The UK, US Canada, and Japan announced at the G7 Summit on 26th June that exports of Russian gold, its biggest non-energy export, will no longer be allowed to be enter their respective countries. LBMA noted that these rules to apply only to new gold of Russian origin, not to old production (which remains Good Delivery).
“We believe this will help to maintain an orderly market. The date of new and old production will be communicated at a later date, once we get further clarity from the UK government,” LBMA said.
Gold is a major Russian export, worth approximately $15.4 billion to the Russian economy in 2021. Its value to the Russian elite has also increased in recent months with oligarchs rushing to buy gold bullion in an attempt to avoid the financial impact of Western sanctions. The tough new measures are intended to ratchet up the pressure on Russia, the UK Government said.
London is a major global gold trading hub and UK sanctions, which will be the first of their kind to be implemented against Russia anywhere in the world, will have a huge impact on Putin’s ability to raise funds, it added.
Given’s London central role in the international gold trade and parallel US, Japanese and Canadian action, this measure will have global reach, shutting the commodity out of formal international markets. At the G7, the UK Prime Minister will urge other leaders to join us to further isolate Russia from the international financial system, the statement read.
The UK Prime Minister Boris Johnson said: “The measures we have announced today will directly hit Russian oligarchs and strike at the heart of Putin’s war machine. Putin is squandering his dwindling resources on this pointless and barbaric war. He is bankrolling his ego at the expense of both the Ukrainian and Russian people. We need to starve the Putin regime of its funding. The UK and our allies are doing just that.”
The measures build on the action taken by the London Bullion Market on 7th March to suspend six Russian refineries. The gold import ban, which will come into force shortly, will apply to newly mined or refined gold. It does not impact Russian-origin gold previously exported from Russia. There are no plans to extend restrictions to Russian gold purchased legitimately before the import ban was put in place.