions of investment dollars from major US, Japanese, and Indian companies. The maneuver and decree on October 7 appear to repeat a strategy that the Kremlin has used recently to seize other foreign-owned energy assets. Putin ordered that authority be given to the Russian government to decide whether foreign stakeholders in the massive Sakhalin-1 oil and gas project may retain their holdings in the joint venture. The move toward nationalization further complicates Exxon Mobil’s efforts to exit Russia since international sanctions were imposed over Putin’s order of a full-scale invasion of Ukraine in late February. Exxon has a 30 percent stake in the operations of Sakhalin-1. (https://www.rferl.org/a/putin-orders-seizure-sakhalin-1-oil-and-gas-project/32071061.html).
  • Backlog of Ships Strain Ukraine-Russia Black Sea Grain Export Deal: A UN-backed grain deal that has enabled Ukraine to export millions of tonnes of wheat is under strain as a surge in the number of cargo ships has caused a backlog aiming to cross the Black Sea. The number of vessels waiting to sail to or from Ukrainian ports reached a record high of 120 at the end of last week, prompting growing frustration in Kyiv and accusations of stalling tactics by Moscow at a time when Russia is struggling to repel Ukraine’s counteroffensive in occupied regions. (https://www.ft.com/content/ea258113-ff60-4a2e-8f87-0ad8a39cddd0).
  • Russian Diplomat says Moscow Prepared to Reject Renewal of Grain Export Deal: On October 13, 2022, it was announced that Moscow is prepared to reject the renewal of an agreement on grain exports from Black Sea ports unless its demands are addressed. Moscow has submitted a list of complaints about the agreement to the United Nations. UN officials are due in Moscow on October 16 to discuss the renewal of the agreement. Russia has complained about the implementation of the deal, claiming that the grain is failing to reach poorer countries as intended and saying it still faces difficulty selling fertilizer and food. (https://www.rferl.org/a/russia-reject-grain-deal-ukraine/32081082.html).
  • Richest Russian in Silicon Valley Renounces Russian Citizenship: On October 11, 2022, Yuri Milner renounced his Russian citizenship, along with his family.  Milner was born in Moscow in 1961 to a Ukrainian-Jewish father and a Russian-Jewish mother and has been an Israeli citizen since 1999, according to a factsheet on his website. He has a net worth of $3.5 billion, making him the richest Russian in Silicon Valley, according to Bloomberg. (https://www.businessinsider.in/policy/economy/news/yuri-milner-the-richest-russian-in-silicon-valley-has-renounced-his-russian-citizenship-amid-the-ukraine-war/articleshow/94783292.cms).

UPDATE:

Week of September 26, 2022

  •   Russia to formally annex four Ukrainian regions: On September 29, 2020, it was announced that Russia will formally annex four Ukrainian regions on Friday. So-called votes were held in Luhansk and Donetsk in the east, and in Zaporizhzhia and Kherson in the south. No independent monitoring of the Russian process took place and election officials were pictured going from door to door escorted by armed soldiers. Russian President Vladimir Putin will hold a signing ceremony on Friday formally annexing four areas of Ukraine after illegal sham referendums. The self-styled referendums, with military escorts and with voters held at gunpoint, took place over five days, with Russian-backed authorities claiming that a majority of residents said yes to joining Russia by Tuesday evening. (https://www.bbc.co.uk/news/world-europe-63072113).
  • Ukraine Maritime Trade Deal Uncertain: On September 29, 2022, Ukraine’s Agrarian Policy Minister Mykola Solsky said he cannot predict whether the deal brokered with the U.N. and Turkey to export grain via the Black Sea will be extended.  Speaking at POLITICO’s Future of Food and Farming Summit in Paris, Solsky said “it’s hard to discuss” the chances of continuing the deal – which allows Ukraine to conduct maritime trade despite its war with Russia – which is expected to expire in November. Despite agreeing to the deal in July, Putin has criticised it in recent weeks, claiming that the vast majority of the exported grain is going to rich countries in Europe, not the vulnerable countries that need it most. Such remarks have raised doubts that the deal will be renewed. “It’s very difficult to plan anything,” Solsky said. He added that Ukraine is working with the U.N. and Turkey to extend the deal, which is vital for the Ukrainian economy and for food-insecure countries, particularly in Africa. (https://www.politico.eu/article/ukraine-minister-black-sea-grain-deal-uncertain-because-putin-not-mentally-healthy/).Russian Gas Flows Across Ukraine Jeopardized in Transit Fee Spat: On September 28, 2022, Ukraine’s Naftogaz and Russia’s Gazprom are in disagreement over payments for gas shipments through pipelines across Ukraine – a trade that has continued despite the war between the two countries. Under a 2019 transit agreement, Moscow is responsible for paying for 40 billion cubic meters of gas to flow through Ukrainian pipelines this year, whether it actually sends the gas or not. In total, Ukraine expects to earn $7 billion from the deal that runs to 2024. However, this month Naftogaz sued for arbitration, claiming the latest bill to ferry that gas on to Europe was “not paid by Gazprom, neither on time nor in full.” Late on Tuesday, the Russian export monopoly warned: “Services that have not been provided by the Ukrainian party should not and will not be paid for.” The risk is that already diminished flows to the EU across Ukraine could fall to nothing. Russia, which traditionally supplied about 40 percent of the EU’s gas imports, has seen that dwindle to only 9 percent after halting or limiting sales to more than a dozen countries. (https://www.politico.eu/article/russian-gas-across-ukraine-jeopardized/).
  • Russia Awaits UN Efforts to Lift Western Sanctions on Fertilizers and Grain: On September 29, 2022, Foreign Ministry Spokeswoman Maria Zakharova told a briefing on Thursday that Moscow is awaiting UN efforts to remove Western restrictions impeding the exports of Russian grain and fertilizers to the global market. The diplomat explained that she was referring to the removal of several economic and logistical restrictions against Russia. “The issue is about permitting Russian vessels to enter European ports, and foreign vessels to enter Russian ports,” she said. (https://tass.com/economy/1515377).
  • VTB Calls on Putin to Block Grain Trade with “Unfriendly States”: Reuters reported on September 29 that VTB bank sent a letter to Russian President Vladimir Putin on September 14 calling on him to issue a decree prohibiting companies belonging to “persons related to unfriendly states” from buying Russian grain and oilseed for onward export. Its proposed order also would prohibit firms related to unfriendly states from owning Russian companies involved in grain loading capacity and grain storage. (https://www.reuters.com/markets/europe/exclusive-vtb-urges-putin-curb-western-grain-traders-russian-ops-letter-2022-09-29/).  
  • Replacement for Lego Launched in Russia: On September 29, 2022, the Inventive Retail Group is launching a multi-brand retail project dubbed Mir kubikov (The World of Cubes) on the retail premises, where Lego previously operated. The new project will consist of 65 stores in more than 20 cities across Russia, as well as an online store. Lego will remain on its list and will be purchased through parallel imports from other suppliers, since Lego has stopped working in Russia. (https://tass.com/economy/1515361).
  • Russia Grants Citizenship to Edward Snowden, 71 Other Individuals: On September 27, Russia granted former US intelligence contractor Edward Snowden, who leaked files on US mass surveillance programs, Russian citizenship, along with 71 other individuals. Snowden had applied for Russian citizenship, along with his wife, in 2020. The White House and Department of Justice declined to comment on the issue. (https://www.wsj.com/articles/edward-snowden-granted-russian-citizenship-by-vladimir-putin-11664212050).

UPDATE:

Week of September 19, 2022

  • Zelenskyy Aide Says More Pressure on Russia Needed: In a September 22 interview, Chief Economic Advisor to Ukrainian President Volodymyr Zelenskyy Oleg Ustenko said that the speed of Ukraine’s victory will depend on how much pressure allies place on Russia in the coming months. He supported a price cap on Russian oil, and urged allied countries to impose a similar price cap on Russian natural gas. After stressing the severity of Ukraine’s budget deficit, Ustenko said, “equally important is continuing to make sure that the country which is doing this aggression against us is really cut off from all possible financing.” https://abcnews.go.com/Business/wireStory/zelenskyy-aide-ukraine-funds-expand-russia-sanctions-90323380.
  • President Zelenskyy Calls for Sanctions in UNGA Address: On September 21, Ukrainian President Volodymyr Zelenskyy addressed the UN General Assembly (UNGA). During his speech, he outlined his plan for peace in Ukraine. One of the pillars of this plan was to “punish” Russia for its “crime of aggression” against Ukraine. As part of this plan, he said, “Therefore, sanctions against the aggressor are part of the peace formula. Blocking the trade and relations with the aggressor is part of the peace formula. All this is a punishment.” (https://www.president.gov.ua/en/news/vistup-prezidenta-ukrayini-na-zagalnih-debatah-77-yi-sesiyi-77905).
  • Russian Economic Expert Outlines Sanctions Impact: In a September 22 interview with Reuters, Oleg Vyugin, former First Deputy Chairman of the Russian Central Bank, stated that the Russian economy had been on pace for a five to six percent expansion, but, after the war in Ukraine, the Russian economy is on track for a four percent contraction. He stated that the biggest impact will be in the technologically advanced goods sector, where Russia relies heavily on imports. He stated, “the world will move forward, but Russia will only use some second-grade technology and spend huge resources to recreate what there already is in the world, but can’t be imported.” (https://www.reuters.com/markets/europe/no-catastrophe-sanctions-moscow-are-working-says-russian-economy-veteran-2022-09-20/).
  • Russia Issues Improved Economic Forecast for 2022 and 2023: On September 21, the Russian Economy Ministry released updated GDP projections for 2022 and 2023. The Ministry expects Russian GDP to return to growth in 2024-2025, increasing at a 2.6 percent rate on average. It also expects a GDP contraction of 2.9 percent for 2022, an improvement on previously issued projections. (https://www.bloomberg.com/news/articles/2022-09-21/russia-sees-smaller-economic-hit-from-sanctions-as-war-escalates).
  • Trading on the Moscow Exchange Experiences Another “Black Tuesday”: The stock exchange index was down by almost nine percent during the main trading session on September 20, tumbling back to last month’s lows. At first, the bears were set into motion by plans to increase the debt burden on oil and gas companies and later in the day, political news ramped up sales, Kommersant writes. At the beginning of the day, the market situation was affected by news about the government’s plans to collect some 1.4 trillion rubles ($23.1 bln) from commodity exporters in 2023. News about plans to hold referendums in areas where the special military operation is taking place, as well as amendments to the Russian Criminal Code related to mobilization and martial law, also negatively affected the market. It is about new risks, Chief Analyst at Ingosstrakh Investment Viktor Tunev stressed. According to him, market players weren’t sure how to react to them so they preferred to sell assets. (https://tass.com/pressreview/1510919).
  • Russian Oil Turns to Asia: India and China have been buying bulk of Russian oil, according to shipping data from both countries. At the Shanghai Cooperation Organisation summit in Uzbekistan, Russian President Vladimir Putin met Indian Prime Minister Narendra Modi and said the trade between the two countries was growing. Although exports to the EU have fallen since Russia’s invasion of Ukraine, the bloc is still buying a significant amount – over one million barrels of oil per day. However, EU members states have said they will ban all seaborne imports from December (most Russian oil comes by sea rather than by pipeline). India and China have recently become big buyers and now account for over half of all Russia’s seaborne oil exports. (https://www.bbc.co.uk/news/world-asia-india-60783874).
  • Xi and Modi ‘Not Standing with Putin’ over War in Ukraine: Public admonishments of Russian president Vladimir Putin by China and India over his invasion of Ukraine signal a shift in global perceptions of the war, western officials have said, amid efforts by Europe and the US to erode the Kremlin’s international support. Indian prime minister Narendra Modi’s chiding of Vladimir Putin and the Russian leader’s acknowledgment of concerns raised by Chinese president Xi Jinping last week were signs of discomfort with Moscow, three western officials said. The exchanges at the Shanghai Cooperation Organisation gathering in Samarkand marked the most public recognition of disquiet over the war in Ukraine by the two largest economies to not impose sanctions on Moscow. (https://www.ft.com/content/48301890-c8b2-4ed9-b977-b28d52d51f02).
  • McDonald’s Reopens in Kyiv: On September 20, McDonald’s reopened three restaurants in the Ukrainian capital of Kyiv. The company had suspended business in the country for seven months due to the Russian invasion. McDonald’s plans to reopen more restaurants in western Ukraine and Kyiv, and added that all restaurants will transition to dine in service once reopened, as the currently open Kyiv restaurants are open for delivery only at this time. (https://www.reuters.com/world/europe/offering-taste-normality-mcdonalds-reopens-kyiv-seven-months-into-war-2022-09-20/).

