The EU and the UK have moved to freeze foreign-held assets of Vladimir Putin and his foreign minister, Sergei Lavrov, after Europe was accused by Ukraine’s president of failing to act hard and fast enough against Russian aggression.
The initiative is largely symbolic, as the Russian president is unlikely to have identifiable personal wealth abroad, but the move by Brussels and Downing Street followed recognition that appeals for action from Volodymyr Zelenskiy had to be heard.
The sanctions were closely coordinated. Two hours into a meeting of foreign ministers, the Latvian representative, Edgars Rinkēvičs, tweeted that the bloc had formally “adopted the 2nd sanctions package”.
Rinkēvičs added that “the asset freeze includes president of Russia and its foreign minister”. Soon afterwards, a spokesperson for Downing Street said the UK government would also act against the Russian leadership. Boris Johnson told a Nato summit that it was a necessary response to the Kremlin’s “revanchist mission”.
Asked whether Putin and his minister had assets in the UK and the EU, Josep Borrell, the bloc’s foreign affairs chief, said: “I am not in the secrets of Mr Lavrov and Mr Putin’s wealth and it is not my duty. There are people who will take care of that.”
Putin and Lavrov, who has been foreign minister since 2004, will not face travel bans as the EU and UK wish to maintain a diplomatic way through the crisis but the western allies wanted to show its resolve.
Zelenskiy had told EU leaders during a virtual appearance at their summit on Thursday night, as Russian forces encircled the Ukrainian capital, that it may be the last time they would see him. On Friday, he urged European citizens to compel their governments to do more to stop Putin in his tracks.
Zelenskiy said: “Europe has enough strength to stop this aggression. You still can stop this aggression. You have to act swiftly. We demand effective counteraction to the Russian Federation. Sanctions must be further strengthened.”
EU leaders at a summit in Brussels had agreed in principle in the early hours of Friday to impose a second tranche of measures designed to cripple the Russian economy in the medium to long-term with more banks, state-owned companies and individuals to be targeted, along with key sectors of the Russian economy. That was formalised by the foreign ministers on Friday.
But the EU has been holding back from blocking Russia from the international payments system known as Swift through which its oil and gas companies, among others, receive foreign currency. The EU is also not following the lead of the US and the UK in prohibiting payments between European banks and their Russian counterparts, known as correspondent banking.
Neither has the EU followed the UK in banning Aeroflot from its airspace for fear that Russia will retaliate by blocking European carriers from flying over Russia to Asian destinations. The sale of Belgian diamonds or Italian luxury goods to Russia will also be exempted from export controls.
Germany’s finance minister, Christian Lindner, said on Friday that his government, which has been cautious, was “open” to cutting Russia from Swift, adding: “But you have to know what you’re doing.”
An official in Brussels said EU governments needed to decide just how valuable the bloc’s €80bn annual trade with Russia was to them. As it stands, less than half of that trade will be affected at all by the EU’s sanctions regime. Cutting Russia off from Swift and following the US and UK on correspondent banking would strangle it.
“If I have 80bn [euros] of trade and I’m dependent on energy in particular, then I have to think for a second,” the EU official said. “I mean, [Swift] is still on the table.”
When asked why Swift had not been included in the punitive measures, Jean-Yves Le Drian, France’s foreign minster, said it had been “because we had to move quickly”. But the minister added: “There will be other penalties [to come].”
Charles Michel, the European Council president, spoke to Zelenskiy to reassure him that a third package of sanctions was being drawn up.
Boris Johnson has voiced his support for cutting Russia from Swift and Ireland’s taoiseach, Micheál Martin, said his government was in favour.
Martin said: “People have different perspectives on the efficacy or value of Swift in itself, so I don’t think we should singularly focus on Swift because the sanctions will hit hard at the industrial base, in terms of areas that will hurt the Russian economy.”
But he added: “Having said that, we pushed and will continue to push for the broadest possible sanctions. So, yes, the Irish government has no difficulty whatsoever with the Swift system being sanctioned, and that’s something that we would support.”
Under the EU’s new sanctions, all members of the Duma, the Russian security council will be subject to travel bans and asset freezes along with any Belarusian officials in the military and ministry of defence who “facilitated” the invasion of Ukraine.
There is also a proposal to enlarge the listing criteria for imposing sanctions on individuals as well to “better capture other forms of support to the regime, including oligarchs”.
Two additional banks will be subject to sanctions, Alfa bank and Otkritie, and there will be a prohibition on EU financial service providers lending to eight state-owned companies, ranging from the owners of seaports to automobile manufacturers.
There will be a prohibition on new bank deposits of more than €100,000 by Russian nationals and there will be a ban on the sale of all aircraft, spare parts and equipment to Russian airlines. The EU will also limit Russia’s access to crucial technology such as semiconductors and components needed to modernise its oil refinery sector.
The Kremlin spokesperson, Dmitry Peskov, declined to comment on possible punitive measures against Putin. He said Russia had deliberately reduced its dependence on foreign imports to protect itself against sanctions.
He said: “The main goal … was to ensure complete self-sufficiency and complete import substitution if necessary. To a large extent this goal has been achieved. Undoubtedly there will be problems, but they will not be insurmountable.”