What Are The Sanctions On Russia And Are They Hurting Its Economy?

Skip to content

• Home
• News
• Sport
• Business
• Technology
• Health
• Culture
• Arts
• Travel
• Earth
• Audio
• Video
• Live

HomeNewsSportBusinessTechnologyHealthCultureArtsTravelEarthAudioVideoLiveWeatherNewslettersWhat are the sanctions on Russia and have they affected its economy?23 February 2024ShareSaveShareSave

Getty Images

The US, UK and EU have announced new sanctions on Russia, two years after its invasion of Ukraine.

The measures also marked a week since the death in custody of opposition leader Alexei Navalny.

What are sanctions?

Sanctions are penalties imposed by one country on another, to stop them acting aggressively or breaking international law.

They are among the toughest measures nations can take, short of going to war.

What are the latest sanctions on Russia?

Announcing 500 new sanctions against Russia, US President Joe Biden said they would target Russia's war machine. Export restrictions will be imposed on nearly 100 firms or individuals.

President Biden said the measures would also target people connected with the imprisonment of Mr Navalny, who died in an Arctic penal camp.

The UK has frozen the assets of six bosses at the prison and banned them from travelling to the UK.

Getty Images

The UK has also imposed new bans on Russian metal, diamond and energy exports.

The EU has announced sanctions on 200 organisations and people which it says are helping Russia acquire weapons, or taking Ukrainian children from their homes.

The sanctions include companies and individuals involved in shipping North Korean armaments to Russia.

• Alexei Navalny: What we know about his death

What other sanctions have been imposed on Russia?

Since Russia's invasion of Ukraine in February 2022, the US, UK and EU, along with countries including Australia, Canada and Japan, have imposed more than 16,500 sanctions on Russia.

Their main target has been Russia's money.

Foreign currency reserves worth $350bn (£276bn) - about half its total reserves - were frozen.

About 70% of the assets of Russian banks were also frozen, the EU says, and some were excluded from Swift, a high-speed messaging service for financial institutions.

Western nations have also:

• banned exports of technology Russia might use for making weapons
• banned imports of gold and diamonds from Russia
• banned flights from Russia
• sanctioned oligarchs - the wealthy business people linked with the Kremlin - and impounded their yachts

Reuters

Russia's oil industry has been another major target.

The US and UK banned Russian oil and natural gas. The EU has banned seaborne crude imports.

The G7 - an organisation of the world's seven largest "advanced" economies - has imposed a maximum price of $60 (£47) a barrel on Russian crude oil, to try to reduce its earnings.

Which Western companies have left Russia?

Hundreds of major firms, including McDonald's, Coca-Cola, Starbucks and Heineken, have stopped selling and making goods in Russia.

However, some still do business in Russia.

PepsiCo, for example, has been accused of continuing to sell food products in Russia. And the BBC discovered that US cosmetics firm Avon was making goods in a factory near Moscow.

How has Russia evaded sanctions?

President Vladimir Putin has claimed European sanctions have done Russia no harm, saying: "We have growth, and they have decline."

Russia has managed to sell oil abroad for more than the G7's price cap, according to the Atlantic Council, a US think tank. It says a "shadow fleet" of about 1,000 tankers is used to ship it.

The International Energy Agency says Russia is still exporting 8.3 million barrels of oil a day - having increased supplies to India and China.

Russia is also able to import many sanctioned Western goods by buying them through countries such as Georgia, Belarus and Kazakhstan, according to researchers at King's College London.

China has been a vital supplier of alternative hi-tech products to those produced in the West, says Dr Maria Snegovaya from the US think tank, the Center for Strategic and International Studies.

"China sells it chips and other components it needs to for keep its military production going," she says. "Russia wouldn't be able to pull that off without China's help."

• Russian oil getting into UK via refinery loophole
• What support is China giving Russia?

What impact have sanctions had on Russia's economy?

In 2022, the first year of the war, Russia's economy shrank by 2.1%, according to the International Monetary Fund.

However, it estimates that Russia's economy grew by 2.2% in 2023 and predicts growth of 1.1% in 2024.

Nevertheless, the US Treasury claims sanctions are damaging Russia, having cut 5% from the economic growth it might have had over the past two years.

But Dr Snegovaya suggests: "Sanctions have not made waging this war sufficiently costly for Russia, and that means it can continue with it for some time to come".

The US Treasury also says that the war in Ukraine and sanctions have led more than a million people - many of them young and highly educated - to leave Russia.

Russia's government has also been slashing health spending to fund the war in Ukraine, according to the UK's Ministry of Defence.

"This mainly hits people in rural areas," says James Nixey of foreign affairs think tank Chatham House. "The government makes cuts there rather than in the major cities, where they might cause uprisings."

War in UkraineInternational sanctionsRussiaEconomic sanctionsRussia economyRelated

The Russian village that lost its men to war

Ukraine in maps: Tracking the war with Russia

Musk cuts Starlink access for Russian forces - giving Ukraine an edge at the front

More from the BBC2 days ago

'Difficult' Russia-Ukraine peace talks end without breakthrough

The second day of negotiations between Ukraine and Russia ended after just two hours.

2 days ago2 days ago

US says 'meaningful progress' made as Ukraine talks enter second day

The US special envoy struck an optimistic note after the first day of talks in Geneva, but hopes for a breakthrough remain low.

2 days ago3 days ago

Food prices are surging in Russia. Is the war hitting Russians in the pocket?

Russia's economy is hanging between stagnation and decline, and ordinary Russians are beginning to feel the pinch.

3 days ago3 days ago

First day of Russia-Ukraine peace talks ends in Geneva

Negotiations will continue on Wednesday, but expectations for a breakthrough on ending the war are low.

3 days ago3 days ago

France releases suspected Russian 'shadow fleet' tanker after fine paid

French Foreign Minister Jean-Noël Barrot said the vessel was departing Marseille after a payment of "several million euros".

3 days ago