UPDATE:

Week of September 12, 2022

  • Russia’s Cash Reserves Run Dry as West Shuns Putin’s Energy: Russia’s budget surplus has shrunk significantly in the latest sign that its public finances are feeling the strain from sanctions and the Kremlin shutting off gas supplies to Europe. The budget surplus narrowed to 137 billion roubles (£1.9bn) in the first eight months of 2022, a sharp fall from 482 billion roubles in year-to-date data the previous month. Russia’s public finances have been bolstered by soaring energy prices boosting revenues since it invaded Ukraine. But economists warned Russia’s surplus will likely turn to a deficit in September as government revenues are hit by shrinking energy sales to Europe. Revenues from energy could be squeezed further as gas prices continue to slide. (https://www.telegraph.co.uk/business/2022/09/12/ftse-100-markets-live-news-energy-freeze-cost-living/)
  • Russia Sanctions 30 UK PR Experts and Defense Lobbyists: In response to Western sanctions on Moscow imposed over the war in Ukraine, the Russian Foreign Ministry announced on Wednesday that Russia has sanctioned “30 leaders of British structures responsible for the coordinated promotion of the anti-Russian information agenda, as well as representatives of the UK defence lobby”. (https://www.reuters.com/world/europe/russia-sanctions-british-pr-executives-defence-lobbyists-2022-09-14/)
  • Putin Tells Xi He Understands China’s ‘Questions and Concerns’ Over Ukraine: Vladimir Putin has told Xi Jinping that he understands China’s “questions and concerns” about the war in Ukraine, in a rare nod to tensions between the two states caused by the Russian invasion. The remarks came as Xi and Putin met on Thursday for the first time since the war began, at a summit in Uzbekistan where the Russian president was expected to court the Chinese leader personally as an ally in his conflict with the west. China has avoided voicing public support for the invasion or of providing military or economic aid that could incur secondary sanctions. (https://www.theguardian.com/world/2022/sep/15/putin-thanks-xi-china-balanced-stance-on-ukraine-invasion-russia)
  • Russian Oil and Gas Revenues Drop to 14 Month Low: On September 13, the Russian Finance Ministry reported oil and gas revenues of 671.9 billion rubles ($11.1 billion), the lowest reported oil and gas revenues since June 2021. It is a drop of almost 13 percent from July and a 3.4 percent year over year decline. The announcement comes after the western countries announced their intent to impose a price cap on Russian oil, which will likely have further negative impacts on Russian oil revenues.(https://www.bloomberg.com/news/articles/2022-09-13/russia-energy-revenue-drops-to-14-month-low-on-sanctions-fallout).
  • Russia Estimates Lost Revenue Due to Sanctions: On September 14, Bloomberg reported on an internal Russian Ministry of Finance document that listed “direct losses” to the Russian economy as a result of global sanctions efforts. The losses include a 40 percent drop in stock market capitalization, $300 billion in Central Bank reserves frozen, 4.6 trillion rubles in Eurobonds frozen, a 10 percent drop in banking system capital, and 563 billion rubles in retail and depository assets frozen. (https://www.bloomberg.com/news/articles/2022-09-14/russia-quietly-adds-up-direct-losses-from-financial-sanctions).
  • Russian Pilots Instructed to Repair Their Own Planes: Speaking at the Eastern Economic Forum in Vladivostok, Oleg Bocharov, Russia’s Deputy Minister for Industry and Trade, said that pilots of regional Russian airlines will need to carry out maintenance on their own planes. He was reported as saying pilots must “simultaneously be pilots and aircraft technicians. And the equipment should provide for the possibility of field repairs in operation.” (https://www.newsweek.com/russia-pilots-repair-planes-sanctions-ukraine-war-report-1743217).
  • Rosneft Semi-annual Report Shows Increasing Income: On September 15, Russian oil producer Rosneft released its semi-annual financial report. The report indicates that net incomes rose 13 percent as compared to the first half of 2021 to 432 billion rubles ($7.2 billion). The increase is largely due to a diversification of buyers and global increases in oil prices. (https://www.wsj.com/livecoverage/stock-market-news-today-09-15-2022/card/rosneft-russian-state-oil-giant-posts-higher-profits-after-crude-price-surge-3jNEB87poJARhQvOsJbb).

UPDATE:

Week of August 29, 2022

UPDATE:

Week of August 22, 2022

  • Moscow Exchange to Stop Accepting US Dollars as Collateral: On Monday (August 22), the Moscow Exchange announced that it would ban the use of dollars as collateral to underwrite transactions beginning on August 29. The Exchange previously announced that it would limit the use of dollars as collateral to 25 percent of all transactions. (https://www.reuters.com/markets/currencies/moscow-exchange-ban-use-dollars-collateral-aug-29-2022-08-22/).
  • Russia Set to Revive Local Bond Sales After Six-Month Freeze: Russia will resurrect local bond sales as soon as next month, and it wants yuan-denominated debt to eventually play a role as it retools its sanctions-hit markets.  Sales of ruble bonds, known as OFZs, could resume with small offerings in the second half of September after a six-month hiatus. Meanwhile, the Kremlin is reportedly ramping up plans to debut the yuan locally as trading volumes between the ruble and Chinese currency have grown 40 fold since the start of the year. (https://markets.businessinsider.com/news/bonds/russian-bond-sales-ruble-yuan-china-xi-putin-urkaine-energy-2022-8).
  • Russian Gold Producer Polyus Issues Bonds in Chinese Yuan: Russia’s largest gold producer Polyus issued bonds denominated in the Chinese yuan worth 4.6 billion yuan ($670 million), it said on Wednesday, becoming the second Russian company to borrow in yuan within a month. Russia has charged up to third place on a list of countries outside mainland China using the yuan for global payments, highlighting how it is being affected by sanctions, according to the global financial messaging firm SWIFT. (https://uk.finance.yahoo.com/news/russias-no-1-gold-producer-125019055.html).
  • Russia Prepared to Strengthen Countermeasures: In an interview with Tass, Russian Deputy Foreign Minister Alexander Pankin warned Russia is ready to toughen its response if Western sanctions intensify further, however, it will try to avoid any confrontation. (https://tass.com/politics/1496239).
  • Russian Foreign Minister Pledges to Fight Western Sanctions: In an interview with Tass, Russian Deputy Foreign Minister Alexander Pankin said Russia does not accept the current sanctions and asset freezes in the West, stating “we have repeatedly stressed that we view the freeze as illegitimate and in violation of all international law norms and principles”. Pankin pledged to “use all the available legal mechanisms to cancel those illegitimate decisions”. (https://tass.com/politics/1496227).
  • Ukraine’s Foreign Minister Calls for Ban on Russian Tourists: In a letter in Politico on Thursday, Ukraine’s foreign minister Dmytro Kuleba explained why banning Russian tourists from traveling to Europe and beyond is ethical and appropriate. (https://www.politico.eu/article/ukraines-foreign-minister-shut-the-door-on-russian-tourists/).
  • Budget Carrier Wizz Air Suspends Relaunch of Russia-UAE flights: European budget carrier Wizz Air has suspended plans to resume flights from the Russian capital, Moscow, to Abu Dhabi in the United Arab Emirates, amid mounting criticism over its decision to relaunch the route. In its statement, Wizz Air made no mention of a growing social media backlash, which included some calls to boycott the airline, but referred only to “industry supply chain limitations”. (https://www.aljazeera.com/news/2022/8/20/wizz-air-suspends-relaunch-of-russia-uae-flights).
  • Russia Announces Temporary Maintenance on Nord Stream Pipeline: On Friday (August 19), Russia announced that the Nord Stream pipeline would undergo unscheduled maintenance between August 31 and September 2. The announcement indicates that the shutdown is required to service the pipeline’s only remaining compressor, and shipments will resume at 33 percent capacity once maintenance is complete. However, European leaders are concerned that this may lead to a more prolonged shutdown. (https://www.cnbc.com/2022/08/22/european-gas-prices-surge-as-russia-announces-nord-stream-1-shutdown.html).
  • Alrosa Exports Approach Prewar Levels: Bloomberg reported on Tuesday (August 23) that Russian diamond mining firm Alrosa was selling more than $250 million worth in diamonds per month, only about $50 to $100 million below prewar levels. Increased demand from India has made up for sanctions on the Russian diamond industry elsewhere. There is no indication that Alrosa has violated any sanctions laws, as current restrictions only block the import of unpolished stones.  (https://www.bloomberg.com/news/articles/2022-08-23/russian-diamonds-are-quietly-flowing-again-after-sanctions-chaos).
  • Oligarch Seeking Sanctions Relief from Western Governments: Sources close to sanctioned oligarch Alexey Mordashov told The Wall Street Journal on Thursday (August 25) that he intends to restructure ownership of his businesses to ease his personal sanctions burden. Any proposed plan would require signoff from sanctioning government entities. US officials confirmed that they had not yet received any proposals from Mordashov, and that they “carefully consider the impact to U.S. foreign policy priorities throughout this process” of imposing sanctions. (https://www.wsj.com/articles/sanctioned-russian-oligarch-explores-ways-to-ease-the-pain-of-restrictions-11661436206).
  • UN Chief Says Russian Food and Fertilizer Must Get to Market: UN Secretary-General Antonio Guterres has said that governments and the private sector should cooperate to bring Russian food and fertilizers, as well as Ukrainian grain to world markets under a deal agreed last month. (https://www.aljazeera.com/news/liveblog/2022/8/20/russia-ukraine-live-news-putin-to-attend-g20-in-november-in-bali).
  • Zaporizhzhia Exporting 7,000 Tonnes of Grain Per Day: The Russian-controlled part of Zaporizhzhia, located southeast of Ukraine, is transporting up to 5,000 tonnes of grain per day by railway, and between 1,500 and 2,000 tonnes per day by vehicle, Yevgeny Balitsky, the head of the Russian-installed administration there said on social media. He did not say where the exports were heading. (https://www.reuters.com/markets/commodities/russia-controlled-zaporizhzhia-says-its-exporting-up-7000-t-grain-per-day-2022-08-20/).
  • Around 720,000 Tons of Food Have Left Ukraine Under Grain Export Deal: A total of 33 cargo ships carrying around 719,549 tonnes of foodstuffs have left Ukraine under a deal brokered on July 22 by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian agriculture ministry said on Tuesday. (https://www.reuters.com/markets/europe/around-720000-tonnes-food-have-left-ukraine-under-grain-export-deal-2022-08-23/).
  • Russia is Exporting More Fuel Oil to Asia: Under pressure from Western sanctions, Russia is exporting more fuel oil to Asia and using ship-to-ship transfers to build larger cargoes for distant markets. The European Union has been reducing imports of Russian oil products since March and has agreed a full ban from February 2023. At the same time, Russia’s supplies to Asia and the Middle East, as well as some African states, are growing. Saudi Arabia, the world’s largest oil exporter, more than doubled the amount of Russian fuel oil it imported in the second quarter to feed power stations for a summer surge in air-conditioning and free up its own crude for export. (https://www.euractiv.com/section/energy/news/sanctions-hit-russia-sending-fuel-oil-to-asia-loadings-at-greek-terminal-increasing/).
  • Russia to Use Iran As Backdoor for Oil Sales: According to Western diplomats, Russia plans to use Iran as a backdoor to circumvent international sanctions over Ukraine if Tehran’s nuclear accord with world powers comes back into force. Under what traders call a “swap” arrangement, Iran could import Russian crude to its northern Caspian coast and then sell equivalent amounts of crude on Russia’s behalf in Iranian tankers leaving from the Persian Gulf. Iran would refine the Russian oil to sate its own domestic demand while, thanks to the nuclear pact, the Iranian oil exported from the south would be exempted from sanctions. (https://www.politico.eu/article/russia-eyes-iran-as-sanctions-busting-backdoor-for-oil-sales/).
  • Starbucks Reopens in Russia Under New Ownership: On Friday (August 19), Starbucks’ former flagship store in Moscow reopened under new ownership as “Stars Coffee,” maintaining visually similar branding schemes as the prior occupant. The new owner said that he intends to open 10 more stores around Russia in the next week, and all locations will be open within two months. (https://www.wsj.com/articles/starbucks-replacement-opens-in-russia-with-similar-look-11660905370).

UPDATE:

August 08, 2022

  • YouTube Continues Broadcasts in Russia: Despite widespread restrictions on other Western social media companies, YouTube has largely been spared by the Russian government to date, despite its policies of blocking pro-Putin channels. Analysts believe that YouTube is “too big to be blocked” for the time being, and YouTube continues operating in Russia in an effort to inform the population of the realities of the Ukraine conflict. However, Igor Ashmanov, a member of Russia’s presidential council for civil society and human rights development, told a state-news agency that he expected YouTube to be blocked in Russia by the fall. (https://www.wsj.com/articles/how-youtube-keeps-broadcasting-inside-russias-digital-iron-curtain-11659951003?mod=hp_lead_pos7).
  • Russia Sanctions Additional Canadians: On Saturday, the Russian Foreign Ministry announced new sanctions on 62 Canadian citizens. The restrictions have been imposed in response to Canada’s July round of sanctions on Russian government officials and Russian Orthodox Church Patriarch Kirill I. (https://www.presstv.ir/Detail/2022/08/06/686883/Russia-imposes-retaliatory-sanctions-on-62-Canadians).
  • New Decree Allows Certain Russian Banks to Suspend Foreign Exchange Transactions in Certain Currencies: A new Russian Presidential decree issued Monday allows Russian banks that have had their foreign currency funds frozen due to western sanctions to suspend operations in such currencies with their corporate clients. This measure may stay in place until the relevant asset freezes are lifted. (https://www.reuters.com/markets/europe/putin-allows-russian-banks-under-sanctions-halt-some-fx-operations-2022-08-08/).
  • Russia Keeps Investors from ‘Unfriendly’ Nations Frozen Out: Russia’s Central Bank announced steps on Monday aimed at preventing investors from “unfriendly” countries from taking advantage of plans to allow those from “friendly” nations to resume trading on the Moscow stock market. The Moscow Exchange said it would allow clients from countries not subject to sanctions to start trading on the Moscow stock market. The change applies to the derivatives market and not the main stock market. (https://www.reuters.com/markets/europe/russia-keeps-investors-unfriendly-nations-frozen-out-2022-08-08/).
  • Russian Airlines Scavenging Fleets for Parts: On Monday, Reuters reported that sources within major Russian airlines, including flag carrier Aeroflot, said that the airlines are resorting to scavenging planes in their fleet for parts, as sanctions make it difficult to source replacement parts to the country. (https://www.reuters.com/business/aerospace-defense/exclusive-russia-starts-stripping-jetliners-parts-sanctions-bite-2022-08-08/).
  • Ukrainian Parliament Considers New Sanctions on Russia: The Verkhovna Rada is considering new sanctions on Russia for ten years, including restrictions related to capital, real estate, public procurement, entry of ships and flights, financial transactions, investment in Russia, technology transfer, and more. These restrictions would not apply to Russian citizens legally residing in Ukraine and companies established and operating under Ukrainian law by Russian citizens legally located in Ukraine. (https://interfax.com.ua/news/general/851222.html).
  • Zelenskyy Calls for Sanctions on Russian Nuclear Industry and Nuclear Fuel: After a Russian attack on an atomic power in Ukraine and speaking with European Council President Charles Michel, Zelenskyy tweeted that “Russian nuclear terror requires a stronger response from the international community, [including] sanctions on the Russian nuclear industry and nuclear fuel.” Michel stated that “reports of shelling are alarming; its safety is of the highest concern.” (https://www.politico.eu/article/zelenskyy-calls-for-sanctions-on-russian-nuclear-industry-amid-disaster-warnings/).
  • Notable Russian Defense Sector Executives Escape Sanctions: On Monday, analysts at Trap Aggressor published a report stating that various Russian defense contractors, like Almaz Antey, have not been subject to sanctions to date. The group specifically identifies Almaz Antey General Director Yan Novikov, General Designer Pavel Sozinov, and Deputy General Director for Scientific and Technological Development Sergey Druzin as individuals that have thus far escaped sanctions. (https://euromaidanpress.com/2022/08/08/ceos-of-russias-largest-military-concern-are-still-sanction-free/).   
  • Ukraine Commits To Reliable Grain Supplies Absent Russian Intervention: After the first Ukrainian grain ship arrived in a Turkish port after an agreement between Russian and Ukraine, Ukrainian Foreign Affairs Minister Dmytro Kuleba stated, “Arrival of the first vessel with Ukrainian grain to the Turkish port is a message of hope for every family in the Middle East, Africa, and Asia: Ukraine will not abandon you. We have always been, we are, and we will be a reliable supplier of agricultural products. Unlike Russia, we do not play the ‘Hunger Games’.” (https://www.ukrinform.net/rubric-polytics/3545940-fm-kuleba-ukraine-guarantees-stability-of-grain-exports-if-russia-does-not-break-agreement.html).
  • Medvedev Vows to Attain “Peace on Our Terms”: In a Monday interview with TASS, Deputy Chairman of the Russian Security Council and former Russian President Dmitry Medvedev stated Russia is committed to “attaining peace on our terms” in Ukraine, and compared the conflict to the 2008 war in Georgia, saying, “the goal [of the West] is the same: to destroy Russia.” (https://www.reuters.com/world/europe/medvedev-west-wants-destroy-russia-tass-2022-08-08/).
  • Op-Ed from Chief Economic Advisor to Ukrainian President Zelenskyy – Western Energy Sanctions on Russia are “Phantom”: In an op-ed in the Financial Times, chief economic advisor to Ukrainian President Zelenskyy, Oleg Ustenko, stated that western sanctions on Russian energy “do not exist”, pointing to loopholes and limited effectiveness of the US, EU, and UK sanctions regimes. (https://www.ft.com/content/e593ae2f-62c5-4d8a-8011-b18b6cdee5d0).
  • Russian Media Agency Reports Censorship of 138,000 Websites Since War in Ukraine: Russian prosecutor general Igor Krasnov stated that following over 300 requests from prosecutors, Russia’s communications watchdog Roskomnadzor has censored 138,000 websites for “fake news”.  Kransov stated, “[a]fter the start of the special military operation, we have strengthened our counteraction to the spread of calls for extremism and terrorism, mass riots and fake news on the internet.” (https://www.themoscowtimes.com/2022/08/08/russia-has-blocked-138k-websites-since-ukraine-invasion-prosecutor-says-a78532).  

