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In retaliation to Russia’s military action on Ukraine, the US and the UK governments have imposed major sanctions on key Russian banks.

The new sanctions by the US target Sberbank, VTB Bank, Bank Otkritie, Sovcombank OJSC, and Novikombank along with several Russian elites and their family members.

Additionally, US President Joe Biden’s administration has imposed new debt and equity restrictions on Russian entities including AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways. 

The sanctions on Sberbank, which is said to be the largest bank in Russia, will restrict its access to transactions made in the dollar by imposing correspondent and payable-through account sanctions on it.

VTB Bank along with Bank Otkritie, Sovcombank OJSC, and Novikombank are subject to full blocking sanctions, which will freeze their assets in the US financial system and ban the US individuals from dealing with them.

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“On a daily basis, Russian financial institutions conduct about $46bn worth of foreign exchange transactions globally, 80% of which are in US dollars. The vast majority of those transactions will now be disrupted,” US Treasury said in a statement.

Meanwhile, the sanctions announced by the UK will freeze Russian banks’ assets in the country, forcing them out of the country’s financial markets.

“For our part, today the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen,” UK Prime Minister Boris Johnson said in a statement.

VTB Bank is among those being affected by the UK’s sanctions.

The UK’s move will also block Russian government-backed firms and other entities from raising funds in the UK.

These sanctions also target Russian elites, banning them from accessing UK Banks’ services.

The European Union has also decided to freeze Russian assets in the region and cut off banks from accessing the European financial markets.

Notably, the Biden administration and the EU have decided not to impose sanctions that will cut off Russia from the SWIFT global interbank payments system, Reuters has reported.

Biden said that the option “is always open. But right now, that is not the position rest of the Europe wishes to take.”