EU Bans Russian Gold And Restricts Deposit-Taking

July 26, 2022
In its seventh sanctions package, the European Union has prohibited the purchase of Russian gold and strengthened restrictions around deposit-taking from Russian-owned businesses.

In its seventh sanctions package, the European Union has prohibited the purchase of Russian gold and strengthened restrictions around deposit-taking from Russian-owned businesses.

Europeans are to be prohibited from purchasing, importing or transferring, directly or indirectly, gold, if it originates in Russia and has been exported into the EU or to any third country after. The prohibition under the new sanctions package also covers jewellery.

“We are effectively banning Russia’s most significant export after energy — Russian gold,” said Josep Borrell, high representative for foreign affairs and security policy and vice president of the European Commission.

Russian gold export was estimated to be worth more than $18.9bn in 2020, a vast majority of which ($16.9bn) went to the United Kingdom, followed by exports to Switzerland ($693m).

The so-called “maintenance and alignment” package also expands the scope of the prohibition on accepting deposits “to include those from legal persons, entities or bodies established in third countries and majority-owned by Russian nationals or natural persons residing in Russia”.

The acceptance of deposits for non-prohibited cross-border trade will be subject to a prior authorisation by the national competent authorities, according to the European Council.

Commenting on the new sanctions package, Ukrainian President Volodymyr Zelensky said "this is not enough”.

“I am telling my partners this frankly. Russia must feel a much higher price for the war so that it forces it to seek peace," the President added.

Further measures included in the package

The new package also clarifies that state-owned entities are exempt from bans when it concerns transactions for agricultural products and the transport of oil to third countries, “[w]ith a view to avoid any potential negative consequences for food and energy security around the world”.

“None of the measures adopted today or earlier in view of Russia’s actions destabilising the situation in Ukraine target in any way the trade in agricultural and food products, including wheat and fertilisers, between third countries and Russia,” the EU body said.

The new package extends the list of controlled items that may contribute to Russia’s military and technological enhancement or the development of its defence and security sector, as well as the existing port access ban to locks.

The EU is also introducing a number of clarifications to existing measures, for example in the field of public procurement, aviation and justice. The prohibition to enter into any transactions with Russian public entities will be slightly amended to ensure access to justice.

Besides the economic sanctions, the European Council decided to list additional individuals and entities, and strengthen reporting requirements.

The new listing includes Russia’s largest bank Sberbank.

“We are listing another major Russian Bank, Sberbank, and preventing it from conducting transactions outside Russia,” Borrell said.

Sberbank pulled out from Europe in early March after experiencing big cash outflows as a result of the first sanctions packages.

To date, the EU has adopted seven sanctions packages in relation to the war in Ukraine, which altogether include restrictive measures on 1,212 individuals and 108 entities.

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