UPDATE:

August 05, 2022

UPDATE:

August 04, 2022

  • Russian Central Bank Calls on State companies to Transfer Foreign Exchange Holdings to Currency from “Friendly” Countries: In a statement to a business journal on Thursday, the Russian Central Bank called on state-owned companies to transfer their foreign exchange reserves from Western currencies including the dollar and euro to the currencies of so-called “friendly” countries, or countries that have refrained from imposing sanctions on Russia. (https://finance.yahoo.com/news/russian-central-bank-recommends-companies-093221428.html).
  • Western Sanctions Continue to Impact Russian Sakhalin Projects: Amid Western sanctions, operator Exxon-Mobil announced it is transferring its 30% share in the Sakhalin-1 oil and gas project to an unnamed other party, while Russian state energy company Rosneft blamed a slump in oil production on Exxon-Mobil. Separately, with regards to the Sakhalin-2 project, Russian announced that state energy company Gazprom  will receive just over 50% of the new Russian entity replacing the Sakhalin Energy company and the new company will hold the remaining 49.99% until existing Sakhalin-2 shareholders apply for a stake before early September. (https://www.reuters.com/business/energy/russias-gazprom-get-50-sakhalin-2-lng-project-replacement-entity-reports-2022-08-03/).
  • Mining Company Petropavlosk to Sell Assets: On Thursday, Russian mining company Petropavlosk announced that it would sell its Russian domestic subsidiaries to metal producer UMMC. The company went into administration in July, as sanctions on Gazprombank, its main lender and sole purchaser of gold, had hurt its bottom line.  (https://www.reuters.com/business/petropavlovsk-sell-russian-assets-600-mln-ummc-2022-08-04/).
  • Russian Pilots Told to Brake Less Due to Supply Issues: Internal memos from S7 Airlines, Urals Airlines, Rossiya, and Pobeda all instructed their pilots to reduce their use of brakes to avoid wear and tear on plane parts, as sanctions on airplane inputs become more and more difficult to source. Aeroflot has not instituted a similar written policy, but media outlets have reported similar informal instructions. (https://www.msn.com/en-gb/travel/news/russian-pilots-told-to-brake-less-as-spare-parts-run-out/ar-AA10h0eI).
  • Ukrainian Government Asks Norway To Close Port Access for Russian Fishing Vessels: Amid a ban on access by Russian vessels to Norway’s ports, in line with EU restrictions, Norway has allowed Russian trawlers to retain access. In a letter to the Norwegian government and parliament, the Ukrainian government asked Norway to reconsider this decision. (https://www.highnorthnews.com/en/ukraine-wants-norway-remove-exception-giving-russian-fishing-vessels-port-access).

UPDATE:

August 03, 2022

UPDATE:

August 02, 2022

UPDATE:

August 01, 2022

  • Russia Imposes New Sanctions on UK and New Zealand Individuals: In response to UK sanctions on Russian officials and “London’s hostile course aimed at the demonisation of our country and its international isolation”, Russia imposed new sanctions on 39 individuals, including David Cameron, Sir Keir Starmer, and a number of Scottish officials, and UK journalists. These individuals will no longer be able to enter the Russian Federation as a result of these sanctions. Russia also announced new sanctions on 32 New Zealand officials and journalists for supporting the country’s “Russophobic agenda”. (https://www.reuters.com/world/europe/russia-bars-entry-39-british-politicians-businessmen-journalists-2022-08-01/; https://www.reuters.com/world/russia-bars-entry-32-new-zealanders-sanctions-response-2022-07-30).
  • First Grain Ships Departs Odessa Since Start of War: On Monday, the M/V Razoni cargo ship departed Odessa carrying 26,500 metric tons of corn. This is the first grain shipment to leave Ukraine since the start of the conflict in Ukraine, and proof that a recently brokered UN agricultural shipping agreement may hold. (https://www.cnn.com/2022/08/01/europe/ukraine-grain-first-shipment-odesa-intl/index.html).
  • Putin States That International Sanctions on Russia “Do Not Reflect the Realities of Global Politics and the Economy”: In a meeting with metal industry executives on Monday, Russian President Vladimir Putin is reported to have stated that “I have already said that these decisions were made by Western countries for the sake of political interests – the current, opportunistic ones that do not reflect the realities either in global politics or the global economy“. He also reportedly stated that, “[n]ot to mention such things as adherence to the principles of the WTO – they were simply thrown away.” (https://tass.com/politics/1487529).
  • Bloomberg Profiles Russia Sanctions Response Architect: On Saturday, Bloomberg released a profile of Maxim Oreshkin, an economic aide to Russian President Vladimir Putin who is rumored to be behind many of Russia’s sanctions response policies, including the rubles-for-gas payment scheme and strategies to blunt the impact of SWIFT restrictions on Russian banks. He is part of a set of elite young technocrats in the Kremlin who began their careers at major Russian banks like VTB before shifting their focus to economic policy. (https://www.bloomberg.com/news/articles/2022-07-30/meet-the-russian-architect-of-putin-s-economic-counterattack).
  • Counterfeit Alcohol Fears Rise as Russia Runs Out of Imported Alcohol: A report by Russian media states that Russian warehouses are estimated to run out of alcohol supplies in August and September and prices on imported alcohol spike and Russia. Large global alcohol producers, including Diageo and Bean Suntory, have announced departures from the Russian market. (https://news84media.com/russia-ukraine/russian-restaurants-are-running-out-of-imported-alcohol/).
  • Russian Manufacturing Sector Remains Steady Amid Sanctions: The S&P Global Purchasing Managers’ Index (PMI) shows the third consecutive month of improvement in the Russian manufacturing sector, but noted that there were only fractional improvements in operating conditions due to output levels, raw materials shortages, salary competition among workers and weak demand. While new export orders continued to fall, Russia firms were able to replace foreign business with domestic replacement, clients and the level of new orders rose at its fastest pace in more than three years, although output levels fell at their sharpest rate since January 2009. (https://finance.yahoo.com/news/russian-manufacturing-sector-grows-only-060107126.html).

UPDATE:

July 29, 2022

UPDATE:

July 28, 2022

UPDATE:

July 27, 2022

UPDATE:

July 26, 2022

  • Ukraine Calls for More Sanctions in Response to Russia’s ‘Gas War’:  President Volodymyr Zelenskyy said Europe should avoid concessions to Moscow and focus on cutting trade with and energy dependence on Russia in a statement on his Telegram channel late Monday. He stated, “Do everything to limit Russian revenues not only from gas and oil, but also from any remaining exports… Sever trade ties with Russia as much as possible, because every such tie is Russia’s potential tool of putting pressure.” The statement followed Moscow’s announcement that it would further reduce natural gas shipments to Europe. (https://www.wsj.com/articles/ukraine-calls-for-more-sanctions-in-response-to-russias-gas-war-11658826455).
  • Naftogaz Enters Default: Ukrainian state energy company Naftogaz defaulted on Tuesday, after the company said it would not make payments on international bonds before a Tuesday deadline. The default may accelerate repayment on two other Naftogaz bonds, but it does not trigger a sovereign cross-default. Naftogaz is the first Ukrainian government entity to default since the start of the Russian invasion. (https://www.reuters.com/business/ukraines-naftogaz-stumbles-into-default-amid-new-debt-overhaul-push-2022-07-26/).
  • Russia Says It Will Quit the International Space Station After 2024: The new head of the space agency, Yuri Borisov, announced on Tuesday that Russia would leave the International Space Station after 2024. It is unclear whether the station can operate without Russia’s involvement after 2024, given that the station has two sections, one led by NASA, and one led by Russia. (https://www.nytimes.com/2022/07/26/science/russia-space-station.html).
  • Ukraine Aims for $15-20 Billion IMF Loan by the End of the Year: Ukraine’s Central Bank Governor Kyrylo Shevchenko told Reuters on Tuesday that Kyiv had already submitted its loan request to the IMF, and was now in consultation with the fund over the new financing that he hoped would provide as much as $20 billion over two or three years in form of a Stand-By Arrangement (SBA) or an Extended Fund Facility (EFF). (https://www.reuters.com/markets/europe/exclusive-ukraine-aims-15-20-bln-imf-loan-by-year-end-central-bank-governor-2022-07-26/).
  • Ukraine Lifts Ban on Rye, Mineral Fertilizer Exports: According to the Cabinet of Ministers, Ukraine’s ending wheat stocks have been estimated at about 73,000 tons, and grain production output is expected to reach about 351,000 tons. This will allow the country to meet the annual domestic demand of 353,000 tons, so the Cabinet has lifted its ban on agricultural exports. (https://www.ukrinform.net/rubric-economy/3537470-government-lifts-ban-on-rye-mineral-fertilizer-exports.html).
  • Ukraine Urges EU to Ask Russians Applying for Schengen Visas if they Support the War: Ukrainian Special envoy on Sanctions Oleksi Makeiv called on the EU to ask Russian nationals applying for visas in European Union countries if they support the war in Ukraine, if they or their relatives have committed war crimes, or if the applicant feels any responsibility for the war in order to receive the visa. (https://www.schengenvisainfo.com/news/ukraine-urges-eu-to-ask-russians-applying-for-schengen-visas-if-they-support-the-war/).
  •  Yale Report Suggests Sanctions Have Been Effective at Crippling the Russian Economy: A new 118-page paper from Yale’s Jeffrey Sonnenfeld and 18 co-authors suggests that “Russian imports have largely collapsed.” The report says “Russian domestic production has come to a complete standstill” and “Foreign companies that have left Russia account for 40% of Russian GDP.” In terms of Europe’s reliance on Russia, just 46% of its natural gas comes from Russia. (https://www.axios.com/2022/07/26/russia-sanctions-economic-impact).
  • IMF Upgrades Russia GDP Estimate, Still Predicts Large Contraction: On Tuesday, the International Monetary Fund upgraded Russia’s GDP forecast by a remarkable 2.5 percentage points, as stubbornly high energy prices are maintaining Russian revenues. However, the estimate still indicates that the Russian economy will contract by 6 percentage points in 2022. (https://www.euractiv.com/section/global-europe/news/russia-doing-better-than-expected-despite-sanctions-imf/_).

UPDATE:

July 25, 2022

  • Russia Cuts Gas Delivered Via Nord Stream 1: State-owned energy group Gazprom said on Monday that it would cut existing flows on the Nord Stream 1 pipeline to just 20 per cent of capacity beginning on Wednesday. The pipeline was already operating at a reduced capacity, 40 percent. Gazprom claimed that the cuts were due to delays in receiving a turbine from Siemens, but European analysts claim that this justification is pretextual. (https://www.ft.com/content/b193dc11-5069-41f5-ba86-2a83ea78f911).
  • Russian Retail Investors ask VTB to Compensate Them for Foreign Losses. A few dozen Russian retail investors handed in a letter to the country’s second-biggest bank VTB on Friday asking for compensation for losses made on their foreign investments after Western sanctions were imposed earlier this year. The letter alleges that VTB stopped sales of foreign shares on March 3, 13 days before Euroclear suspended operations with its Russian counterpart; Reuters was unable to independently confirm this allegation. (https://www.reuters.com/markets/europe/russian-retail-investors-ask-vtb-compensate-them-foreign-losses-2022-07-22/).
  • Lavrov Continues Tour Through Africa: Over the weekend, Russian Foreign Minister Sergei Lavrov visited Egypt, Ethiopia, Uganda and the Republic of Congo. Lavrov is seeking to convince African leaders that Moscow cannot be blamed for the conflict in Ukraine and its ensuing food crisis. (https://www.nytimes.com/2022/07/24/world/europe/russia-grain-africa-lavrov.html).
  • Ukraine Expects EU to Impose Embargo on Russian Gas: In a briefing for foreign media on Friday, Dmytro Kuleba, Minister of Foreign Affairs of Ukraine, said that, in his negotiations with the EU, he has “not heard any sign of sanctions fatigue” and said the EU is approaching an embargo on Russian gas. He noted that imposing these sanctions “would be a real battle.” (https://www.ukrinform.net/rubric-polytics/3534905-kuleba-were-getting-closer-to-imposition-of-sanctions-on-russian-gas.html).
  • Computer Equipment Enters Russia under Parallel Import Scheme: On Monday, Kommersant reported that laptops and keyboards with Russian-language layouts are entering Russia through  a parallel import scheme, which allows Russian companies to import trademarked material without the mark holder’s permission. These keyboards are engraved with Cyrillic characters upon import to Russia; demand for these engraving services has increased. (https://www.themoscowtimes.com/2022/07/25/parallel-imports-cut-russian-keyboard-supplies-kommersant-a78393).
  • Russians Turn to Their Gardens to Offset Sanctions: The Wall Street Journal reported on Sunday that, with the Russian state economy failing to produce enough fruits and vegetables on its own due to sanctions, the Russian government is encouraging people to plant their own gardens. Close to half of Russians own a country house or a garden plot, according to a survey done this year by the Russian Center for Public Opinion and Market Research.  Food prices were up 19.1% in June compared with the same month in 2021, while prices for some products such as sugar, up 48% compared with a year earlier, and pasta, up 28% in the same period, have risen far more. (https://www.wsj.com/articles/russians-turn-to-their-gardens-to-offset-sanctions-11658619876).
  • Avtovaz to Relaunch Off-Road Lada: On Monday, Russian Automaker Avtoaz announced that it would revive the Lada Niva Legend, an off road model, as sanctions impact the Russian auto industry. In its announcement, Avtovaz said that it would produce 1,800 cars in this release, made with 95 percent Russian inputs. (https://www.themoscowtimes.com/2022/07/25/limited-off-road-lada-hits-the-russian-market-a78398).

