Proof of this is the drop recorded in trade volumes (imports and exports) between Moscow and some of its most important partners, such as Turkey and China, in the first quarter of 2024.
The sanctions imposed by the United States on banks that finance the trade of goods with a view to maintaining the invasion of Ukraine by the Russian army, and the ongoing armed conflict in the country since February 2022, have made it much more difficult to move money from the Russia (capital inflows and outflows), according to senior Western officials and Russian financiers, cited by the Financial Times.
Proof of this is the sharp drop recorded in trade volumes (imports and exports) between Moscow and some of its most important partners, such as Turkey and China, in the first quarter of 2024.
This after at the end of last year the US has imposed sanctions on international banks that help Russia acquire “critical products” for the continuation of the war in Ukraine, which led financial institutions to avoid financing Russian purchases and also transactions in a series of currencies, such as the dollar and the euro, among others, Western officials and three important Russian financiers told the FT.
“It has become more difficult for Russia to access the financial services it needs to obtain these goods”, said Anna Morris, Deputy Assistant Secretary for Global Affairs at the US Department of the Treasury. “It’s definitely a goal to make it much more difficult for that money to flow, increase the cost for the Russians and also the friction in the system. Disruption is an important outcome,” she added.
The same sources report that, at this moment, Circumventing these US-imposed sanctions and restrictions requires a “growing network of intermediaries to avoid scrutiny, even if the transactions have nothing to do with Russia’s war machine.” At the same time, currency conversion and commission costs also increased.
“It’s getting more and more difficult. The logical end point of this is to turn Russia into Iran,” a prominent Russian investor told the FT, referring to the stringent financial sanctions in place against Tehran. The executive order issued by Washington was designed to target banks in countries – like Turkey, for example, that have seen sharp increases in trade with Russia.
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