WASHINGTON (REUTERS) - The United States and its allies are coordinating new sanctions on Russia after Moscow recognised two regions in eastern Ukraine as independent, officials said.
Details have started to emerge on the steps taken or planned by the US, European Union (EU), Britain and other Western powers.
Below are details on the curbs proposed so far and what other sanctions could target Russia.
Banks & financial firms
Britain announced sanctions on five banks - Bank Rossiya, Black Sea Bank, Genbank, IS Bank and Promsvyazbank - all are smaller lenders, with only Promsvyazbank on the central bank's list of systematically important lenders.
US President Joe Biden announced sanctions on VEB bank and Russia's military bank, referring to Promsvyazbank, which does defence deals. The Treasury Department said: "All assets under US jurisdiction will be immediately frozen and US individuals and entities are prohibited from doing business."
A senior US administration official added that Sberbank , and VTB Bank would face sanctions if the Russian invasion proceeds.
Bank Rossiya is already under US sanctions from 2014 for its close ties to Kremlin officials.
The EU has agreed to blacklist banks involved in financing separatist activities in eastern Ukraine.
Russia's large banks are deeply integrated into the global financial system, meaning sanctions could be felt far beyond its borders.
Data from the Bank for International Settlements (BIS) shows that European lenders hold the lion's share of the nearly US$30 billion (S$40.4 billion) in foreign banks' exposure to Russia.
According to data from Russia's central bank, total Russian banking foreign assets and liabilities stood at US$200.6 billion and US$134.5 billion respectively with the US dollar share amounting to around 53 per cent of both, down from 76 per cent to 81 per cent two decades ago.
Sovereign debt & capital markets
The package of measures from the EU will "target the ability of the Russian state and government to access the EU's capital and financial markets and services, to limit the financing of escalatory and aggressive policies," according to a statement by the bloc.
It will ban EU investors from trading in Russian state bonds. The US also increased restrictions on dealings in Russia's sovereign debt.
Britain threatened last week to block Russian companies from raising capital in London, Europe's financial centre for such transactions, though has stopped short of doing so in its announcements on Tuesday (Feb 22).
Even before the latest events, access to Russian bonds had become increasingly restricted.
US sanctions imposed in 2015 made future Russian dollar debt ineligible for many investors and key indexes.
In April 2021, Mr Biden barred US investors from buying new Russian rouble bonds over accusations of Russian meddling in the U.S. election.
The curbs have cut Russia's external debt by 33 per cent since early 2014 - from US$733 billion to US$489 billion in the third quarter of 2021.
Lower debt improves a country's balance sheet on the surface, but deprives it of financing sources that could contribute to economic growth and development.
Sanctioning persons via asset freezes and travel bans is a commonly used tool and the US, the EU and Britain already have such sanctions in place against a number of Russian individuals.
The EU on Monday imposed sanctions on five people who were involved in a Russian parliamentary election in annexed Crimea in September 2021.
On Tuesday, the bloc said it would blacklist all lawmakers in the lower house of the Russian Parliament who voted in favour of the recognition of the breakaway regions, freeze any assets they have in the EU and ban them from travelling to the bloc.
Meanwhile Britain has imposed sanctions on three men, Mr Gennady Timchenko and billionaires Igor and Boris Rotenberg - all of whom are allies of President Vladimir Putin from St.Petersburg whose personal fortunes grew precipitously following Mr Putin's rise to the presidency. All three men are already sanctioned by the US.
Starting on Wednesday US sanctions will also begin against Russian elites close to Putin, with the Treasury Department naming Mr Petr Mikhailovich Fradkov, Mr Vladimir Sergeevich Kiriyenko and Mr Denis Aleksandrovich Bortnikov, and their family members.
Energy corportates & Nord Stream 2
The US and the EU already have sanctions in place on Russia's energy and defence sectors, with state-owned gas company Gazprom, its oil arm Gazpromneft and oil producers Lukoil, Rosneft and Surgutneftegaz facing various types of curbs on exports/imports and debt-raising.
Sanctions could be widened and deepened, with one possible option being to prevent companies settling in US dollars.
Nord Stream 2, a recently completed pipeline from Russia to Germany, was awaiting regulatory approval by EU and German authorities before Berlin put its certification on ice.
Europe's dependence on Russian energy supplies weakens the West's hand when considering sanctions in this sector.
The White House has told the US chip industry to be ready for new restrictions on exports to Russia if Moscow attacks Ukraine, including potentially blocking Russia's access to global electronics supplies.
Similar measures were deployed during the Cold War, when sanctions kept the Soviet Union technologically backward and crimped economic growth.
Switching off swift
One of the harshest measures would be to disconnect the Russian financial system from SWIFT, which handles international financial transfers and is used by more than 11,000 financial institutions in over 200 countries.
A senior US official said they are not taking SWIFT sanctions off the table.
In 2012, SWIFT disconnected Iranian banks as international sanctions tightened against Tehran over its nuclear programme.
Iran lost half its oil export revenue and 30 per cent of its foreign trade, the Carnegie Moscow Center think tank said.
Among Western countries, the US and Germany would stand to lose the most from such a move, as their banks are the most frequent SWIFT users with Russian banks, said Dr Maria Shagina at the Carnegie Moscow Centre.
Calls to cut Russia's SWIFT access were mooted in 2014 when Moscow annexed Crimea, prompting Moscow to develop an alternative messaging system, SPFS.
The number of messages sent via SPFS was about one-fifth of Russian internal traffic in 2020, according to the central bank, which aims to increase this to 30 per cent in 2023.
However, SPFS has struggled to establish itself in international transactions.