UPDATE:

July 22, 2022

UPDATE:

July 21, 2022

UPDATE:

July 20, 2022

UPDATE:

July 19, 2022

  • Putin Meets with Iranian Supreme Leader: In his first foreign trip since the conflict in Ukraine started, Russian President Vladimir Putin traveled to Iran on Tuesday, where he met with Supreme Leader Ayatollah Ali Khamenei, who expressed his support for the Russian invasion and for greater ties between the two countries. President Putin also met with the current President of Turkey, Recep Tayyip Erdogan, “to discuss a deal that would resume Ukraine’s Black Sea grain exports as well as the conflict in northern Syria.” During the visit. Khamenei expressed the importance of staying vigilant against Western deception. The leaders also suggested that they may start “using their own national currencies when trading goods.”(https://www.reuters.com/world/putin-visits-iran-first-trip-outside-former-ussr-since-ukraine-war-2022-07-18/).
  •  Gazprom Signs Major Deal in Iran: According to Iranian media, Gazprom “has signed a major agreement in Iran” even though the company recently declared force majeure to customers in Europe. The deal is expected to be worth approximately $40 billion. The deal is expected to occur despite current sanctions against both countries. (https://www.jpost.com/middle-east/iran-news/article-712520).
  •  Russia Considering New Budget Rule: As sanctions, inflation, and a strong ruble combine to stress the Russian budget, Reuters reported that the Russian government is considering new rules to diver excess oil revenues to state funds and set a new cut-off oil price at $60, an increase from its current $40. The government is also looking to increase its foreign currency reserves from “friendly countries” in an effort to influence dollar and Euro exchange rates.(https://www.reuters.com/business/energy/russia-introduce-new-budget-rule-60-per-barrel-oil-vedomosti-2022-07-19/).
  •  Russia Hits Google with a $375M Fine for Allowing ‘Prohibited’ Ukraine News on its Platforms: On Tuesday,  Russia fined Google $374 million after failing to “remove prohibited information – content related to the country’s invasion and subsequent war in Ukraine” and for failing to delete “materials promoting extremism and terrorism across its platforms.” Google has not commented publicly on the fine. (https://www.reuters.com/business/energy/russia-introduce-new-budget-rule-60-per-barrel-oil-vedomosti-2022-07-19/).

UPDATE:

July 18, 2022

UPDATE:

July 15, 2022

  • Putin Signs Law to Help Sanctioned Russians Petition to Move Frozen Assets: On Friday, Russian President Vladimir Putin signed a law that gives Russian investors the right to request a foreign institution holding frozen securities to transfer depositary accounting rights in those securities to a Russian organization. These investors may exercise this right by filing an application with the bank within 90 days of the law’s publication. (https://www.reuters.com/markets/europe/putin-signs-law-seeking-help-russian-investors-ditch-frozen-assets-2022-07-15/).
  • Interfax: Russia to Block Sales of Foreign Bank Branches in Country: On Friday, Interfaxreported that Deputy Finance Minister Aleksey Moiseev said that, if a foreign bank attempts to sell its branch in Russia, the Russian government will block the sale. He said that this restriction will remain in place “until the situation has improved”, presumably referring to Western restrictions on Russia. (https://www.bloomberg.com/news/articles/2022-07-15/russia-plans-to-thwart-sale-of-foreign-bank-units-amid-sanctions).
  • Russia Sanctions Members of Japan’s Parliament: On Friday, the Russian Foreign Ministry released a statement saying the country had imposed sanctions against 384 Japanese lawmakers for taking “unfriendly, anti-Russian position[s].” (https://www.reuters.com/world/russia-sanctions-384-japanese-lawmakers-2022-07-15/).
  • Russia Welcomes U.S. Sanctions Clarification: The U.S. Treasury issued a clarification Thursday reassuring companies that transactions involving food and fertilizer exports would not run afoul of U.S. sanctions on Russia shortly after Russia, Ukraine, Turkey and U.N. officials met to discuss a deal that would resume Ukraine’s grain exports. The head of the Russian Union of Grain Exporters, Eduard Zernin, described the U.S. move as “an act of goodwill” and hoped that other countries would follow the lead. (https://www.rferl.org/a/russia-sanctions-fertilizer-grain-exports-clarification/31944494.html).
  • Putin Signs Laws to Support Russian Military Operations: On Thursday, Russian President Vladimir Putin signed a law expanding governmental measures to support military operations and counter-terrorism units abroad. The law provides the Russian government with power to introduce special economic measures. The measures includes the “unlocking of state reserve assets, [and] temporary engagement of mobilization capacities and facilities.” (https://tass.com/politics/1480021).
  • President Zelenskyy Urges Labeling of Russia as Terrorist State: On Thursday, Ukraine President Volodymyr Zelenskyy addressed the public and once again urged other countries to recognize Russia as a terrorist state. He stated the latest missile attacks in Vinnytsia as acts of terror under international law. He called for a Special Tribunal on Russian aggression as soon as possible, and the creation of a victim compensation fund. (https://www.president.gov.ua/en/news/cej-den-ukotre-doviv-sho-rosiya-maye-buti-viznana-derzhavoyu-76493).
  • Russia Bans News Outlet Bellingcat as a Security Threat: On Friday, Russia banned the investigative news outlet Belingcat and its local partner from operations, citing it as a “security threat” and placing it on the “undesirable list.” The Netherlands-based outlet was responsible for major news stories exposing Russian activities in Ukraine in 2014 and 2020. Bellingcat founder Eliot Higgins responded on Twitter: “Bellingcat has no legal, financial or staff presence (in Russia), so it’s unclear how Russia expects to enforce this.” (https://www.reuters.com/world/europe/russia-bans-news-outlet-bellingcat-labels-it-security-threat-2022-07-15/).
  • Russia Investigating New Oil Benchmark: Bloomberg reported on Friday that the Russian government has made a plan to create a national oil benchmark next year. Russian ministries, in coordination with domestic oil producers and the central bank, are working on a national oil trading platform expected to launch in October; this platform will be the basis for the benchmark. (https://www.bloomberg.com/news/articles/2022-07-14/russia-aims-to-take-control-of-oil-pricing-by-creating-benchmark).

UPDATE:

July 14, 2022

UPDATE:

July 12, 2022

  • Russia Holds 400 Planes Leased From Foreign Companies: A TuesdayWashington Post article states that Russia is currently refusing to return over 400 airplanes and myriad aircraft parts to western leasing companies. This has led to some countries taking action to ground Russian flights on jets owned by these western leasing companies, which has sparked diplomatic rows between Russia and the grounding countries. As sanctions on Russian continue, such disputes may become more common. (https://www.washingtonpost.com/business/2022/07/12/russia-aircraft-seizure-sri-lanka/_).

  • Zelensky Expresses Concern over Nord Stream Turbine: On Tuesday, Ukrainian President Volodymyr Zelenskyy released a video criticizing Canada for providing a sanctioned turbine to Russia, calling the return of the turbine an “absolutely unacceptable” for Canada to do. He further noted that “the decision on the exception to sanctions will be perceived in Moscow exclusively as a manifestation of weakness.” Finally, he suggested that this decision will embolden Russia and its noncompliance with international norms in the energy sector. (https://www.ukrinform.net/rubric-polytics/3526943-russia-to-see-sanctions-exemption-as-weakness-zelensky.html).

  • Russian Legislation on Overtime, Defense Contracts Stalls in Upper House: The lower chamber of the Russian legislature has already passed two bills intended to ease shortages in the Russian defense sector as a result of sanctions: one would obligate Russian companies to carry out defense contracts, while another would require specialized employees to work overtime in sensitive sectors. Both bills are waiting for ratification in the upper house of parliament. The Russian government is also actively recruiting new workers in the defense and construction sectors to rebuild from the war effort. (https://www.cbc.ca/news/world/russia-parliament-laws-military-1.6517083).

  • Report: Russian Car Purchases to Decline by 28 Percent: According to a report from Trust Technologies, sales of new passenger cars in Russia is set to decline by 28 percent in 2022. More pessimistic forecasts in the report project declines as high as 50 percent. Trust Technologies was part of the PwC audit network, but continues to work in Russia under new branding. (https://tass.com/economy/1478583).
  • Russia to Stop Using European Arm Aboard International Space Station: On Tuesday, the CEO of Russia’s state space corporation Roscosmos Dmitry Rogozin said that, in response to the European Space Agency’s refusal to cooperate with Russia on the ExoMars project, Russian astronauts will stop using the European ERA manipulator arm on the International Space Station. (https://tass.com/science/1479135).
  • Russian Jewish Oligarchs Emerge as Sanctions Target: The Jewish telegraphic Agency identified 18 Jewish Russian oligarchs in March who are likely targets of sanctions, that are together worth over $120 billion; 15 of them are now subject to western sanctions in some capacity. While some have been insulated from consequences by speaking out against the war, others are continuing to have their assets frozen and their planes grounded. These restrictions may impact Jewish charitable giving in 2022. (https://www.timesofisrael.com/with-their-planes-grounded-russias-jewish-oligarchs-see-consequences-of-putin-ties/).

UPDATE:

July 11, 2022

  • Ukraine “Disappointed” by Canadian Decision to Send Turbine to Nord Stream Pipeline: In a Sunday statement, the Ukrainian Foreign Ministry said that it was “deeply disappointed” by the Canadian government’s decision to send a sanctioned turbine to Russia to repair the Nord Stream pipeline. The Ministry added the decision sets a “dangerous precedent” and will “strengthen Moscow’s sense of impunity.” It claimed that Russia was artificially reducing gas flows through the Nord Stream pipeline, noting that turbines other than the damaged one were shut off during recent periods of reduced flow of natural gas from Russia to Europe through the pipeline. (https://www.rferl.org/a/canada-sanctions-russia-germany/31936742.html).

  • Putin, Lukashenko Discuss Response to Kaliningrad Restrictions: On Monday, Russian President Vladimir Putin met with Belarusian President Alexander Lukashenko to discuss a possible joint response to Lithuania’s transit blockade on goods to the Russian enclave of Kaliningrad. Details of these “possible joint steps” were not provided. (https://tass.com/politics/1478239).

  • Putin Expands Path to Russian Citizenship in Occupied Territories of Ukraine: On Monday, Russian President Vladimir Putin signed a decree offering a simplified path to Russian citizenship for individuals living in occupied territories of Ukraine. The new process allows Ukrainians to get Russian passports without passing a language exam or demonstrating adequate funds to sustain themselves, requirements for other applicants. (https://www.nytimes.com/2022/07/11/world/europe/putin-russian-citizenship-ukrainians.html).

UPDATE:

July 08, 2022

  • Russian Foreign Minister Walks Out of G20 Talks, Denies Russia is Causing Food Crisis: At the G20 meeting in Bali, Indonesia on Friday, Turkey and the UN attempted to persuade Russia to allow the export of stockpiles of Ukrainian grain through an independently policed safe naval corridor in the Black Sea. The efforts have been unsuccessful, and Russian Foreign Minister Sergei Lavrov denied that these restrictions were contributing to the broader global grain shortage. Lavrov accused the West of frenzied criticism over Russia’s invasion of Ukraine, and eventually walked out of G20 meetings. (https://www.theguardian.com/world/2022/jul/08/lavrov-leaves-g20-talks-early-denying-russia-causing-food-crisis).

  • Ukraine Urges Canada Not to Hand Over Gas Turbine to Russia: A Ukrainian energy official told Reuters on Thursday that Ukraine opposes Canada handing over a turbine to Russia’s state-controlled Gazprom, as the move would contravene sanctions on Russia. Gazprom has reduced oil shipments through the Nord Stream I pipeline due to the sanctioned turbine, which German officials fear will cause an energy crisis in the country. (https://www.reuters.com/world/exclusive-ukraine-urges-canada-not-hand-over-gas-turbine-russia-2022-07-07/).

  • Russia Says it Will Boost Gas Supply to Europe if Canada Provides Turbine: On Friday, Kremlin Spokesman Dmitry Peskov said Russia would increase gas supplies to Europe through the Nord Stream I pipeline if Canada provided a sanctioned turbine. Peskov denied that Russia was using the pipeline as a political statement against sanctions. (https://indianexpress.com/article/world/russia-boost-gas-supply-to-europe-8017365/). 

UPDATE:

July 07, 2022

  • New Russian Legislation Addresses Sanctions-Fueled Shortages: This week, the Russian Duma has introduced legislation that would address the impact of sanctions on several sectors of the Russian economy. One of the bills will allow the government to obligate private businesses to fulfil state defense contracts, though this is primarily targeted at companies that already serve the Russian defense sector. The second bill increases Russian government control over the workforce, which will compel specialists in critical sectors to work extended hours, though they will receive overtime. In debate on the bills, Russian Deputy Prime Minister Yuri Borisov said, “[t]he burden on the Russian defense-industrial complex has increased significantly… In order to guarantee the supply of arms and ammunition it is necessary to optimize the work of the defense-industrial complex and enterprises working in co-operation with the defense industry.” (https://www.ft.com/content/fe233252-69fa-4259-8b35-a34d8738b968).

