Russian President Vladimir Putin told the West on Tuesday that he could suspend exports and deals, the Kremlin’s toughest response so far to the severity of sanctions imposed by the United States and its allies on Russia’s invasion of Ukraine.
On Tuesday, Putin signed a broad wording banning the export of products and raw materials to people and organizations from a sanctions list that has not yet been drawn up. He instructed the government to draft it within 10 days.
The decree, which came into force immediately with its publication, gives Moscow the power to wreak havoc on the markets, as it could suspend exports at any time or terminate contracts with a legal or natural person who has sanctioned it, Reuters explains.
Putin explicitly formulated the decree in response to what he said were illegal actions by the United States and its allies aimed at depriving “the Russian Federation, citizens of the Russian Federation and Russian legal entities of property rights or restricting their property rights.”
Russia’s invasion of Ukraine on February 24 prompted the United States and its allies to impose the toughest sanctions in modern Russian history and Moscow’s business elite steps Putin describes as declaring economic war. The West’s attempt to isolate Russia economically – one of the world’s largest producers of natural resources – has pushed the world economy into unfamiliar waters with rising prices and food shortages.
Putin, 69, has repeatedly warned that Moscow will respond in the same way, although until Tuesday the Kremlin’s most drastic economic response was to cut off gas supplies to Poland and Bulgaria and demand a new payment scheme for European gas buyers.
Tuesday’s decree bans the export of products and raw materials to people and organizations sanctioned by the Kremlin. It prohibits any transactions with such persons or legal entities – even under existing contracts.
Putin has instructed the government to draw up a list of foreigners and companies to be sanctioned, as well as to set “additional criteria” for many deals that could be subject to restrictions.
“This is a framework decree,” said Tatiana Stanovaya, a non-resident at the Carnegie Moscow Center and founder of the political analysis firm R. Politik. “Now all the concrete lists need to be developed by the government. This is the main thing and we have to wait.”
Since the West imposed sanctions on Russia, the $ 1.8 trillion economies has been heading for its biggest contraction since the collapse of the Soviet Union in 1991, amid rising inflation.
Significant transfers of Russian assets have begun as the Russian state gains even more influence over the economy, many large Western investors – such as energy giants BP and Shell – are leaving, and oligarchs are trying to restructure their business empires.
