G7 leaders have agreed to crack down on Russia’s ability to sell its gold reserves to support its currency as they launch a new effort to hinder any attempts by Moscow to evade financial sanctions imposed by the west.
The move was unveiled on Thursday as G7 leaders met at Nato headquarters in Brussels to beef up the economic punishment inflicted on Vladimir Putin’s regime as a result of Russia’s invasion of Ukraine.
It comes as the Biden administration and European governments focus on tightening the sanctions introduced at the start of the conflict and consider additional measures against Moscow.
“G7 leaders and the EU will continue to work jointly to blunt Russia’s ability to deploy its international reserves to prop up Russia’s economy and fund Putin’s war, including by making clear that any transaction involving gold related to the Central Bank of the Russian Federation is covered by existing sanctions,” the White House said in a statement.
The decision to freeze Russian foreign exchange reserves last month was seen by officials as the most powerful sanction the allies have unveiled in response to the invasion of Ukraine. Russia’s finance minister said this month that the country had lost access to around half its reserves as a result.
A senior Biden administration official said Russia’s gold reserves were likely to be worth between $100bn and $140bn and there were signs the country’s central bank was seeking to use them to “prop up the rouble”.
Officials stress that policing the sanctions is an ongoing effort which will require adjustments, including Thursday’s move against the Russian gold stockpile. One EU official described the measure as part of “sharpening and shaping” the sanctions regime — warning this will not be the final measure as Russia seeks ways of circumventing the rules.
“This is protecting the impact of what we already started,” the EU official said. “You always have to check and trim the sails to stay at speed.”
On Thursday, the G7 and the EU also announced a new information-sharing initiative about Russian efforts to evade sanctions. “Together, we will not allow sanctions evasion or backfilling. As part of this effort, we will also engage other governments on adopting sanctions similar to those already imposed by the G7 and other partners,” the White House said.
As part of efforts to crack down on evasion, the G7 allies are seeking to pressure other countries to support the penalties rather than helping Russia to find ways around them. China’s stance is crucial, with the EU planning to discuss Russia when it holds a summit with President Xi Jinping on April 1.
The US separately on Thursday announced a series of new sanctions against more than 400 Russian individuals and companies. Among them are Herman Gref, the chief executive of Sberbank, the Russian bank, and Gennady Timchenko, the founder and shareholder of Volga Group, as well as 17 board members at Sovcombank, another Russian lender. The US is also imposing sanctions against 48 Russian state-owned defence companies and 328 members of Russia’s parliament.