  • McFaul-Yermak Sanctions Plan Already 55% Implemented: According to Andriy Yermak, Head of the Office of the President of Ukraine, the Sanctions Action Plan issued by the McFaul-Yermak Group on strengthening sanctions against the Russian Federation is currently 55% implemented. Russian gold imports are going to be sanctioned, and there are plans for price caps on Russian oil, cutting off Russian banks, and a gas embargo. (https://www.ukrinform.net/rubric-polytics/3523865-mcfaulyermak-sanctions-plan-already-55-implemented.html).

  • Western Sanctions Hurting Russia’s Plastic Surgery Industry: As supplies of products such as botox and breast implants are largely imported from countries such as the United States and Germany, Russian plastic surgeons are experiencing a shortage of these supplies. Though the Western sanctions do not target the supply of implants directly, the disrupted logistics and other factors are impacting plastic surgery operations. In addition to the shortage of medical equipment, Russian plastic surgeons are reporting that they are seeing fewer clients due to economic uncertainty. (https://www.france24.com/en/live-news/20220707-russia-s-plastic-surgery-sector-feels-pinch-from-western-sanctions).

  • Russian Government Plane Forced to Take Creative Route to Switzerland: On Wednesday, a Russian government aircraft needed to take a nine-hour route to fly between Moscow and Basel, Switzerland, a trip that normally takes three hours. The trip demonstrates the impact that airspace closures are having on Russian airplane traffic. (https://news.yahoo.com/russian-aircraft-flew-6-additional-195012994.html).

UPDATE:

July 07, 2022

  • Russia Shuts Down Terminal after Kazakhstan Offers to Send More Oil to the EU: According to press reports, a Russian court has temporarily shut down the Caspian Pipeline Consortium’s (CPC) oil terminal at Novorossiysk over “environmental concerns” in a closure that will last 30 days. While closures of the Novorossiysk terminal are frequent, the Russian court’s decision comes two days after a telephone conversation between EU officials and Kazakh officials, where Kazakhstan offered to send more oil to the EU. Kazakhstan annually supplies 67 million tons of oil through Russia to Europe. (https://www.euractiv.com/section/central-asia/news/russia-shuts-down-terminal-after-kazakhstan-offers-to-send-more-oil-to-the-eu/).

  • Russia to Begin Domestic Lithium Mining: On Wednesday, Resource World reported that Vladislav Demidov, Deputy Director of the Department of Metallurgy and Materials of the Russian Ministry of Industry and Trade, confirmed that Russia was looking to explore domestic lithium mining projects. The country has significant domestic lithium reserves, but has not explored them as of yet, instead relying on cheap imports. As other countries impose sanctions, sourcing these imports has gotten more difficult. (https://resourceworld.com/russia-ready-to-resume-domestic-lithium-mining-as-sanctions-bite/).

  • Ukraine War Impacts Major Russian Tech Startup: The Washington Post reported on Wednesday that Yandex, a major tech startup known for search and ride-hailing functions, has dropped in value from $31 billion before the war in Ukraine to under $7 billion today as western investors left Russia. The company used to employ 18,000 people, as well. While the company is not facing insolvency, its sudden change of fortune serves as a cautionary tale for the Russian economy and investment climate. (https://www.nytimes.com/2022/07/06/world/europe/ukraine-russia-yandex-google.html).

  • Russian Gold Producer Polymetal Abandons Russian Facility: Before the recent conflicts, Polymetal, one of Russia’s largest gold producers, planned to build a $730 million plant on the outskirts of the Sovetsky Gan, but Polymetal announced in April that it had “indefinitely suspended” development, continuing a trend of delaying plants in eastern Russia. Financial sector and technology sanctions have made production more difficult, rendering the future of economically depressed cities like Sovetsky Gan more uncertain. (https://www.rferl.org/a/russia-far-east-investment-sanctions/31932039.html).

UPDATE:

June 29, 2022

  • Strong Ruble Could Hurt Russian Businesses: As the ruble strengthens to levels not seen in seven years, Russia’s Minister of Economic Development Maxim Reshetnikov warned that the country’s businesses could suffer if the trends persist. Reshetnikov was quoted saying, “If such a situation will last for several more months, I think many enterprises may come to the idea not only curtailing investment processes, but also of the need to adjust current production plans and reduce production volumes.” (https://www.ctvnews.ca/business/strong-ruble-could-hurt-russian-businesses-official-warns-1.5967750).

  • Ukrainian Railways Raises Tariffs for Freight Transportation: The Ministry of Infrastructure of Ukraine agreed with Ukrainian Railways’ proposal to increase its tariff on cargo transportation by 70 percent. Due to the tariff increase, the state railroad company plans to generate an additional UAH 11B of revenue by the end of 2022. The extra income will be able to cover some of the estimated costs of repairing war damage that exceed UAH 100B ($3.1B). (https://ubn.news/ukrainian-railways-raises-tariffs-for-freight-transportation-by-70/).

  • Russia Threatens Retaliation against Norway over Access to Arctic Islands: Russia stated that restrictions imposed by Norway were blocking goods for Russian-populated settlements on the Arctic archipelago of Svalbard, and threatened unspecified “retaliatory measures” unless Oslo resolves the issue. The Russian foreign ministry said that it had summoned Norway’s chargé d’affaires to protest against the restrictions, which it said have disrupted the delivery of critical supplies, including food and medical equipment. (https://www.reuters.com/world/europe/russia-threatens-retaliation-against-norway-over-access-arctic-islands-2022-06-29/).

  • Russia Ready to Export Tens of Millions of Tons of Grain: Russia is not preventing the export of grain from Ukraine and is ready to export tens of millions of tons of grain if the West stops blocking food supplies, according to Russian Foreign Ministry Spokeswoman Maria Zakharova. According to various estimates, 20 to 25 million tons of wheat were blocked from being exported in Ukraine. (https://tass.com/economy/1473173).

  • Anti-Russian Sanctions Spur Global Food Crisis, According to Russian Ambassador: Russian Ambassador to the US Anatoly Antonov stated, “As to the food security, it was the wave of anti-Russian restrictions, imposed by the US-led collective West, that spurred the global food crisis. Its root causes are incompetent macroeconomic steps taken by a number of developed nations, climate change and the COVID-19 pandemic.” (https://tass.com/economy/1472973).

  •  Russian-Backed Government to Hold Referendum in Southern Ukraine: A senior Russian-backed official installed to run the southern region of Kherson in Ukraine said the authorities there are preparing for a referendum to join the Russian Federation. Kirill Stremousov, deputy head of the military-civilian administration of the Kherson region, stated, “It [Kherson] will become a full-fledged entity that can be like one single state in which the peoples of Russia live like one family.” About 45 percent of the pre-invasion population has left the region, according to Ukrainian officials. (https://edition.cnn.com/europe/live-news/russia-ukraine-war-news-06-29-22/h_63f67c64cf24134b526e03df6106f28b).

  •  Ukrainian President Asks for Russia to be Removed as Permanent Member of UN Security Council: President Zelenskyy addressed the UN Security Council listing all the Russian attacks on Ukraine within the past week and noting that the UN does not yet have a definition for the term “terrorist state.” He finished this speech by asking the UNSC to expel Russia from the body, stating, “Russia does not have the right to remain in the UNSC.” (https://edition.cnn.com/europe/live-news/russia-ukraine-war-news-06-28-22/h_0532d63656eaab554e6cd95ce484e17e).

  • Ukrainian President Accepts Invitation to Attend G20 Summit: Ukrainian President Volodymyr Zelenskyy accepted his personal invitation to attend the G20 summit in Bali in November, while his Indonesian counterpart Joko Widodo was in Kyiv. Zelensky went to say that Widodo’s visit was important to help stop the war, stating, “I consider our talks today to be an important step for strengthening global anti-war coalition of all the countries that can bring back and guarantee stability to the world.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-06-29-22/h_df2c62380fcb2117a8ff48df3e2e3ed7).

UPDATE:

June 28, 2022

  • Russian Industry Faces Crisis as IT Providers Pull Out: International sanctions and tensions over the war have forced industrial manufacturers to wind down operations in what was once one of their biggest markets. According to the Russian Steel Association, the steel industry alone has invested 3.2 trillion rubles ($59 billion) in the last two decades to rebuild capacity after its post-Soviet decline, with a majority spent on equipment supplied by foreign companies to increase the sector’s efficiency. Industrial and agricultural plants, businesses and government services are now potentially vulnerable to security breaches and viruses due to lack of replacement parts for software crashes. (https://finance.yahoo.com/news/russian-industry-faces-code-crisis-040000251.html).

  • Russia Fines United Parcel Service Over Data Storage: A Moscow court fined United Parcel Service (UPS) 1 million rubles ($18,900) for an alleged refusal to storage the data of Russian users on Russian territory, according to TASS news agency. UPS joined video streaming service Twitch, social network Pinterest, and holiday rental company Airbnb as the latest companies to be fined by Russia in their clash against Big Tech. (https://www.reuters.com/business/russia-fines-united-parcel-service-over-data-storage-tass-2022-06-28/).

  • Russian Duma Passes Bill Removing VAT on Digital Assets: On Tuesday, the Russian Duma passed a bill that would exempt digital asset sales from value added taxes in Russia. The bill also establishes income tax rates of 13 percent for Russian exchanges on the first 5 million rubles (currently about US$93,000) of their annual tax base, 15 percent on amounts above that limit and 15 percent across the board for foreign exchange operators; the current Russian company tax rate is 20 percent. The move is likely to attract digital asset exchanges and users as the country feels the impact of western sanctions. (https://cointelegraph.com/news/russian-duma-passes-bill-to-remove-vat-lower-income-tax-rates-on-digital-asset-sales).

UPDATE:

June 27, 2022

  • Russia Misses Key Bond Payment: Late Sunday night, Russia missed the deadline for an interest payment of an estimated $100 million dollars on its foreign currency sovereign debt. Bondholders still need to make a formal declaration of default, and Russia has preemptively declared any default declaration as “absolutely illegal.” (https://www.nytimes.com/live/2022/06/27/business/economy-news-inflation-stocks).

  • Zelenskyy Calls for Increased Sanctions in G7 Address: Speaking via video link to the G7 summit in Germany, Ukrainian President Volodymyr Zelenskyy called on the assembled world leaders to increase sanctions on Russia. His proposed limitations included a “forcible[] limit[] [on] the price of Russian oil exported,” designating Russia as a state sponsor of terrorism, and creating a global mechanism to seize and confiscate Russian assets. (https://www.president.gov.ua/en/news/volodimir-zelenskij-pid-chas-onlajn-uchasti-v-samiti-lideriv-76073).

  • Russia Plans To Hit Japan With Countermeasures: On Monday, in response to fresh Japanese sanctions, Russia promised to hit Japan with countermeasures. Sanctions are “short-sighted and harm Japan itself, especially the business community“, Ambassador Mikhail Galuzin said in a statement posted on the Russian embassy’s Facebook page. (https://www.channelnewsasia.com/world/russia-japan-sanctions-ukraine-invasion-2772961).

  • Putin To Participate in G20 Conference: Presidential Aide Yury Ushakov announced that Putin has accepted an invitation from Indonesia to participate in a summit meeting of the Group of 20. (https://tass.com/politics/1472071).

UPDATE:

June 24, 2022

  • Russia to Resume Art Exhibitions in “Friendly” Countries in 2023: On Friday, the Russian Culture Ministry announced that it would resume cooperation in art exhibitions with “friendly” countries beginning in 2023. The Ministry suspended the practice in March after the start of the conflict in Ukraine, and the Hermitage museum independently introduced a yearlong moratorium on exhibitions in the U.S. and Europe. (https://tass.com/society/1471097).

  • Russia Suspends Membership in the Finland-Russia Society: On Friday, the Russian Foreign Ministry announced that it had decided to terminate cooperation with the Finland-Russia Society, a Finnish NGO that promotes bilateral relations between the countries. The Ministry said that the decision was due to Finland’s “outspoken” opposition to Russia’s involvement in the conflict in Ukraine. (https://tass.com/society/1470819).

UPDATE:

June 17, 2022

  • Western Sanctions’ Impact of Russian Flights: On Friday, The New York Times published an interactive piece highlighting the impact of sanctions on flights predominately used by the Russian elite. The graphic demonstrates that Russian planes avoided EU airspace after the invasion of Ukraine, and increased flights to the Middle East and Central Asia. (https://www.nytimes.com/interactive/2022/06/17/world/europe/russia-private-jets.html).

UPDATE:

June 16, 2022

  • Russia Nearing Default Status: On Thursday, Bloomberg reported that holders of approximately $100 million in Russian debt have not yet received payment on their dollar and Euro-denominated debt. Russia has until June 26 to pay the debt; Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum that the Kremlin still intends to deliver dollar and euro payments to bondholders, though he did not elaborate on a timeline. (https://finance.yahoo.com/news/russia-struggling-100-million-debt-132637283.html).  

  • Russian Banks Struggling to Find Lawyers in US due to Sanctions: Bloomberg reported that Russian banks are struggling to find legal representation in the United States, as the banks struggle to find US financial institutions that will accept payment from Russia. As an example, a federal magistrate judge announced a stay in a pending case against VTB Bank until June 23, as VTB Bank negotiates with its counsel to find an acceptable payment program. (https://news.bloomberglaw.com/business-and-practice/vtb-bank-lawyers-cant-get-paid-because-of-russia-sanctions).

  • Sanctions Hinder Sovcomflot’s Ability to Pay Debt: Sovcomflot announced Thursday that its next payment on $498 million in debt has been “hindered” by EU and UK. Sovcomflot is pursuing a modification in payment terms that would allow it to meet its debt obligations. (https://tass.com/economy/1466203).

  • Sanctions Fail to Bring Russia to Negotiating Table: The Wall Street Journal reported on Thursday that allied sanctions on Russia have thus far failed to encourage negotiations to bring about a ceasefire in Ukraine. Analysts interviewed for the piece cited Russia’s current account surplus and high commodity prices as reasons why Russia has been able to maintain a somewhat stable economy despite the restrictions. In addition, Western governments are hesitant to impose sanctions on Russian energy products, which allows the Russian economy to persist, according to these analysts. (https://www.wsj.com/articles/sanctions-so-far-fail-to-dent-russias-war-effort-11655383912).

