Sanctions on Russia, explained

Brut America

The U.S. and its allies have imposed unprecedented economic and financial sanctions on Russia — more than have ever been imposed on a single country.  But what do these sanctions mean for Russia and the rest of the world? An expert explains ...

Transcript

00:00We're going after two things, trying to squeeze the Russian economy and also trying to squeeze

00:05those oligarchs, right?

00:10There are now more sanctions in place against Russia than there are against Iran, Venezuela,

00:17Myanmar and Cuba combined. Never in two weeks alone have such a set of measures being imposed.

00:24In the last decade or so, we have largely used economic and financial sanctions to respond to

00:31threats. These types of sanctions include commercial and financial penalties such as

00:37asset freezes, travel bans, restricting imports and suspending trade ties.

00:43Russia's long previewed invasion of Ukraine has begun and so too has our response.

00:59We announced yesterday that constitute the strongest, most consequential set of sanctions

01:18and other economic measures ever imposed. All 10 of Russia's largest bank, which hold 80 percent

01:26of the assets in Russia's banking sector, are now subject to these measures.

01:32We've seen the UK, the US and the EU, as well as other allies such as Canada,

01:38impose significant asset freezes and travel bans on Russian oligarchs, that being those close to

01:46Putin. When looking at the frozen assets, most significant would be that of the asset freeze

02:01against Russia's central bank, which essentially targets about 650 billion dollars in foreign

02:08reserves. Any funds, any assets, any property they own in the West, they will now no longer

02:24be able to access or, it depends on the country in question, there will be a limit on the amount

02:30of money which they can hold in, for example, the United Kingdom or in the European Union.

02:36What this means is it makes life a lot harder for these oligarchs. They can't access their yachts

02:41in Italian ports anymore or they can't live in their properties in Kensington and London.

02:48The effects of these measures are to hit those close to Putin.

02:51We've seen citizens withdraw funds as banks have been banned from

03:21SWIFT. We've seen Russian citizens move cash to autonomous payment systems, as well as Russian

03:28businesses struggle to adapt to the new reality now that they are removed from the global supply chain.

03:35The impact beyond this, beyond the business point of view,

03:48is that Russia has been suspended from key sporting competitions, as well as from Eurovision.

03:56Russia is deeply integrated into the global economy. It is a significant gas and oil

04:07exporter, meaning that these sanctions will have a knock-on effect not only in Russia itself,

04:13but all around the world. Today I'm announcing the United States is targeting the main artery

04:18of Russia's economy. We're banning all imports of Russian oil and gas and energy.

04:24The average price per gallon is now more than $4.17 and is expected to continue to rise.

04:32Russia and Ukraine are also some of the main global wheat producers and exporters. And prices

04:40of wheat have, as the invasion has had an impact on the global supply chain, surged to those that

04:46we last saw in 2008 with the global financial crisis. Essentially what this means is for

04:52those outside of Russia, globally, we'll see spikes in energy and grain prices and a likely

04:59long-term increase in food prices. For an effective sanctions strategy,

05:16you should always combine it with another tool of foreign policy. In this case, diplomatic tools.

05:23Dialogue, peace talks, and negotiation alongside the effects of the sanctions

05:30will make the economic costs of maintaining military presence in Ukraine increasingly

05:35unsustainable.

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