The British, EU and US governments slapped additional sanctions on Russia after Russian President Vladimir Putin ordered an attack on Ukraine on February 24.

The British Prime Minister Boris Johnson unveiled a ten-point list of measures to impose on Russia. The main points of the new sanctions include:  

• All major Russian banks operating in the UK will have their assets frozen. Prime Minister Johnson specially named VTB as one of the targeted banks, which saw its shares promptly plunge.
• All major Russian companies will be banned from raising finance in London, cutting them off from the LSE and bond markets. London is the major venue for raising debt for most Eastern European companies.
• More than 100 individuals and entities will be specifically targeted with individual sanctions, including five more oligarchs as well as Russian defence giant Rostec and similar companies. UK citizens will be banned from transacting with the targeted firms.
• The Russian national air carrier Aeroflot will be banned from operating in the UK.
• All dual-use equipment export licences to Russia are suspended, hitting Russia’s aviation and defence sectors.
• Mirroring the US sanctions, the UK will also ban a number of high tech exports to Russia targeting items like semi-conductors and aircraft spare parts.
• A cap on the size of deposits Russian nationals can hold in UK bank accounts will be introduced. The limit has not yet been set but it will be designed to target wealthy individuals.
• Johnson called for Russia to be cut off from the SWIFT messaging system that would lock it out of the international money transfer system, although the British PM said this measure will co-ordinated with European allies, who are less keen on the idea.
• The UK will extend all the planned measures applied to Russia to Belarus.
• The British government will accelerate its Economic Crime Bill that can be used punitively against wealthy Russians and also to prevent money laundering using, amongst other things, the London property market.

Later the same day US President Joe Biden unveiled new measures at a rowdy press conference vowing to impose a “severe cost” on Russia for its unprovoked attack on Ukraine.  

“Putin is the aggressor; Putin chose this war, and now he and his country will bear the consequences,” Biden said.

Biden said four banks will be hit, including the state-owned retail banking giant Sberbank, that he said collectively hold over $1 trillion of assets in the US. “That means every asset they have in America will be frozen,” he added.

The US Treasury Department (USTD) later released more details saying that both VTB and Sber would be cut off from using US dollars. Together both banks account for well over half of all Russia’s deposits.  

“Treasury is taking unprecedented action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian  financial institutions conduct about $46bn worth of foreign exchange transactions globally, 80% of which are in US dollars. They cast majority of those transactions will now be disrupted. By cutting off Russia’s two largest banks – which combined make up more than half of the total banking system in Russia by asset value – from processing payments through the US financial system. The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency and security of the US financial system,” the USTD said in a statement.  

Biden said that more oligarchs close to Putin would be targeted and added to the SDN (Specially Designated Nationals) lists. However, when asked if Russian President Vladimir Putin would be included in the personal sanctions, Biden dodged the question.  

All of the top Russian politicians, including Russian Foreign Minister Sergei Lavrov, Russian Defence Minister Sergei Shoigu and Putin himself, were included in “the sanctions from hell” bill passed recently, giving the president new sanctions powers.  

Biden said the sanctions were designed to have a long-term impact on Russia and to minimise the impact on the United States and its allies. And he said Washington was prepared to do more.

Biden said the sanctions would “limit Russia's ability to do business in dollars, euros, pounds and yen or be part of the global economy. We will stun its ability to grow its defence industry. And we will limit’s ability to participate and compete in the 21^st century economy.”

"Putin's aggression against Ukraine will end up costing Russia dearly," Biden said. "Putin will be a pariah on the international stage."

In what is a co-ordinated effort, EU President Ursula von der Leyen also held a press conference within hours of the other two leaders to announce that the EU would also introduce more sanctions that will “weaken Russia's economic base and its capacity to modernise” following the “barbaric attack” by Moscow against Ukraine.

“We condemn this barbaric attack and the cynical arguments that are being used to justify it,” von der Leyen said.  

Without giving details, the EU has prepared “massive and strategic” sanctions against Russia for approval later the same day by diplomats in Brussels.

“These sanctions are designed to take a heavy toll on the Kremlin's interests and their ability to finance war. And we know that millions of Russians do not want war,” she said as cited by CNN.  “We will not allow President Putin to replace the rule of law by the rule of force and ruthlessness,” she said, "Ukraine will prevail."

Speaking alongside von der Leyen, EU High Representative Josep Borrell said punitive measures from the 27-member bloc against Russia would be “the harshest packet of sanctions that has ever been implemented.”

For a more detailed discussion of the effect of sanctions on the Russian economy listen to the bne IntelliNews podcast with Elina Ribakova, deputy chief economist with the Institute of International Finance (IIF) here, or watch it here.