  • Russia Uses International North South Transport Corridor to Send Goods to India Despite Sanctions: Russia has begun sending goods to India via the International North South Transport Corridor (INSTC), a multimodal, cross-border freight network that links Russia to Central Asia, Iran and India, involving sea, rail and road links, to overcome sanctions-related challenges in doing business with traditional trade partners. (https://theloadstar.com/russia-uses-instc-corridor-to-beat-sanctions-and-drive-trade-with-iran-and-india/).

  • Central Bank Governor Confirms Russia Will Continue to Circulate Dollars and Euros: On the sidelines of the Saint Petersburg Economic Forum, Russian Central Bank Governor Elvira Nabiullina stated that Russia will continue to circulate dollars and Euros, though the Russian economy had been “pursuing the policy of de-dollarization… for many years.” (https://tass.com/economy/1465841).

  • Russia Announces Expanded Pickup of Mir Cards: At the Saint Petersburg Economic Forum, First Deputy Chairperson of the Bank of Russia Olga Skorobogatova stated that four more countries had agreed to adopt the Mir Card, a payment card issued by the Bank of Russia. She did not mention the countries; Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia and Abkhazia currently accept Mir Cards (https://tass.com/economy/1466295).

UPDATE:

June 15, 2022

  • Oil Production in Russia Grew in May Despite Sanctions: Despite an initial post-invasion reduction in production of crude oil and related liquids, in May, Russian output of crude oil and related liquids rose marginally, by about 130,000 barrels per day from April to 10.55 million barrels a day, according to the International Energy Agency. (https://www.nytimes.com/2022/06/15/business/russia-oil-sanctions.html).

  • Ukrainian Official Describes Russia as “More Resilient than Expected” with Regard to Sanctions: In an interview with Politico on Wednesday, Ukrainian Deputy Economy Minister Taras Kachka stated, “Russia seems to be more resilient to sanctions than we estimated at the beginning… Initially, there was an assumption that impacts [of] sanctions will be more and more visible.” He cited commodity sales as the reason for this resilience, and added that the West should use this as an opportunity to further restrict Russian oil and gas imports, as well as other commodities, like steel. (https://www.politico.eu/article/ukraine-says-russia-more-resilient-to-sanctions-than-expected/).  

UPDATE:

June 14, 2022

  • Russia Bans 29 British Journalists and 20 Defence Figures: On June 14, 2022, Russia’s foreign ministry announced that it was banning 29 journalists and members of British media organisations such as the BBC, Sky News, the Guardian and The Times from entering Russia. Another 20 British figures who Moscow said were linked to the defence industry were also banned from entering Russia.  (https://www.reuters.com/world/uk/russia-bans-29-british-journalists-entering-2022-06-14/).

  • Moscow Exchange Suspends Swiss Franc Trading After New Sanctions: The Moscow Exchange said Tuesday that it would suspend trading of the Swiss franc against the ruble and the U.S. Dollar after Switzerland adopted new EU sanctions against Russia. In a statement, the Exchange noted that, “The suspension of operations is due to difficulties conducting settlements in Swiss francs faced by market participants and the financial sector in connection with the restrictive measures imposed by Switzerland on June 10.” (https://www.reuters.com/markets/currencies/moscow-exchange-suspends-swiss-franc-trading-after-new-sanctions-2022-06-14/).

  • Russia Sanctions Leave Nord Stream Turbine Stranded Abroad: Supply chain disruptions brought on by Western sanctions on Russia have left equipment key for the functioning of the Nord Stream gas pipeline stuck abroad. The Siemens Energy AG turbine is unable to return to Germany from Canada, where it had been sent for maintenance. A second turbine also due for maintenance now cannot be sent overseas as well. The subsea Nord Stream gas link, with a nameplate capacity of 55 billion cubic meters per year, is the key route for Russian gas to Germany. Flows via the pipeline will be curbed from its maximum capacity due to the technical issues at the Baltic Portovaya compressor station, according to Gazprom. (https://www.bloomberg.com/news/articles/2022-06-14/russian-sanctions-leave-nord-stream-turbine-stranded-in-canada?srnd=premium).

  • Ukraine President Addresses Singapore Shangri-La Dialogue: At a gathering of 575 delegates from 40 countries in Singapore on Saturday, Ukrainian President Zelenskyy addressed attendees, identifying the importance of international law, and warning that “Today’s example of Ukraine is the example for the whole world,” in what has been interpreted as a nod towards China. Other attendees, like Japanese Prime Minister Kishida, noted that “Ukraine today may be East Asia tomorrow.”  (https://www.washingtonpost.com/world/2022/06/14/shangri-la-dialogue-asia-china-ukraine-zelensky-singapore-taiwan-japan/).

  • Sanctions Force Russian Automaker to Forgo Airbags: Avtovaz, producer of the popular Lada brand automobile in Russia, has resumed production of its vehicles after the Russian government slashed safety regulations in response to supply chain shortages caused by sanctions. The new version of the Lada Granta will no longer feature airbags, an anti-lock braking system, electronic stability control, or emergency retraction locks on seat belts. It also fails the emissions standards adopted by most of Russia’s neighbors. (https://www.nbcnews.com/news/world/sanctions-force-russia-produce-popular-car-safety-features-even-kremli-rcna32863).

UPDATE:

June 13, 2022

  • Sanctions Protect Exiled Russian Bankers: On Sunday, The Wall Street Journal profiled several Russian bankers in exile in countries that have imposed sanctions. The Russian government previously launched lawsuits against these bankers, who have fallen out of favor with current Russian political leaders, in their countries in order to claw back funds allegedly held illegally, but these cases have recently been thrown out, as the award in favor of the Russian government would violate sanctions regimes in these countries. (https://www.wsj.com/articles/russia-is-after-these-ex-bankers-assets-but-sanctions-could-bail-them-out-11654976143).

UPDATE:

June 11, 2022

  • Zelenskyy Calls for Seventh Sanctions Package: During European Commission President Ursula Von Der Leyen’s visit to Kyiv on Saturday, Ukrainian President Volodymyr Zelenskyy called on the Union to implement a seventh sanctions package. He stated that this package should include “companies that are helping the Russian state in one way or another – whether in the military sphere or in suppressing democracy” and added that the EU should “completely eliminate Russian energy resources.” (https://news.yahoo.com/zelenskyy-asks-eu-seventh-package-133254210.html).

  • Russian Central Bank Chief Discusses Default, Secondary Sanctions in Press Conference: Speaking to the press after the Russian Central Bank’s board meeting on Friday, Central Bank Chief Elvira Nabiullina stated that Russia was able to pay its debts, saying it has ample reserves to pay sovereign obligations but is experiencing “technical challenges” in repaying sovereign debt in foreign currency. On secondary sanctions, she said that the risk remained, adding, “[t]he majority of companies involved in the foreign economic activity experience problems at present: this is the difficulty in establishing ties with new suppliers, in making payments, searching for new sales markets and delivery of goods along new routes.” (https://tass.com/economy/1463679; https://tass.com/economy/1463623).

  • Russian Aviation Authority Extends Flight Suspensions to Areas Near Ukraine: The Russian Federal Air Transport Agency announced on Saturday that flights to Anapa, Belgorod, Bryansk, Voronezh, Gelendzhik, Krasnodar, Kursk, Lipetsk, Rostov-on-Don, Simferopol and Elista would continue to be suspended through June 18. Flights to these airports, which are located near the Russia-Ukraine border, were suspended due to the conflict. The Agency proposed alternate routes through Sochi, Volgograd, Mineralnye Vody, Stavropol and Moscow. (https://tass.com/economy/1463829).

  • McDonalds Restaurants Set to Reopen Under New Management, Marketing: On Sunday, several McDonalds restaurant locations in Moscow will reopen under new management and branding. Much of the food will remain the same, since McDonalds’ Russian supply chains have shifted to domestic sources in recent years, an indication of the Russian economy’s ability to rebound in response to western sanctions. (https://www.nytimes.com/2022/06/10/world/europe/russia-economy-mcdonalds.html).

  • Russian Auto Industry Struggles to Source Parts: The Guardian reported on Saturday that Russian citizens are having difficulty sourcing parts for car repairs, describing a secondary market with prices for parts marked up 10 times over typical prices and dealers with month-long waiting lists for new parts. Automakers like Avtovaz are having difficulty in sourcing parts for new cars, as well, with semiconductor shortages forcing Avtovaz to furlough workers. (https://www.theguardian.com/world/2022/jun/11/the-return-of-banditry-russian-car-industry-buckles-under-sanctions).  

  • President Putin Signs Legislation Rendering ECHR Opinions Void in Russia After Withdrawal: On Saturday, Russian President Vladimir Putin signed legislation voiding all European Court of Human Rights (“ECHR”) opinions against Russia after March 15, 2022, the date the country withdrew from the human rights body. Compensation payments due from ECHR opinions are valid, as long as they are made in rubles to accounts in Russian banks, through January 2023. (https://tass.com/russia/1463889).

  • Domestic Demand for Russian-Made Sparkling Wine Increases: On Friday, Pavel Titov, the President of the Black Sea wine company Abrau-Durso told Bloomberg that he was seeing increased demand for Russian sparkling wine, and that his stockpiles were selling out quickly. Though foreign sanctions typically exclude food products, voluntary withdrawals of wine suppliers are forcing Russians to turn to domestic stock. TASS estimates that, if trends continue, shortages of sparkling wine may hit Russia for the holidays. (https://www.bloomberg.com/news/articles/2022-06-10/sanctions-may-leave-russia-short-of-bubbly-for-new-year).

UPDATE:

June 9, 2022

  • Ukraine Sanctions Russian Officials: Ukrainian President Volodymyr Zelenskyy signed a decreed Thursday imposing personal sanctions on 35 Russian officials, including President Vladimir Putin, Putin’s spokesman Dmitry Peskov, Prime Minister Mikhail Mishustin, and a number of other high ranking officials. Those sanctioned individuals are prohibited from entry into Ukraine, have had their visas and permits revoked, as well as all issued licenses and permits. They also block financial assets. Zelenskyy signed an additional decree imposing sanctions on 236 Russian universities and their leaders. (https://www.yahoo.com/news/zelenskyy-imposed-sanctions-putin-peskov-151413463.html).

UPDATE:

June 8, 2022

  • Russian Microchip Maker Considers Leaving Taiwan: Defense News reported on Wednesday that Russian microchip manufacturer MCST, which produces the Elbrus microchip, stated that it may remove its production line from Taiwan to Russia. Relations between Russia and Taiwan have deteriorated since the start of the war in Ukraine, and Russian Deputy Trade Minister Vasili Shpak said that Taiwan has stopped shipping microchips to Russia. Shpak said that the move would help boost Russian domestic production of microchips, if completed. (https://www.defensenews.com/industry/2022/06/08/russian-microchip-maker-eyes-taiwan-exit-in-response-to-sanctions/).

  • Bloomberg Investigation Reveals Changed Russian Trading Landscape: Though the Russian government is slowing data releases of late, Bloomberg is reporting that, based on an analysis of Russia’s major trading partners indicates that trade with “much of Europe has dried up,” and China is starting to reduce shipments of merchandise. However, Belarus’s exports to Russia are surging; its reported value of imports to Russia surpasses Germany’s reported imports to Russia, according to the analysis. (https://finance.yahoo.com/news/russia-topsy-turvy-world-where-040000655.html).

UPDATE:

June 7, 2022

  • Russia Expands Oil Exports from Major Eastern Report to Offset EU Ban: With demand surging from Asian buyers, Russia is set to ramp up oil exports from the port of Kozmino by around one fifth. Russia is also planning on sending an extra 80,000 bpd of East Siberia Pacific Ocean (ESPO) Blend Crude to Kozmino via rail from Meget, allowing Kozmino to increase overall loadings to roughly 900,000 bpd in the months ahead (up from 750,000 bpd so far this year). ESPO oil exports via Kozmino are projected to reach 880,000 bpd in July. (https://www.reuters.com/markets/commodities/exclusive-russia-hikes-oil-exports-major-eastern-port-help-offset-eu-ban-2022-06-07/).

  • Russia’s Sovereign Eurobond Payments Stuck at Euroclear: Bloomberg reported Tuesday that Russia’s latest sovereign Eurobond payments have been transferred from Russia’s National Settlement Depository to Euroclear Bank SA, but the cash is being held there for compliance reasons. Recent moves by the U.S. and EU to heighten their sanctions regimes have made it significantly more difficult for Russia to pay its debts, increasing the odds of default significantly. (https://www.bloomberg.com/news/articles/2022-06-07/russia-s-latest-eurobond-coupons-are-stuck-at-euroclear).

UPDATE:

June 6, 2022

  • Russia Alleges Mistreatment of its Journalists in the US, Threatens Retaliation: Speaking to assembled press in Moscow on Monday, Russian Foreign Ministry Spokeswoman Maria Zakharova claimed that the US was mistreating Russian journalists, denying them visas and interrogating them on entry. She added, “[i]f the U.S. government doesn’t lift all measures against the Russian media or imposes further sanctions, then exactly the same will be applied to you.” State Department Spokesman Ned Price denied her claims. (https://www.wsj.com/articles/russia-says-u-s-mistreats-its-journalists-threatens-retaliation-11654550998).

UPDATE:

June 4, 2022

  • Putin Discusses Options for Grain Exports: In an interview with Rossiya 1 TV, Russian President Vladimir Putin discussed options to export grain from Ukraine. He suggested that Ukraine could clear its seaports of mines and export through controlled ports, such as Berdyansk and Mariupol. Putin added that overland transport out of Ukraine is also possible, saying Belarus was the “most logical option”, but Western sanctions would need to be lifted on the country for this to occur. He criticized “short-sighted” Western sanctions, and noted that river transport was an option for Ukrainian grain exports. (https://tass.com/economy/1460605).

  • Zelenskyy Urges US Mayors to Cut Ties with Russian Cities: In a speech to the US Conference of Mayors, Ukrainian President Volodymyr Zelenskyy urged local officials to cut off “brotherhood” ties with Russian cities. He highlighted Chicago’s tie with Moscow, Jacksonville’s tie with Murmask, San Diego’s tie with Vladivostok, and Albany’s tie with Tula, among others. He asked, “[w]hat do these connections give you? Probably nothing. But they give Russia the opportunity to say that it is not isolated, even after beginning such a war.” (https://www.president.gov.ua/en/news/ne-dopomagajte-rosiyi-vipravdovuvati-sebe-j-ne-dozvolyajte-v-75589).

