Sanctions imposed by the West

Britain has 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.

The United States sanctioned VEB bank and Promsvyazbank. Sberbank and VTB Bank will also face sanctions if the Russian invasion proceeds. Bank Rossiya has already been under US sanctions since 2014.

The European Union 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 that sanctions could be felt far beyond its borders.

The EU's measures 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 increased restrictions on dealings in Russia's sovereign debt. Americans, who are already barred from investing directly in Russian sovereign debt, will after March 1 also be banned from purchasing it in the secondary market.

Britain has threatened to block Russian companies from raising capital in London, Europe's financial centre for such transactions, though it has so far stopped short of doing so.

Having lower debt improves a country's balance sheet on the surface, but deprives it of fin-ancing sources that could contribute to economic growth and development.

The EU imposed sanctions on five people involved in a Russian parliamentary election in annexed Crimea in September last year. It will also blacklist all lawmakers in the Lower House of the Russian Parliament who voted in favour of recognising two breakaway regions in Ukraine, freeze any assets they have in the EU and ban them from travelling to the bloc.

Britain sanctioned three men - Mr Gennady Timchenko and billionaires Igor and Boris Rotenberg - allies of Russian President Vladimir Putin. All three are already sanctioned by the US.

The US also imposed sanctions against Russian elites close to Mr Putin, including Russia's Federal Security Service head Alexander Bortnikov, Mr Putin's first deputy chief of staff Sergei Kiriyenko and Promsvyazbank chairman Petr Fradkov.

US President Joe Biden has said he would be ready to consider personal sanctions on Mr Putin himself. Moscow has said that any move to impose sanctions on Mr Putin would prove "politically destructive".

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 curbs on exports, imports and debt raising. Sanctions could be widened, with one option being to prevent firms settling in US dollars.

Nord Stream 2, a recently completed gas pipeline from Russia to Germany, was awaiting regulatory approval by the EU and German authorities before Berlin halted its certification. Europe's dependence on Russian energy supplies weakens its hand in imposing sanctions on 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. The measures include potentially blocking Russia's access to global electronics supplies.

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 Swift sanctions are not being taken off the table.

In 2012, Swift disconnected Iranian banks as international sanctions tightened against Teheran over its nuclear programme. Iran lost half its oil export revenue and 30 per cent of its foreign trade.

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.

REUTERS