  • Lavrov Says Oil Sanctions Will Not Impact State Coffers: In an interview with Bosnian television on Saturday, Russian Foreign Minister Sergei Lavrov stated that Russia has “suffered no budgetary loss” as a result of energy sanctions from other nations, and added that the country expects “to significantly increase the profits from the export of our energy resources.” He stated that “[o]il, generally speaking, is not subject to politics, there is a demand for it…we have alternative sales markets, where we are already increasing sales.” (https://www.newsweek.com/russia-claims-sanctions-wont-hurt-energy-profits-expects-increase-1712877).  

  • Medvedev Criticizes Sanctions on Oligarchs’ Families: In a message on his Telegram channel, Deputy Chairman of the Russian Security Council and former Russian President Dmitry Medvedev criticized Western decisions to sanction family members of oligarchs and government officials, claiming they “are in no way capable of influencing their relatives.” (https://tass.com/politics/1460677).

  • Ukrainian Foreign Minister Criticizes French Calls to Avoid “Humiliating” Russia:On Saturday, Ukrainian Foreign Minister Dmytro Kuleba tweeted, “calls to avoid humiliation of Russia can only humiliate France and every other country that would call for it. Because it is Russia that humiliates itself. We all better focus on how to put Russia in its place. This will bring peace and save lives.” French President Emmanuel Macron has maintained communication with Russian President Vladimir Putin and called for a diplomatic solution that does not “humiliate” the country. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-06-04-22/h_1fef9aff71452480f62b4e5ee94e4329).   

     

UPDATE:

June 3, 2022

  • Putin Discusses Options for Grain Exports: In an interview with Rossiya 1 TV, Russian President Vladimir Putin discussed options to export grain from Ukraine. He suggested that Ukraine could clear its seaports of mines and export through controlled ports, such as Berdyansk and Mariupol. Putin added that overland transport out of Ukraine is also possible, saying Belarus was the “most logical option”, but Western sanctions would need to be lifted on the country for this to occur. He criticized “short-sighted” Western sanctions, and noted that river transport was an option for Ukrainian grain exports. (https://tass.com/economy/1460605).

  • Ukraine Declares Megabank Insolvent:  On Friday, Ukraine’s central bank declared Kharkiv-based Megabank, which counts Germany’s KfW, the European Bank For Reconstruction and Development and the International Finance Corporation as shareholders, insolvent. According to Ukrainian officials, Megabank’s net assets account for 0.5% of the banking sector’s total. (https://ukranews.com/en/news/860937-nbu-classifies-megabank-as-insolvent).  

UPDATE:

June 2, 2022

  • Export Controls Impact Russia’s Tech Industry:The Financial Times reported on the crippling effect that international restrictions on the supply of chips, semiconductors, and other hardware are having on Russia. Although Russia has several domestic chip manufacturers, it relies heavily on importing large quantities of finished semiconductors from foreign manufacturers, which is impacting the supply of products that rely on semiconductors, as well. (https://www.ft.com/content/caf2cd3c-1f42-4e4a-b24b-c0ed803a6245).

UPDATE:

June 1, 2022

  • Russia’s Central Bank Considering Cryptocurrency to Blunt Sanctions’ Impact:Reuters reported Tuesday that Russian Central Bank First Deputy Governor Ksenia Yudaeva said in a briefing with reporters that, “[i]n principle, we do not object to the use of cryptocurrency in international transactions.” She also noted that the bank views crypto with considerable skepticism, saying that “[w]e still believe that the active use of cryptocurrency within the country, especially within Russia’s financial infrastructure, creates risks for citizens and users. We believe that in our country those risks could be reasonably large.”  (https://www.reuters.com/article/ukraine-crisis-russia-cryptocurrency/russias-central-bank-sees-space-for-crypto-in-international-trade-idUSKBN2NH178).

  •  Lavrov Highlights the Importance of OPEC+:Reuters reported Wednesday that Russian Foreign Minister Sergei Lavrov told a news conference in Saudi Arabia that “[t]he principles of cooperation on th[e] basis [of OPEC+] retain their significance and relevance.” His comments come on the heels of a report in the Wall Street Journal Tuesday indicating that some members of OPEC were considering the suspension of Russian oil from the production deal it is set to approve Thursday. (https://www.reuters.com/article/oil-opec-russia-lavrov/russias-lavrov-says-opec-still-relevant-for-moscow-idUSS8N2WX05K).

  • Russian Duma Mulls New Plan to Remove Toxic Waste from Lake Baikal: Radio Free Europereported Wednesday that Russian authorities are considering a new plan to increase iron levels by a factor of 10, chromium levels by 1.3, and mercury by 13 in order to remove toxic waste from the former “pearl of Siberia,” Lake Baikal—a UNESCO-protected ecosystem that holds about 20% of the world’s fresh surface water. (https://www.rferl.org/a/russia-pushes-dangerous-cleanup-plan-lake-baikal/31877177.html).

  • Investors Determine “Failure to Pay Credit Event” has Occurred: Reuters reported Wednesday that a panel of investors on The EMEA Credit Derivatives Determinations Committee had voted “yes” on the question of whether Russia’s failure to pay $1.9 million in potential interest accrued between the maturing of its international 2022 bond on April 4 and its payment of principal and interest due at maturity was made on May 2 constituted a “credit event” that would permit investors to collect a payout on credit default swaps. The committee will reconvene to discuss the issue further Monday, June 6. (https://www.reuters.com/business/russia-failure-pay-credit-event-investor-committee-says-2022-06-01/).

  • Despite Western Sanctions Impact on Russian Business, Russia Continues to Benefit From Surging Commodity Prices:   Bloomberg reported Wednesday that the surge in commodity prices tied to its invasion of Ukraine and the imposition of sanctions by the U.S. and its allies have paradoxically been a boon to Russian energy, wheat, nickel, aluminum, and palladium exports, generating $800 million per day. Even as Europe halts and/or slows its energy purchases, Russia is projected to have $285 billion in revenues from oil and gas this year alone, exceeding its 2021 revenues by more than 1/5th.(https://www.bloomberg.com/news/features/2022-06-01/has-sanctioning-russia-worked-oil-gas-sales-put-285b-in-putin-s-pocket).

UPDATE:

May 31, 2022

  • Russia to Halt Board of Director Elections for Sanctioned Companies: Prime Minister Mikail Mishustin reportedly announced that the Russian government will permit sanctioned Russian companies to temporarily pause elections for their boards of directors. Additionally, the plan would preserve the powers of the current board without holding a reelection. (https://tass.com/economy/1458531).

UPDATE:

May 30, 2022

  • Russia Establishing New Avenue for Managing Bond Payments: Russian Finance Minister Anton Siluanov is reported to have stated that Russia will establish a system for bond payments similar to that for natural gas payments, after the US government let an authorization for such payments to lapse (although the EU has not announced such restrictions). Under the proposed system, investors would have to open both a foreign currency and ruble account at a Russian bank, provide instructions permitting in change, and then Russia would make bond payments in rubles which would be exchanged for the correct foreign currency for the benefit of the investor. (https://markets.businessinsider.com/news/bonds/russia-bond-payments-debt-default-us-sanctions-rubles-natural-gas-2022-5).

  • Hackers Release Customer Data Stolen from Sberbank: Amid claims of hacking by hacking collective Anonymous, major website outages, and a statement from Sberbank that it fought against the largest DDoS attack in its history on May 6, card details of 113,476 Sberbank customers are reported to be circulating on the dark web since the beginning of Russia’s invasion of Ukraine. (https://www.telegraph.co.uk/business/2022/05/29/hackers-wage-war-russias-largest-bank/)

  •  Central Bank of Russia to Launch Digital Ruble as Early as Next Year: Reporting in Forbes Russia quoting the Central Bank of Russia’s First Deputy Chairman Olga Skorobogatova stated that the CBR has decided to speed up the development of the digital version of the ruble in response to western sanctions, launching the pilot program with real transactions and users in April 2023 rather than in 2024. (https://news.bitcoin.com/bank-of-russia-steps-up-efforts-to-issue-digital-ruble-due-to-sanctions/).

UPDATE:

May 29, 2022

  • Ukraine Seizes Rosneft Assets in the Country: On Saturday, the Ukrainian Security Service posted on its Telegram channel that it had initiated seizure of Russian company Rosneft’s assets currently located in Ukraine. Rosneft’s license to provide electricity in Ukraine had previously been suspended, and its 20 million hryvnia of assets in Ukraine had already been frozen. (https://tass.com/world/1457279).

  • Ukrainian Orthodox Church Branch Breaks Ties with Russia Over War: The Ukrainian Orthodox Church-Moscow Patriarchate, an eastern branch of Ukraine’s Orthodox Church that remained loyal to Moscow after a 2019 schism permitted Ukrainian Orthodox Churches to separate from the Russian Orthodox Church, has said it will break with the Russian church over the country’s invasion of Ukraine. Ukrainian Orthodox leadership stated that it has sought “full independence” from the Russian Orthodox Church. (https://www.reuters.com/world/europe/moscow-led-ukrainian-orthodox-church-breaks-ties-with-russia-2022-05-28/).

UPDATE:

May 27, 2022

  • Russia Eases Currency Restrictions on Oil and Gas Payments for “Reliable Partners”: Speaking on Friday, Russian President Vladimir Putin stated, “we are extending the practice of payments [for energy products] in the national currencies for those countries that have proven themselves as reliable partners for Russia.” Russia is pushing “unfriendly” countries to pay for oil and gas shipments in rubles. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-27-22/h_.4e4d424ccf1883892eedc1b6ea33eed5).  

  • Ukraine Asks Germany to Reduce Shipments through Nord Stream I Pipeline: In a televised address on Friday, Serhiy Makogon, the head of Ukraine’s gas system operator called on Germany to severely curtail its shipments through Nord Stream I. He noted that Ukraine had formally sent a letter to Germany arguing that the pipeline is allowed under German law so long as it contributes to the strengthening of the security of gas supplies to Europe, but, as recent shutoffs show, Russia has violated these principles. (https://www.reuters.com/business/energy/ukraine-demands-germany-cut-or-halt-nord-stream-1-gas-flows-2022-05-27/).

  • Small Trading Firms Help Export Russian Oil: The Wall Street Journal reported on Friday that smaller trading firms, like Paramount Energy & Commodities SA and Coral Energy Pte, are quickly expanding their trades in Russian oil as major traders like Trafigura, Vitol, Glencore, and Gunvor Group withdraw from the Russian market. These trades do not violate western sanctions on Russia; recent EU restrictions on trades with state-owned Rosneft inspired large traders to withdraw from the market entirely, and smaller firms picked up the slack. (https://www.wsj.com/articles/little-known-commodity-traders-help-russia-sell-oil-11653643583?mod=livecoverage_web).

  • Russian Finance Minister Denies Allegations of Default: On Friday, Russian Finance Minister Anton Siluanov stated, “current statements about the default are out of touch [with the reality] at all. This is the default of Western countries before themselves. We have money. I reiterate we will make payments.” As the US blocked Russia’s ability to make interest payments to American banks, Russia is more likely to default on its debt. (https://tass.com/economy/1457065).

UPDATE:

May 26, 2022

  • Russian Supply Shortages of Western Goods Worsen: Building on previous reports of shortages in the aviation sector, Russian logistics officers are reporting widespread shortages of western goods, according to reporting from The Washington Post. As sanctions and individual business withdrawals reduce the amount of western goods for sale in the country, Russian companies are picking up the slack, but logistics officers state that the quality is reduced particularly for the price. (https://www.washingtonpost.com/world/2022/05/26/russia-economy-aviation-sanctions-shortages/).

  • Ukraine Urges Tech Companies to Leave Russia: In an interview at the World Economic Forum on Wednesday, Ukrainian Technology Minister Mykhailo Fedorov, Ukraine’s Minster of Digital Transformation, called out tech firms Cloudflare and SAP for continuing operations in Russia. He praised tech companies that have already departed Russia, and is “convinced eventually that they will leave Russia, sooner or later.” (https://www.cnn.com/2022/05/25/business/ukraine-tech-companies-davos/index.html).

UPDATE:

May 25, 2022

  • Insurance Restrictions May Impact Russian Oil Market: On Wednesday, Reuters reported that, despite Russia’s ability to withstand energy sector sanctions thus far, upcoming restrictions from western insurance companies, which dominate the oil shipping insurance market, may prove more difficult to overcome. The restrictions will fully come into place in June and July, when EU restrictions on insurance fully expire. Even if insurance companies in countries sympathetic to Russia fill the gap, their own insurers may increase their premiums for dealing with a sanctioned entity. (https://www.reuters.com/markets/commodities/russian-oils-achilles-heel-insurance-2022-05-25/).

UPDATE:

May 24, 2022

  • Russian Parliament Advances Press Censorship Bill: On Tuesday, the State Duma advanced a bill that would give the Russian Prosecutor General’s office the power to invalidate the registration and revoke the license of media outlets through request to the state media regulator if the media company publishes “illegal, dangerous information by the media and the broadcaster, including unreliable socially significant information.” Currently, media outlets may only be shut down by court order. The legislation now must go through two more readings in the Duma before moving to the Federation Council and President Putin’s desk, steps that are considered formalities.  (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-24/card/russia-moves-forward-with-media-censorship-bill-EIkbbY0VtPHaRDCq6LI0).  

  • Russian Foreign Minister Calls for Deeper Ties with China: Speaking on Tuesday, Russian Foreign Minister Sergei Lavrov said that Russia needs to stop being dependent in any way on suppliers from the west, adding that the recent sanctions imply “our economic ties with China will grow even faster.” He stated, “When we can finally count only on ourselves and on countries which have proven themselves reliable and do not dance to someone else’s tune, then if Western countries come to their senses and begin to propose some form of cooperation, it will be up to us to decide.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-24-22/h_b48afc213ddbb2ff3042522644d73bef).

UPDATE:

May 23, 2022

  • Zelenskyy Calls for “Maximum Sanctions” at Davos: On Monday, Ukrainian President Volodymyr Zelenskyy delivered a virtual address at the World Economic Forum in Davos, Switzerland. The President called for “maximum” sanctions on Russia, which included an oil embargo, blocking all Russian banks, and cutting off trade with Russia completely. He also advocated for the complete withdrawal of foreign companies from Russia, and asked for $5 billion per month in funding to support the Ukrainian economy. (https://www.latimes.com/world-nation/story/2022-05-23/ukraine-zelensky-urges-maximum-sanctions-russia-davos).

  • Ukraine, Poland Announce Joint Customs Control: On Sunday evening, Ukrainian President Volodymyr Zelenskyy announced that the country had established a joint border customs control arrangement with Poland. The move comes after Polish President Andrzej Duda visited Kyiv over the weekend and expressed willingness to develop closer ties between the countries. The arrangement is intended to streamline entry and exit procedures for goods and persons between the countries; Poland is a major destination for refugees from the conflict. (https://www.reuters.com/world/europe/ukraine-poland-agree-joint-customs-control-ease-movement-people-goods-2022-05-23/).

  • Sovcomflot Sells One Sixth of Fleet to Repay Debts: Russia’s biggest shipping group, Sovcomflot, and its western lenders have sold a sixth of its Kremlin-owned fleet as part of plans to repay debts and eventually return to international markets once sanctions are lifted. The asset sale comes as energy executives warn Russia’s oil and tanker industry will increasingly resemble Iran and Venezuela, which rely on a “dark fleet” of vessels operating outside international markets. These ships turn off location signals, register under false flags and use shell companies. (https://www.ft.com/content/31b80bbb-59f3-4d7a-b901-329867797d41).

  • Putin Says Russia “Withstanding” Sanctions: In a meeting with Belarusian President Alexander Lukashenko in Sochi, Russia, Russian President Vladimir Putin stated “the Russian economy is withstanding the impact of the sanctions, and withstanding it quite well,” according to macroeconomic indicators. GDP estimates widely predict that the Russian economy will contract in the near future due to sanctions. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-23-22/h_459a18ff68a5eb1a1841b04d6865d651).

UPDATE:

May 22, 2022

  • Russian Foreign Ministry Publishes Full List of Americans Banned from Traveling to Russia, Adds Canadian Officials to List: On Saturday, the Russian Foreign Ministry announced for the first time the entire list of 963 Americans banned from traveling to Russia. The list confirms that US diplomatic and military personnel, like Secretary of State Antony Blinken, Defense Secretary Lloyd Austin and CIA chief William Burns, but also includes actor Morgan Freeman and journalists Susan Glasser of the New Yorker, Bret Stephens of the New York Times, David Ignatius of the Washington Post and Nick Paton Walsh of CNN for “inciting Russophobia”. The Ministry also announced the addition of 26 Canadians to the travel ban list, including Sophie Gregoire Trudeau, wife of Canadian Prime Minister Justin Trudeau. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-21/card/russia-bans-entry-to-nearly-1-000-americans-UgPN8GHGy7ZS8d7p9RUi).  

  • Sanctions Impacting Aeroflot Repairs:Bloomberg reported on Sunday that Aeroflot, Russia’s flag carrier, is experiencing difficulty in sourcing parts for its planes, many of which are manufactured by US company Boeing and EU company Airbus. Sanctions from the EU and US are blocking these companies from supplying the Russian airline, and it is struggling to shift to a domestically-made, primarily domestic-serving model. Bloomberg reports that the company has enough supplies to repair its Boeing and Airbus planes for three more months before it must start “cannibalizing” other Airbus and Boeing jets for their parts. (https://www.bloomberg.com/news/articles/2022-05-22/aeroflot-is-back-to-the-future-as-sanctions-ground-its-ambitions).

  • Russian Transportation Secretary Says Sanctions Have “Practically Broken All” Trading Corridors: Speaking to industry representatives during a visit to the Astrakhan region, Russian Transportation Secretary Vitaly Savelyev said, “The sanctions that have been imposed on the Russian Federation today have practically broken all logistics [corridors] in our country. And we are forced to look for new logistics corridors together.” He added that the country is exploring options along the International North–South Transport (INSTC) corridor, which links India with central Asian countries. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-21-22/h_b135cf557a352152f3a0f501193db208).

  • Moody’s Downgrades Ukraine Credit Rating: On Friday, Moody’s downgraded Ukraine’s credit rating to Caa3, which indicates that the agency expects a recovery in the event of default of typically between 65 percent to 80 percent. In a statement, the agency said, “While Ukraine is benefitting from large commitments of international financial support, helping to mitigate immediate liquidity risks, the resulting significant rise in government debt is likely to prove unsustainable over the medium term,” especially as the military conflict continues. (https://www.bloomberg.com/news/articles/2022-05-20/moody-s-downgrades-ukraine-as-drawn-out-war-raises-debt-risks).

  • Ukrainian Presidential Advisor Responds to Russian Comments on Sanctions Review for Food Exports: Speaking on Sunday, Ukrainian Presidential Advisor Mykhailo Podolyak responded to recent reports that Russia would end its blockade of Ukraine’s Black Sea ports if the international community undertook a “review” of sanctions on Russia. He opposed the Russian suggestion, saying, “If you follow the lead in Russia by lifting some of the sanctions, they will continue to escalate the conflict in Ukraine and will set new conditions.” (https://news.yahoo.com/zelenskys-office-comments-possible-lifting-143500916.html).  

UPDATE:

May 20, 2022

  • EU Nationals Resign from Rosneft Board: In addition to the Vice President resignations reported yesterday, Rosneft announced on Friday that two European members of its board of directors, former German Chancellor Gerhard Schroder and Matthias Waring, were resigning from their roles at the company. Schroder was the subject of an EU resolution calling on EU citizens to resign from board positions at major Russian companies, and he lost his office space in the German parliament building as a result of his ties to Russia this week. (https://www.wsj.com/articles/senior-executives-flee-russian-oil-giant-rosneft-11653041804?mod=hp_lead_pos3).

  • Former Russian President Expects Sanctions to Stay in Effect “For a Very Long Time”: Speaking to a government panel on Friday, former Russian President Dmitry Medvedev, now the deputy chairman of Russia’s security council, said that he expects the sanctions imposed on Russia to remain in effect “a very long time… the way it was in the past, including the Soviet era. In other words, for decades.” He urged Russia to rely entirely on its own resources as a result. (https://tass.com/world/1453977).

  • Russian Central Bank Releases GDP Estimates:On Friday, Kirill Tremasov, the head of the Russian Central Bank’s Monetary Policy Department, told a conference on Friday that the Bank expects Russian GDP to contract by 8 to 10 percent in 2022, 0 to 3 percent in 2023, and to grow by 2.5 to 3.5 percent in 2024. (https://tass.com/economy/1453927).

UPDATE:

May 19, 2022

  • Russia Pins Food Crisis on Foreign Sanctions: Speaking in response to calls from the UN to end the blockade on Ukraine’s Black Sea ports to allow agricultural exports, Russian Deputy Foreign Minister Andrei Rudenko said, “You have to not only appeal to the Russian Federation but also look deeply at the whole complex of reasons that caused the current food crisis and, in the first instance, these are the sanctions that have been imposed against Russia by the U.S. and the EU that interfere with normal free trade, encompassing food products including wheat, fertilisers and others.” (https://www.reuters.com/world/europe/moscow-says-opening-ukraine-ports-would-need-review-sanctions-russia-interfax-2022-05-19/).

  • Russian Economic Growth Slows More than Expected: The Russian Federal Statistics Service announced on Wednesday that the Russian economy grew by 3.5 percent in the first quarter, down from a 4 percent gain in the three preceding months. This result was below Bloomberg’s median forecast of economists, who expected the Russian economy to grow by 3.7 percent. Since this result reflects first quarter data, it only partially includes the invasion of Ukraine, which began on February 24, and subsequent sanctions. (https://www.bloomberg.com/news/articles/2022-05-18/russia-s-economy-slowed-down-more-than-expected-in-first-quarter).

  • Russian Deputy PM Claims Russian Oil Export Rebound: On Thursday, Russian Deputy Prime Minister Alexander Novak said that Russia is increasing oil production in May by 200,000 to 300,000 barrels per day, after a decline in April. He noted that, after receiving a “certain shock” related to is previous export partners, Russia “does not have serious problems” in the oil export industry, and the country is looking for new partners. (https://tass.com/economy/1453301).

UPDATE:

May 18, 2022

  • Google’s Russian Subsidiary Files for Bankruptcy; Company Moves Employees Out: On Wednesday, Google’s Russian subsidiary, Google LLC, submitted a notice of intent to declare bankruptcy to Russia’s Fedresurs agency. In a statement, Google said, “Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations.” The company has already paused most commercial operations in Russia, though free services like YouTube, gmail, and Maps, will remain unaffected. Sources at Google also confirmed that Google is moving its employees out of Russia, with most keeping their jobs and moving to Dubai, and the rest remaining in Russia and leaving the company.  (https://www.wsj.com/articles/google-subsidiary-in-russia-to-file-for-bankruptcy-11652876597?mod=livecoverage_web).  

  • Russia Takes First Steps to Withdraw from WTO and WHO: Russian State Duma Deputy Speaker Pyotr Tolstoy confirmed on Wednesday that the Foreign Ministry had sent a list of international organizations that “bring no benefit” to Russia; the Duma will “analyze them and… propose to withdraw.” Tolstoy added, “the next step is to withdraw from the WTO and the WHO, which have neglected all obligations towards our country.” (https://www.politico.eu/article/russia-takes-first-steps-to-withdraw-from-wto-who/).

  • Russia Expels Canadian Broadcaster: On Wednesday, the Russian government moved to close Canadian media company CBC’s Moscow bureau and strip its journalists of visas and accreditation. The move is seen as retaliation for Canada’s decision to remove RT and RT France from the list of non-Canadian programming services and stations authorized for distribution in Canada. CBC executives condemned the development and confirmed that the company would continue covering Russia from outside the country. (https://www.cbc.ca/news/world/russia-closes-cbc-bureau-1.6457668).

  • Soviet-Era Car Brand Returns at Former Renault Plant: The Mayor of Moscow announced on Wednesday that the previously defunct Soviet-era Moskvich car brand would be returning to production at a facility previously used by French automaker Renault. Renault announced the sale of its Russian business earlier this week. The Mayor added that Moskvich will attempt to retain as many employees from the previous facility as possible and source parts from Russian producers. (https://www.cnn.com/2022/05/17/business/renault-moskvich/index.html).

  • Russia Seized 113 Planes from Aircraft Leasing Company Post-Invasion: On Wednesday, AerCap Holdings, an aircraft leasing company that is the largest owner of jets in the world, stated on Wednesday that it lost 113 jets shortly after the invasion of Ukraine due to Russian government aircraft seizures. The company was able to recover 22 jets before they were seized, but still had to report a $2.7 billion pre-tax charge on its first quarter earnings statements. (https://www.cnn.com/2022/05/17/business/aercap-russian-planes-sanctions/index.html).

  • Analysts See Difficulties in Russian Energy Markets: Oil and gas industry analysts have reported frequent shutdowns and divestment from energy extraction projects in Russia, indicating that Russia will face difficulty in meeting its oil and natural gas extraction goals in the coming years, according to a New York Times report released on Wednesday. (https://www.nytimes.com/2022/05/18/business/russia-energy-oil-gazprom-lng.html).

  • International Gymnastics Federation Bans Russian Gymnast for 12 Months for Pro-War Symbol: On Wednesday, the International Gymnastics Federation banned Russian gymnast Ivan Kuliak from competition for one year after he wore a “Z” symbol, widely known as a signal of support of the Russian invasion of Ukraine, on the podium next to a Ukrainian gymnast at a meet in Qatar. Kuliak must also surrender his bronze medal and any prize money from the competition. (https://www.cnn.com/2022/05/18/sport/ivan-kuliak-banned-russian-gymnast-spt-intl/index.html).

UPDATE:

May 17, 2022

  • Putin Discusses Foreign Energy Sanctions in Industry Meeting: During a Tuesday meeting with representatives from the Russian energy industry, Russian President Vladimir Putin stated “European countries continue to introduce new sanctions on oil and gas markets. All of this is leading to inflation, but instead of admitting their own mistakes, they’re looking for someone to blame.” He added, “the Europeans recognize that they cannot completely give up on Russian energy resources.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-17-22/h_03a854fbe6d71633d70f78e96d17a81c).

  • Russia Reduces Regulatory Standards as Automakers Cease Operations in the Country:On Tuesday, Russia introduced a Presidential Decree that reduced regulatory requirements for cars produced in Russian territory. The new rules now permit the sale of cars without airbags, antilocking brakes, and seatbelt emergency locking retractors through February 1, 2023. The decree also reduces emissions standards. The move comes as major foreign automakers announced the suspension of operations in Russia. (https://www.cbsnews.com/news/russia-ukraine-war-sanctions-putin-safety-environmental-standards-cars-airbags/).

  • Russia Withdraws from Council of the Baltic Sea States: On Tuesday, the Russian government released a statement saying it was withdrawing from the Council of the Baltic Sea States (“CBSS”), saying, “NATO and EU states within the Council rejected the equal dialogue and the principles that this Baltic regional structure was created upon, and they gradually turn the council into an instrument of anti-Russian politics.” The move comes after Sweden and Finland announced their intent to join NATO. (https://tass.com/politics/1452051).

UPDATE:

May 16, 2022

  • New Russian Legislation Refuses to Fulfill EHCR Decisions Post-March 16: On Monday, members of both houses of Russian parliament introduced legislation stating that Russia would no longer be bound by European Court of Human Rights (“ECHR”) decisions issued after March 16, 2022. The bill also reportedly contains mechanisms “to ensure Russian citizens’ basic rights, freedoms and legitimate interests.” (https://tass.com/politics/1451633).

  • New York Times Profiles Challenges in Sanctioning Putin’s Family: On Monday, The New York Times released a profile of Vladimir Putin’s secretive family life and how it is impacting sanctions programs. The profile describes a fractured family life, with one dissolved marriage, one alleged mistress, two publicly identified daughters and four alleged children from other relationships; it notes that effectively sanctioning this complicated web of individuals and properties scattered across several countries is difficult. (https://www.nytimes.com/2022/05/13/world/europe/putin-family-wealth-sanctions.html). 

UPDATE:

May 15, 2022

UPDATE:

May 13, 2022

  • Russian Shipping Activity Still Strong, Despite Sanctions: According to shipping tracker Refinitiv, Russian crude oil shipments climbed to 25 million metric tons in April, up from 24 million metric tons in December. These trades are usually set well in advance via contract, which companies are attempting to not break. Tracking by Lloyds List Intelligence shows similar trends in bulk shipping. This situation may change as a result of possible EU energy sanctions. (https://www.nytimes.com/2022/05/13/business/economy/russia-shipping-sanctions.html).

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